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GAO: 3 Ways CMS Can Incentivize Physicians Like Private Payors

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The Government Accountability Office examined nine private payors and their practices for incentivizing physicians, finding some of their protocols may help CMS' performance-based reimbursement efforts.

The GAO studied private payors and private physician payment initiatives, including patient-centered medical homes, pay-for-performance contracts and accountable care programs. The GAO also interviewed physician groups associated with those initiatives, along with comment letters from national physician organizations and three representatives from state medical societies.  

The GAO found a few recurring themes in private payors' quality-based reimbursement contracts with physicians:

• Private payors tend to measure performance and provide incentive payments at the physician group level, opposed to measuring and paying individual physicians.

• Private payors also use nationally endorsed performance metrics, and most provide financial incentives for meeting absolute benchmarks, which are fixed performance targets. Physician groups generally prefer these fixed benchmarks instead of metrics on how physicians perform compared with peers.

• To have the greatest influence on performance, physician organizations in the study said that financial incentives should be distributed soon after the performance period. Private entities tend to provide incentive payments within seven months of the conclusion of a performance measurement period.

The GAO recommended CMS consider whether certain practices from the private sector could strengthen the Value-Based Payment Modifier program, which is designed to adjust physicians' Medicare reimbursement based on performance data reflecting the cost and quality of care provided. CMS still needs to develop a method to measure physicians' performance reliably in small practices.

More Articles on Physicians and Incentives:

3 Tips on How to Operate a Successful Physician Group Under Healthcare Reform
5 Payment Models for ACO Providers
3 Centerpieces in Hospital-Owned Physician Group Compensation Plans


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