News & Commentary

P4P Program in Medicaid ACO Does Not Live Up to Expectations


The sports adage “that’s why we play the game” (often paired with the “on any given Sunday” adage) can perhaps be tweaked for academia. How about: “That’s why we do the studies.”

Ohio State University researchers began to study a pay-for-performance (P4P) program at a pediatric accountable care organization (ACO) with some preconceptions. “We hypothe­sized that the community physicians receiving P4P incentives would improve their performance more over this period than either the non­incentivized community physicians or the salaried hospital physicians.”

They were a bit off-mark, as they pointed out in their study, published online January 25 in JAMA Pediatrics. Quality did indeed improve for the ACO doctors, but only moderately, and quality for the salaried hospital-affiliated physicians improved more.

The study compared pre-incentive outcomes (2010–2011) with post-­incentive outcomes (2012–2013). The three groups were Partners for Kids (PFK), an ACO for Medicaid managed care children; physicians in the community not affiliated with PFK; and doctors working for Nationwide Children’s Hospital in Columbus. Doctors who were contracted with PFK were paid on a fee-for-service basis plus an incentive bonus for reaching certain benchmarks.

The data capture 2,966 individual physicians in at least 132 practices. There were 203 incentivized physicians, 2,590 nonincentivized physicians, and 173 nonincentivized hospital physicians.

PFK doctors received 50 cents per member per quarter (PMPQ) if they accepted at least 500 Medicaid patients per physician averaged over the practice. They were paid an additional 50 cents PMPQ for completing a certification program, and another 50 cents PMPQ for being recognized by the NCQA as a patient-centered medical home. Most of the incentive money was distributed based on HEDIS scores. The quality payments ($40.18 in 2012 and $41.39 in 2013) were made per successful patient and were paid to the patient’s attributed physician group, according to the study.

Almost all measures improved for all physician groups. The incentivized measures included well-child visits, asthma care, and immunizations.

Researchers wanted to see just how ACOs might affect physician performance. Most P4P programs are initiated by a payer, not a physician-driven entity such as an ACO, they noted. Previous research suggested that a physician-centric, ACO-developed P4P program may win greater physician acceptance. The Ohio State researchers mentioned that the research on how to develop P4P programs is limited, and the role of new factors—such as the introduction of electronic health records—has yet to be fully accounted for.

The PFK doctors did a little better than the doctors in the community, but the salaried doctors at the hospital did better than everyone.

The takeaway: “Our results suggest that P4P can work in a pediatric ACO but that it may not deliver the magnitude of improvement in quality that organizations seek.”

The researchers speculate that the size and duration of the incentive might help P4P efforts, and there may be ways other than incentives to motivate physician change.

“The involvement of physician leadership in helping determine the incentives may have been useful in engaging physicians and increasing acceptance,” the study says. “The physician-led nature of ACOs should position these organizations to create programs of greater impact. At present, there [are] insufficient data about the structure of medical leadership in ACOs to draw conclusions about best practices.”