Both public and private health insurers, as well as employers, have come to recognize the importance of experimentation with physician payment methodologies that incentivize medical practices to expand the provision of preventive services, improve clinical outcomes and enhance patient safety and satisfaction with the care they receive. These incentive programs, known collectively as “pay for performance” programs, have the potential to increase physician use of electronic health information technology, evidence-based clinical guidelines, administrative and clinical “best practices” and access to appropriate and timely care.

The American Academy of Family Physicians (AAFP) recognizes the need to reform physician payment, including pay for performance as one approach. However, there are a multitude of organizational, technical, legal and ethical challenges to designing and implementing pay for performance programs. The AAFP also recognizes that there are both advantages (increased payment, improved efficiency and quality) and disadvantages (cost of acquiring information technology, multiple programs and guidelines, data collection) to such programs as they are currently designed and implemented. Payers' physician measurement processes used to rate/designate family physicians should be transparent and adhere to the AAFP policy on Performance Measures Criteria, Physician Profiling, Data Stewardship, and Transparency.

The AAFP supports pay for performance (PFP) programs that adhere to these principles:

  1. Focus on improved quality of care
  2. Support the physician/patient relationship
  3. Utilize performance measures based on evidence-based clinical guidelines
  4. Involve practicing physicians in program design
  5. Use reliable, accurate, and scientifically valid data
  6. Provide positive physician incentives
  7. Offer voluntary physician participation

The AAFP will use its influence to support and encourage experimentation using the following guidelines:

  1. PFP programs should provide incentives to physician practices for:
    1. Adoption and utilization of health information technologies;
    2. Implementation of systems to improve the quality of patient care and patient safety;
    3. Adhering to evidence-based clinical guidelines;
    4. Improving performance and meeting performance targets;
    5. Improving patient access to appropriate and timely care; and
    6. Measuring and attempting to improve patient acceptance and satisfaction with their care
  2. PFP programs should be consolidated across employers and health plans to make the payment meaningful and the program more manageable for physician practices.
  3. PFP incentive programs should utilize new money funded by using a portion of the projected total system savings. There should be no reduction in existing fees for service paid to physicians as a result of implementing a PFP program.
  4. The financial rewards to physician practices must both recoup the additional administrative costs to participate in the program (data collection and measurement) and provide significant incentive.
  5. The program cannot create incentives that place physicians at odds with their patients, e.g., incentives to fragment care or deselect certain patients. Case-mix evaluation and appropriate adjustments, including known clinical and socioeconomic factors, should be employed to allow fair comparisons of different practices.
  6. Programs should minimize administrative, financial and technological barriers to participation.
  7. The PFP entity should notify the patients affected, provide related self-care information and reinforce patient responsibilities in achieving the desired health outcomes.
  8. When evidence is lacking regarding the value of a particular diagnostic or therapeutic intervention, acknowledge that physicians’ judgment, patient’s preference, and the costs associated with various options may be the best measures of the appropriateness of a given intervention for PFP purposes.
  9. Patient cases should be removed from the performance measure(s) being assessed (“denominator exclusion”) when a physician can demonstrate that attempts have been made to provide patients support to follow recommended care and they have subsequently not followed such recommendations, the recommendations are inappropriate for this patient due to other clinical or socioeconomic considerations, or the patient is unable to comply.
  10. Programs should be designed to include practices of all sizes.

(2004) (2010 COD)