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February 26, 2008

California Health Plans Pay $65 Million to Improve Performance in Patient Care

Physician Groups Rewarded for Achieving Pay for Performance Measurements with Payments That Exceed Prior Year by More Than $10 Million.

Pay for performance (P4P) bonus payouts from health plans to California physician groups to reward quality of patient care totaled $65 million in 2007, according to the Integrated Healthcare Association (IHA). The payments were distributed during the third and fourth quarters of 2007 based upon the 2006 performance of physician groups serving HMO members. Aetna, Blue Cross of California, Blue Shield of California, CIGNA HealthCare, Health Net, PacifiCare, and Western Health Advantage participated in the performance payments with each health plan determining its own budget and methodology for calculating bonus payments to the physician groups.

These health plans have distributed over $210 million in payments to physician groups as a result of meeting P4P quality measures in the first four years of the program. The total financial payout equates to about 2 percent of the overall reimbursement to physician groups annually. Payments to individual groups vary from no payments to payments equaling up to 5 percent of overall reimbursement based upon performance.

Payments are typically paid on how well a physician group performs versus its peers, but emphasis is also placed on groups that show significant improvement over prior years. Participating health plans have been encouraged to allocate 20 percent of 2008 bonus payments for physician groups that make the most significant improvements.

Another incentive to promote improved physician group performance involves public reporting of results. Annually the results for each performance measure are reported by physician group on a website managed by the California Office of the Patient Advocate (OPA).

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Posted by healthinsurance at February 26, 2008 09:50 PM

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