CHCS - Center for Health Care Strategies

Improving the quality and cost-effectiveness of publicly financed health care

Physician Pay-for-Performance in Medicaid: A Guide for States

Karen LLanos, Joanie Rothstein, Center for Health Care Strategies; Mary Beth Dyer, Michael Bailit, Bailit Health Purchasing, LLC
March 2007

Medicaid, one of the largest health care purchasers in the country, can play a leading role in testing the viability of physician-level pay-for-performance (P4P) strategies to improve health care quality for low-income, racially diverse, and chronically ill individuals. Physician Pay-for-Performance in Medicaid: A Guide for States, developed by the Center for Health Care Strategies (CHCS), offers actionable steps to help states design and implement physician-level P4P strategies.

During the summer of 2006, CHCS conducted a 50-state survey, funded by The Commonwealth Fund and the Robert Wood Johnson Foundation, to identify innovative practices in the reimbursement of high-quality health care in the public sector. Based on the survey’s most promising responses, CHCS and Bailit Health Purchasing conducted 12 interviews with Medicaid agency officials from across the country, representatives from CMS, and other experts in health care financing. This resulting guide for states offers practical lessons from a variety of Medicaid, commercial, and Medicare P4P programs to help states develop physician-level performance incentive strategies. The guide also outlines 10 financial models of physician rewards and six non-financial models that states can consider in the design of Medicaid physician P4P programs.


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