“Pay for performance” (P4P) programs propose to link rates of reimbursement to achievement of specific indicators of quality care. This initiative grew out of several Institute of Medicine (IOM) reports and the care improvement paradigms embraced by the Leapfrog Group and others, which proponents believe will improve quality of care.¹ They also hope to save the U.S. health care system money, as P4P should reward efficiency and substitute quality-based payment for volume-driven payment.² Private payers have embraced P4P and already divert large amounts of money to quality programs. The Integrated Healthcare Association (IHA) began its P4P program in 2001.³ Other payers have initiated “pay for participation” programs in which practitioners and facilities can gain reimbursement by simply sharing outcome data rather than by hitting a particular quality “mark.”⁴

The government is set to fully invest in P4P; in 2005, a bill was filed in the U.S. Senate that proposed redirection of 2 percent of all physician payments to a subset of physicians achieving quality reporting targets (S.1392, 109th Congress). The use of performance-incentive dollars by private health plans also are expanding in both magnitude and the range of physician groups targeted. For example a Massachusetts Blue Cross/Blue Shield plan earmarked $33 million in incentive payments in 2004, with about $5 million directed toward specialist physicians. In 2006, those figures had ballooned to almost $190 million total, with $54 million for specialists (Boston Globe, May 10, 2006).

It is clear that physicians must take these efforts seriously and participate in the determination of how such programs will be structured and which metrics are to be used to “measure” the quality and determine payments. The Centers for Medicare & Medicaid Services (CMS) has invited specialty societies to provide recommendations for appropriate measures of quality to be used in the production of P4P programs. The American Medical Association (AMA) has invested more than $5 million on development of 140 measures that are expected to be ready for use by the end of 2006.⁵ Measures for P4P can be outcome, process or structural measures.

What Is an Acceptable Metric for a P4P Program?
The types of measures advocated for use in P4P programs should generally meet the following 10 criteria:⁶

1. High volume — the diagnoses involved must be relatively common.

2. Gravity — the conditions that are to be affected must be significant.

3. Evidence-based — process and structural measures may rest upon empirical evidence, but outcome measures require the more rigorous test of randomized, controlled trials in the peer-reviewed literature.

4. Gap — there must be evidence that a significant difference exists between the current practice and the best practice.

5. Probability — there must be likelihood that the intervention being promulgated will improve the outcomes as desired.

6. Reliability — the measure (or “metric”) is consistent when measured by various observers at various points in time and in various settings.

7. Validity — the metric must actually measure its intended endpoint and must be defined clearly among all stakeholders.

8. Feasibility — there must be a way to efficiently obtain the measurement.

9. Acceptance/approval — the metric should have been identified by such quality measurement organizations such as the National Quality Forum, the AMA’s Physician Consortium for Performance Improvement, the National Committee for Quality Assurance or by CMS itself.

10. Applicability in several settings — there must be utility of the metric in many practice settings, ideally ranging from the single-practitioner office to major medical centers.

Pain Medicine and P4P
Pain medicine will be the subject of P4P programs because pain is widespread⁷ and costs our society well over $61 billion a year in productivity.⁸ Treatment of pain is expensive, reaching more than $1.8 billion for interventional pain in 2001 and greater than $26 billion expended on back pain alone 10 years ago,^9,10 yet satisfaction with the quality of that pain treatment is often poor.¹¹ In 2005 and 2006, recognizing that no single specialty society speaks for pain, ASA, the American Pain Society, the American Society of Regional Anesthesia and Pain Medicine, the North American Spine Society, the American Academy of Pain Medicine and the International Spine Intervention Society collaborated on a recommendation to CMS for measures to be used for P4P in chronic pain medicine. The societies recommended as a valid measure the consideration of a comprehensive pain treatment plan, including patient- and practitioner-generated goals and therapeutic recommendations, and coordination of the patient’s care with other caregivers.

In those patients at risk to transition from acute to chronic pain, behavioral therapy can cause rapid and significant improvements in function by diminishing fear, anxiety and associated catastrophizing.^12,13 A multidisciplinary approach to pain therapy that includes behavioral, vocational and economic rehabilitation strategies is the most economic and effective approach to controlling and improving the pain and function of patients with chronic pain.^14,15,16,17 Indeed, detection of certain psychosocial risk factors early in the course of nonspecific low-back pain may identify those patients who are at risk for development of chronic low-back pain.¹⁸ Also, engaging patients in the process of setting their own goals for improvement and making the treatment plan “patient-centric” is an important factor in successful chronic pain care.¹⁹ Finally, communication and coordination with other caregivers is a necessary aspect of appropriate pain care. CMS may make documentation of care coordination a part of most P4P programs because, as the Medicare Payment Advisory Commission, or MedPAC, notes, “Care is inefficient if providers do not coordinate across settings or assist beneficiaries in managing their conditions between visits.”²⁰

Six metrics were chosen as appropriate measures congruent with this evidence. The anticipated structure of a P4P program would be of reimbursement predicated upon documentation that the six tenets were considered in the care of each patient. Reimbursement would not be predicated upon the active performance of each item in all patients, as they would not always be applicable in all chronic pain patients. The six metrics chosen were:²¹

1. Patient education about and inclusion in pain management planning when appropriate;

2. A contingency plan for treatment of any future poorly controlled pain;

3. Documentation of any indications for behavioral-cognitive therapy and actions taken, if any, to provide such therapy;

4. Indications and intent regarding consultation of other health care professionals, including physical or occupational therapists;

5. The plans for follow-up assessments and a description of resources available to the patient for obtaining unplanned (emergent/urgent) follow-up care; and

6. Timely reporting of the patient’s condition and the pain management plan to other health professionals attending the patient, to include at minimum the patient’s primary care physician (if available).

Figure 1 shows one possible manner in which a health care form could be amended to allow these six steps to be efficiently documented on every patient. Whether or not these proposed measurements or others will be chosen by either public or private payers is not yet clear.

How Much P for P?
The incentive sizes that have been discussed usually range from 1 percent to 5 percent of a physician’s total revenue.²² Providing more money has increased quality in specific markets, but P4P is early in its evaluation.²³ One of the lessons learned at IHA is that larger amounts of payment will induce more rapid and widespread compliance with the program objectives, and as a result, it has instituted an increase in its bonus program that will reach as high as 10 percent by the end of the decade, up from an initial 1.5 percent. Some postulate that incentives as high as 20 percent will be necessary to effect quality improvement. It must be remembered that these are “holdbacks” and that the rewards of these programs will be extracted from the reimbursement of those who do not meet the P4P targets and those not participating.²⁴

Figure 1 (Click to Enlarge)

One possible manner in which a health care form could be amended to allow efficient documentation on every patient.

Other Quality Incentive Programs
Differential payment is, however, only one of the tools contemplated by purchasers and payers for promoting improved quality. Offering providers designation as “centers of excellence” and accompanying such designation with reduced patient co-pays, for example, are believed to induce quality by providing a competitive advantage over other providers. In the long run, it is fair to assume that any quality data reported to health plans or the government is likely to be distilled into a public report card on the Internet, such as Medicare’s hospitalcompare.gov or California’s Healthcare Quality Report Card <www.opa.ca.gov/report_card>. This approach may indirectly provide financial benefit by driving increased patient volume, but it requires a competitive marketplace to function and consequently will have little impact in underserved localities or scarce services.

Pain medicine physicians will need to stay attentive to both private and public payer announcements regarding incentive and “quality” payment programs. ASA will continue to work closely with the other specialty societies and AMA to try to keep any such programs as grounded in scientific evidence as possible and to make certain that the cost of participation in such programs (clerical and physician time) is as small as possible.


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Alexander A. Hannenberg, M.D., is Associate Chair, Department of Anesthesiology, Newton Wellesley Hospital, Newton, Massachusetts.

Douglas G. Merrill, M.D., is Staff Anesthesiologist, Virginia Mason Clinic, Seattle, Washington.