President

Pay for Performance: A Wolf in Sheep’s Clothing

Ongoing input from organized medicine is essential

Pay for performance (P4P) sounds so positive that, on its face, it would seem to be a great idea until one looks into its details. Outside of health care, P4P has been used primarily to reward employees with additional compensation who produce more widgets with the same resources, who increase revenue or profit or who reduce costs. In the health-care setting, P4P has been wrapped in the cloak of improved quality of care. Unfortunately, most P4P plans in health care have focused on “efficiency” due to the relative ease of measuring the cost of care and the desire of third-party payers to reduce costs. Quality is repeatedly mentioned, but rarely found when the plan details are analyzed closely.

The AMA has proposed five principles for P4P plans: 1) ensure quality of care, 2) foster the patient/physicians relationship, 3) offer voluntary physician participation, 4) use accurate data and fair reporting and 5) provide fair and equitable program incentives. These are good benchmarks to measure P4P plans against. Are there any plans that meet the AMA criteria? I am not aware of any.

There are a few programs that have focused on quality. In the British National Health Service, 8,000 primary-care doctors agreed to receive bonus payments according to their performance on 146 quality indicators. Funding for primary care was increased by 20% allowing the practices to invest in extra staff and technology. The program has been a success with 97% of quality measures being achieved by the doctors who earned an average of $40,000 more under the program. This shows that quality can be improved, but at significantly increased costs.

In the U.S., with few exceptions, the record of P4P is a lot less encouraging. CMS has taken, at the prodding of Congress, a few baby steps into P4P. Currently physicians may be eligible for a 1.5% bonus if they report on certain specialty-specific quality measures. For most practices, such minimal financial incentives are not worth the added administrative burden. Going forward, in order to get a piece of this “generous” incentive, practices will have to invest $$$ into electronic health records (EHR) systems without any support from CMS.

Lacking national standards in quality measures, insurance companies are developing their own proprietary P4P plans. A couple of years ago, United Healthcare imposed a “P4P” plan in St. Louis without local physician input. Patients were penalized with increased co-pays if they saw a network physician who was not on the preferred list. The physicians with a gold star were picked based on proprietary measures that seemed to focus on low cost rather than quality. With strong opposition from SLMMS, local physicians and hospital systems, the P4P plan was scrapped and UHC went back to the drawing board. They have developed, with local physician input, a number of quality measures in most specialties that could be gleaned from claims data. The tricky part was separating measures that are under the control of the physician from those under the control of the patient. How this new P4P plan will be implemented remains to be seen. Outside of the St. Louis area, UHC has introduced a P4P plan that gives one star to physicians who meet proprietary P4P quality measures and two stars to those from the first group, who provide care at the lowest cost.

Now imagine that each managed care plan you participate with designs its own P4P plan with proprietary quality and efficiency measures. A physician would have to tailor care for a given patient based on what managed-care company the patient has. I strongly believe that patient care should be based on individual patient needs and not on insurance company mandates. In addition, the administrative hassles implicit in keeping track of dozens of different P4P plans would make it prohibitively expensive and impractical even with an EHR in place. Finally, practicing according to proprietary or even standardized algorithms eliminates the “art” of medicine and stifles innovation.

P4P is still in its infancy, but it is already clear that without significant physician input, these plans are not beneficial for the patient-physician relationship. There are a number of actions we as physicians can take to influence P4P for the better as P4P is not going away any time soon.

• First, learn what quality and cost-containment measures the plan will be using. Request a detailed explanation of the specialty-specific measures that you will be expected to meet.

• Second, develop the necessary administrative procedures to capture and report on the measures to the managed care organization. Even if the P4P plan is based purely on claims data, it is important to track the measures within your office to make sure that you are meeting the metrics. This way, if you are subsequently penalized for not meeting the P4P measures, you will have ammunition to challenge the managed care company determination.

• Finally, train your staff to correctly document and report on the P4P measures. In most cases, it just means that the CPT and ICD-9 coding report reflects what has been done for the patient.

If you are put in the non-preferred portion of the network, you should find out if the determination is valid and challenge it. Review your contract to see if the plan is allowed to set up tiers of physicians and what appeal rights you may have. Get a copy of your individual profile from the insurance company and review it for accuracy and completeness. If your practice variation from the norm is correctly documented, figure out if the data is correctly adjusted for complexity of cases you treat and if your patients are sicker than average. Are you compared to peers in your specialty? Is the number of cases used for your rating sufficient to provide valid information? If you find that the data in your profile is inaccurate or the methodology flawed, file a formal appeal with the insurance company. If you do not receive satisfaction with them, file a complaint with the insurance commissioner and SLMMS Physician Grievance Committee.

SLMMS and organized medicine need to be on the lookout for flawed P4P plans. We should work with insurers to make sure that these plans do not harm patient care and focus on patient quality rather than trying to provide care for the lowest cost. If flawed P4P plans are introduced over our objections, we need to educate patients, employers, legislators, regulators and the public about plans that may have a negative effect on the care they receive. We should encourage patients and employers to vote with their wallets, legislators to provide legislative relief and regulators to protect patients.