Making pay-for-performance a significant portion of doctor income

For Inland Empire Health Plan (IEHP), a nonprofit HMO operating in California's Riverside and San Bernardino counties, pay-for-performance started in 1997 with an incentive for childhood immunizations and has grown to an annual $12 million program paid directly to physicians. IEHP officials say pay-for-performance (P4P) has helped increase the timeliness of preventive health services and improve HEDIS results to the point that IEHP is in the 90th percentile nationwide for well-child visits in the first 15 months of life and for Medicaid plans for the timeliness of prenatal care and postpartum care. The plan also has the highest rate in California for adolescent well-care visits, and is in the 90th percentile nationally for immunizations for Medicaid plans.

IEHP chief medical officer Bradley Gilbert tells State Health Watch that IEHP has 300,000 low-income members involved in Medicaid, SCHIP, and California's Healthy Kids programs. Because many of the providers are in solo or small group practices rather than large groups, Mr. Gilbert says it is critical that incentive payments go directly from IEHP to the physicians rather than going to a corporate entity to be passed on. Incentive payments have become a significant portion of physician income, he says, and IEHP has structured the program so it sends payments within 60 days of the service date as long as the doctors meet their information reporting requirements.

IEHP's program focuses largely on preventive services such as immunizations, well-child visits, and Pap tests that may represent missed opportunities for providers who are more focused on dealing with members' acute or emergent needs.

"One of our initial goals was to significantly decrease 'missed opportunities' at our PCP offices, for example, those interim mild illness visits that could incorporate immunizations or even a well-child visit, but the preventive service does not happen," Mr. Gilbert said. "In addition, we wanted to improve the quantity and quality of our administrative data in these areas, as well as increase physician reimbursement. We have accomplished all these goals by using a fee-for-service model directly related to the service provided. In our overall capitated model, our P4P funds have motivated our physicians to provide and report these services for our members."

Launched in September 1997, the goal of IEHP's immunization program was to increase immunizations for members from birth to age 2 by reimbursing physicians for timely vaccines. In April 2000, a physician incentive program was launched, and additional components were added: well-child visits, an adult physical, perinatal services, and a health education behavioral assessment. Physicians were reimbursed $50 for each well-child visit done in accordance with the IEHP well-child visit schedule for members ages 0-18 years. Exams completed during the first 120 days of enrollment earned an additional $50 bonus.

"For perinatal services, we took a different approach," Mr. Gilbert said. "We were trying to motivate our OB/GYNs to get patients into the office early in their pregnancy. So we stratified the payments by trimester, higher for first, etc., for that first visit on top of the regular fee-for-service for the medical care component of the perinatal care."

In the next three years, the behavioral health component was dropped, and Pap tests, chlamydia screenings, and diabetes exams were added. In 2004, IEHP retooled the program to be more HEDIS-focused.

"We implemented two bonuses that have had major positive impact," Mr. Gilbert explained. "One is the completion of six well-child visits by 15 months, and the other is the submission of a complete immunization record in California, called a yellow card, which has turned out to be a great source of data. That has become a major motivator for our physicians to get members caught up."

In September 2005, IEHP added an incentive program focused on appropriate asthma care. It reimburses providers for clinical processes, such as the completion of an asthma progress note, based on national guidelines for asthma care, at every visit. Physicians can earn up to $100 per year, per member with asthma.

P4P can be 15%-30% of income

Mr. Gilbert tells SHW that many IEHP physicians earn 15% to 30% of their total income from the P4P programs. And he says part of the reason for its success is that it is such a substantial portion of income.

"If it represented 3% to 5% of their income, they wouldn't pay attention to it," he says candidly, noting that some physicians can receive $8,000 to $10,000 or even $15,000 per month from the program, in addition to the IPA capitation payment.

Mr. Gilbert is well aware of critics who complain that P4P is rewarding physicians well for things they should be doing on their own.

"One of the things I had to get over was why we should be paying doctors for doing what they should be doing," he says. "What I think we're doing is motivating them to think about things systematically. I've come to realize it's totally OK if our members and our health plan get what they need and the doctors deliver good care. Yes, the highest- quality doctors would be doing these things anyway. But many of our doctors are in solo practice and are somewhat disorganized. They need motivation. It's not that they're bad doctors, but it takes a fair amount of effort to get organized. And they have relatively poor electronic capability."

IEHP's incentives are tied directly to activity doctors are asked to do, he says. The program makes a lot of process payments such as for asthma forms and diabetes testing, and also outcomes measures.

"We like the combination of process and bonus," Mr. Gilbert says.

To try to take the program to the next level, IEHP is starting a push for more mammograms, but then will focus on steps being taken when an abnormal mammogram is found.

"We may still make a process payment so they'll do the test," Mr. Gilbert says, "but we then want them to focus on what happens after."

[Contact Mr. Gilbert at (909) 890-2005, or e-mail:]