Pay for Performance (P4P)

A payment tied to physicians’ performance on a defined set of quality measures. This model evaluates performance and pays for higher quality of care according to this evaluation. Usually, pay for performance is an additional payment on top of traditional fee–for–service.

An example of a future pay–for–performance model is CMS’s Physician Quality Reporting System (PQRS). Though physicians are currently paid a bonus simply for reporting through this program, the intent is that physicians will be paid not just for reporting, but for reaching quality benchmarks in the future. In addition, starting in 2015, physicians may be subject to a penalty if they choose not to participate or are unsuccessful based on 2013 performance.

One weakness of the pay–for–performance model is that if providers focus only on those areas of care that can be measured, the overall quality of care could suffer. There are also concerns that the current quality measures, though often evidenced–based, may not adequately improve overall outcomes enough to justify the effort and expense of the program.