Majority of State Medicaid Programs Have or Plan to Have 'Pay-for-Performance' Programs, According to Landmark Study

IPRO Survey, Published by Commonwealth Fund, is First of its Kind; Shows

85% of States May Link Reimbursement With Performance Within Five Years

    LAKE SUCCESS, N.Y., April 12 /PRNewswire/ -- In the first published
 nationwide survey of state Medicaid programs on "pay-for-performance"
 practices, more than half of all programs state that they provide financial
 incentives to health care providers for better quality care. Almost 85
 percent of states plan to have pay-for-performance programs within five
 years. Researchers also found that most current programs focus on women's,
 children's and adolescents' health issues. The study is published today by
 The Commonwealth Fund, a private foundation working toward a
 high-performance health system. Authors are from IPRO, a not-for-profit
 quality evaluation and improvement organization and The Kuhmerker
 Consulting Group, LLC, a health care consulting firm.
     "Medicaid is a major source of funding of health care in every state
 and, therefore, has a significant influence on the health care system,"
 said Thomas Hartman, Vice President for Health Care Quality Improvement for
 IPRO and co- author of the study. "But each state operates its program
 independently of the others. We thought it would be helpful to provide a
 detailed snapshot of what is taking place around the nation so that state
 officials have solid information on which to base decisions about
 pay-for-performance."
     Hartman and co-author Kathryn Kuhmerker, President of the Kuhmerker
 Group and former Medicaid Director for New York State, found several
 trends. Nine Medicaid programs (Arizona, Kansas, Maine, Minnesota, New
 Hampshire, New York, Oregon, Vermont, and Washington) are joining in
 statewide and regional pay- for-performance and quality improvement
 efforts, and others are considering entering into such collaborations.
 Health information technology is a focus of numerous Medicaid
 pay-for-performance programs (Alabama, Alaska, Arizona, Massachusetts,
 Minnesota, New York, Pennsylvania, and Utah). In these programs, providers
 are given incentives to adopt electronic health records and electronic
 prescribing, often in conjunction with the collaborative efforts described
 above. Access to care is a continuing concern of state Medicaid directors,
 and that concern is reflected in the approaches they take in this area. An
 overwhelming majority of Medicaid directors state that their
 pay-for-performance priority is on improving quality, not on reducing cost.
     "Medicaid is not a new entrant into the field of pay-for-performance,"
 according to Kuhmerker. "We learned that almost half of all programs, in
 fact, are more than five years old." More than 70 percent of planned new
 programs are expected to start in the next two years.
     "The effort to link health care spending and quality is a growing
 phenomenon in the health care industry," said Karen Davis, President, The
 Commonwealth Fund. "Both quality and efficiency are key components of a
 high performance health system, and it is encouraging to see the states
 rewarding provider efforts in these areas."
     The study found that 70 percent of existing Medicaid
 pay-for-performance programs operate in managed care or primary care case
 management (PCCM) environments, with a focus on preventive health services
 and children's, adolescents' and women's health issues.
     "New programs are still focused mainly on managed care and PCCM
 providers," Kuhmerker said, "but appear to be shifting their emphasis to
 the quality and cost issues related to chronic diseases like asthma and
 diabetes."
     Hartman and Kuhmerker gathered information through a written survey
 sent to all state Medicaid directors, conducted follow-up interviews with
 the directors and their staffs, and reviewed a range of documents and
 Web-based resources on the programs. The study focused on programs that
 provide financial rewards for quality, efficiency and other program
 attributes. The study was conducted from May through October 2006.
     "Very few states have conducted formal evaluations of their pay-for-
 performance programs, but most Medicaid officials believe that the overall
 quality of care being provided is improving as a result of these programs,"
 said Hartman. "More research clearly needs to be done to assess the effects
 of pay-for-performance on the quality of care provided to Medicaid
 recipients."
     Historically, revenue generation in the health care system has been
 related to the quantity-rather than the quality or effectiveness-of work
 performed. In some instances, revenue can be generated when additional
 procedures are needed to correct previous errors or omissions. Pay-for-
 performance is an approach to reimbursing health care providers that is
 designed to alter this practice. As costs escalate rapidly, large
 purchasers of health care services-employers, health plans, and government
 programs-are embracing the pay-for-performance movement in an effort to
 improve the quality of health care and link health care spending to quality
 so that limited financial resources can be used more effectively.
     To view a copy of the study, please go to www.cmwf.org or www.ipro.org.
     The Commonwealth Fund is a private foundation working toward a high
 performance health system.
     IPRO is one of the largest and most experienced health care evaluation
 and quality improvement organizations in the nation.
     Contact:
     Dennis Tartaglia
     (212) 481-7000, dennist@mbooth.com
 
     Spencer Vibbert
     (516) 326-7767 ext. 588, svibbert@ipro.org
 
     Mary Mahon
     (212) 606-3853, mm@cmwf.org
 
     Sara Knoll
     (301) 652-1558, sknoll@burnesscommunications.com
 
 

SOURCE IPRO