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American Academy of Family Physicians

Physician Payment Reform


The “new model of family medicine” provides a road map for family physicians to provide science-based, high-quality, patient-safe care through systems redesign and process improvements. Physician payment methodology should be designed to stimulate and reward structure and process improvements that lead to improved clinical outcomes. Funds to support improvements in patient safety and quality care should come from payors through system-wide savings that result from improved care coordination, decreased morbidity, and appropriate utilization of resources with decreased waste and duplication. Family physicians should be fairly compensated for their contributions to these savings through enhanced payments and/or performance bonuses.

However, to implement these new payment methodologies, it is reasonable to expect practices to collect and report quality performance data. AAFP members should be aware that at some point in the future, payors may begin to direct funds away from practices that don’t report performance data or meet established quality targets. These practices may receive a lower payment amount, e.g., less than a full fee schedule amount.

It is the AAFP’s position that the principles outlined in its policy on “Pay for Performance” should be adhered to when any such payment methodology is designed.

Academy member communications, policies and programming should reflect this message, and the Board should direct Academy’s resources to prepare its members for this future. (2005)