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Majority of HMOs have pay-for-performance programs

Physician Practice Advisor, November 8, 2006

More than half of the nation's HMOs used pay-for-performance programs in their contracts with physicians and hospitals in 2005, according to a study sponsored by the Agency for Healthcare Research and Quality (AHRQ).

Of the 242 HMOs surveyed, 52% said they used pay-for-performance in provider contracts in 2005. Of the HMOs using pay-for-performance for physicians, 13% made payments directly to individual physicians, one-third were designed to reward only top-performing physicians, and nearly two-thirds offered rewards to physicians who met a predetermined performance threshold.

Pay-for-performance arrangements were more common in HMOs that use primary care physicians as gatekeepers to specialty care or capitation arrangements that pay primary care physicians a set amount based on the number of patients in a plan.

Click here to read the AHRQ press release.