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Pay for Performance

Learn more about payments tied to physicians' performance.

What is pay for performance?

Pay for performance is a payment tied to a physician's 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.

How does pay for performance work?

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.

Starting in 2015, physicians may be subject to a penalty if they choose not to participate or are unsuccessful based on 2013 performance.

What are the drawbacks?

One drawback is, 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 may not improve overall outcomes to justify the effort and expense of the program.

What do you need to know?

When considering payment based on performance, make sure you understand which measures are used to assess the quality of your services.

Have a clear understanding if a payment is added on top of current reimbursement, and if a failure to meet the quality standards will result in a penalty.

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