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Pay for Performance

Under a "pay for performance" (PFP) approach, a health insurer or other payer compensates physicians according to an evaluation of physician performance, typically as a potential bonus on top of the physician’s fee-for-service compensation. The payer bases its evaluation on the data it has on that physician or physician group—most commonly, administrative or claims data which measures the quality and/or cost of care. Patient satisfaction data may also be a factor. Using these data, the payer then rates the physician or physician practice according to the payer’s own criteria. Those physicians who meet the payer’s targets may receive perks such as bonus payments.

Chapter three: Pay-for-performance

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