More than half of all state Medicaid programs have pay-for-performance initiatives to provide doctors with financial incentives for improved care, and that proportion is expected to grow to about 85% within five years, according to a new report from the Commonwealth Fund.
The study, which surveyed all 50 state Medicaid programs and was conducted between mid-May and mid-October of 2006, highlights the continued growth in both the private and public sector of initiatives that link reimbursement incentives to improved quality and cost-effectiveness.
Those incentives include bonuses, differential reimbursement rates, grants and penalties, according to the report, which concluded that many Medicaid directors continue to have mixed opinions about cost savings from the programs.
Still, the vast majority of state Medicaid directors reported that their priority in the incentive plans is to improve the quality of care rather that cut costs. Ultimately, the biggest challenge facing both state Medicaid P4P programs, and those operated under other auspices, is to determine their effectiveness, according to the study.
Overall, researchers concluded, state Medicaid directors believe that pay-for-performance is adding to their repertoire of tools to improve the care provided to their Medicaid populations.