Details emerge on new pay-for-performance test plan

CMS hopes to recruit 800 solo or small- to medium-sized physician practices for the three-year Medicare pilot.

By David Glendinning, AMNews staff. Nov. 6, 2006.

Washington -- To date, Medicare's ventures into the world of pay-for-performance have been focused on hospital systems and larger physician practices. Next year, though, some smaller operations will get an opportunity to experience this world, too.

The Centers for Medicare & Medicaid Services has announced details of its Medicare Care Management Performance Demonstration, a three-year pilot project starting in 2007 that will create incentives for small- and medium-sized practices to coordinate better the care they provide to Medicare beneficiaries with chronic conditions. Congress mandated the demonstration in 2003 as part of its Medicare modernization legislation, along with a large-practice program that has been in operation for about 18 months.

The new project aims to determine whether offering financial bonuses to physicians for meeting quality goals through care coordination will improve patient care. Although practices will receive an extra payment for the first year merely by participating, more reimbursements for years two and three will depend on the degree to which the practices follow 26 separate CMS-approved clinical guidelines for chronic illness. CMS hopes to recruit roughly 2,800 physicians in about 800 practices in Arkansas, California, Massachusetts and Utah.

Offering up to $10,000 per year and up to $50,000 per practice for hitting the targets, the agency is confident that it can support a move toward higher quality and efficiency at the sites of care that seniors access the most, said outgoing CMS Administrator Mark McClellan, MD, PhD.