Pay-For-Performance

The AAFP believes that quality care, access to care and positive health outcomes must be the primary goal of any physician reimbursement system. The value of prevention, early diagnosis and early treatment must be recognized with appropriate incentives to the patient and the physician to participate. The AAFP encourages family physicians to improve continuously the quality of patient care through ongoing documentation and analysis of practice patient data and patient feedback. The AAFP also believes that practices should take steps to ensure patients’ safety within the practice, including the use of electronic data and decision support systems. The Academy also believes, and the evidence supports, that a health care system based on a robust primary care infrastructure produces better health outcomes for lower total costs. Yet most commonly used physician payment options, notably visit-based fee for service, do not support, and at times inhibit, the accomplishment of these goals. Payment reform is essential to reviving the nation’s primary care infrastructure.

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 Academy recognizes the need for experimentation in physician payment methodology, 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 Academy also recognizes that there are both advantages (increased reimbursement, improved efficiency and quality) and disadvantages (cost of acquiring information technology, multiple programs and guidelines, data collection) to such programs as they are currently envisioned and being tested by various employers and their contracting health plans and third party administrators.

The AAFP supports pay for performance programs that follow its seven main principles:

Focus on improved quality of care
Support the physician/patient relationship
Utilize evidence-based clinical guidelines
Involve practicing physicians in program design
Use reliable, accurate, and scientifically valid data
Provide positive physician incentives
Offer voluntary physician participation

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

Any pay for performance (PFP) program should have as its central purpose to improve the quality of patient care and clinical outcomes.
Practicing physicians should be involved in program design and performance measure selection to enhance physician buy-in, e.g., through a practicing physician advisory committee.
Performance measures utilized in pay for performance programs should be consistent with AAFP policy titled “Statement of Principles for Performance Measurement Criteria.”
PFP programs should explicitly describe the data sources on which measurement is based (e.g., administrative/payment claims, medical records audit, patient and/or physician surveys and/or pharmacy claims) and should utilize valid peer groups, evidence-based statistical norms and/or evidence-based clinical policies.
Should utilize valid peer groups, evidence-based statistical norms and evidence-based clinical policies.
PFP programs should include methodology for accurate attribution of data when multiple physicians are involved in a single patient’s care.
P4P programs should provide incentives to physician practices for:
1. adoption and utilization of health information technology,
2. implementation of systems to improve the quality of patient care and patient safety,
3. access to appropriate and timely care, and
4. patient acceptability and satisfaction with their care.
Incentive payments should reward both performance improvement, and meeting performance targets.
PFP programs should include a process for physician appeal of their performance data.
Performance data feedback to physician practices should be provided in “real time” and be compared against both peers and performance targets.
Performance data should be aggregated and analyzed by an independent entity in a manner consistent with Academy policy on “Data Stewardship” and reviewed by the physician or audited by an independent third party.
PFP programs should be consolidated across employers and health plans to make the bonuses meaningful and the program more manageable for physician practices.
The financial rewards to physician practices must be more than sufficient to cover the additional administrative costs to participate in the program (data collection and measurement.)
There should be a minimum number of visits/encounters per patient per year and a minimum number of patients/physician per year before the data is considered valid in determining that physician’s performance. Additionally, patient refusal of service must be documented and incorporated into the evaluation of performance.
PFP incentive programs should utilize new money funded by using a portion of the projected health plan savings. There should be no reduction in existing fees paid to physicians as a result of implementing a PFP program.
The PFP entity should notify the patients affected, provide related self-care information and reinforce patient responsibilities in achieving the desired health outcomes.
The lack of patient adherence must be documented and incorporated into the evaluation of performance.
The program cannot create incentives that place physicians at odds with their patients, e.g., incentives to fragment care or deselect certain patients.
Programs should be designed to include practices of all sizes and all levels of information technology capabilities.
Programs should minimize administrative, financial and technological barriers to participation.
Results from PFP programs should not be used against the physician in licensure, certification, or health plan credentialing.
When evidence is lacking about the appropriateness of interventions, acknowledge that they physicians’ judgement and the costs associates with various treatment options be considered in pay for performance programs, as consumers and payers have a responsibility to choose between treatment options based on costs.
The application of performance based measures may be accompanied by financial incentives/payments that reward adherence to evidence-based practice.

(2004) (December Board 2007)