Medicare Compliance & Reimbursement

Medicaid managed-care P4P demo reveals solutions for future programs.

Providers won't cooperate with pay-for-performance (P4P) programs in Medicaid managed care if health plans don't offer up enough money, according to a P4P demonstration's results.

Communication between providers and plans also played a crucial role in determining the results of the Local Initiative Rewarding Results Collaborative Demonstration, a 2003 through 2005 P4P demo that the California HealthCare Foundation and the Robert Wood Johnson Foundation funded. The demo focused on improving the timeliness of well-baby care.

Researchers from Mathematica Policy Research detailed their conclusions from the P4P demo in a recent Health Affairs article. In the project, five health plans implemented new incentives for primary care providers and physicians and two plans didn't. The goal for the five P4P programs was to incentivize providers to perform six well-baby check-ups within the first 15 months of the baby's life. Mixed Results, But Important Insights The incentives in four out of the five plans gained no significant effects, the researchers find. In one plan, which the researchers call "Plan D," the P4P incentives may have had positive effects, but data constraints prevented the researchers from confirming the changes, according to the Health Affairs article.

From studying the five health plans during the demo, the researchers discovered several elements that may determine the success of P4P in Medicaid managed care:

• Good provider-health plan communication. Plan D communicated well with providers, the researchers note.

• Higher-dollar incentives. Plan D gave out bonuses to providers for each additional well-baby visit. The maximum bonus allotment was $470 per infant, per provider, the researchers say. This bonus was in addition to the provider's regular capitated payment. In contrast, Plan B offered only $100 to providers for performing the six well-baby visits and offered physicians no bonuses until they reached the six visits.

• Habit. Plan D already offered well-baby visit incentives before the demonstration began, so the providers were already used to reporting such administrative data to the health plan, the Health Affairs article notes. Plan B, on the other hand, offered no incentives for well-baby visits prior to the project.

• Low-income patients/providers. Under all five plans, low-income parents had a difficult time attending the six well-baby visits, the researchers say. Low-income parents often lacked transportation, tended to be more focused on economic subsistence and were less likely to see the same provider during the 15-month period. Also, providers with limited means lacked the funds, staff and technology needed to perform the patient outreach that is critical to improving well-baby visit rates, the Health Affairs article explains.

• Less plan competition. "The incentives would have been much stronger if competing plans in the same market area had jointly implemented them, to touch a higher proportion [...]