Question

Find your state’s Medicaid program and use the components of its existing or planned P4P system to complete the following exercises. If your state’s Medicaid program is one of the few that has not implemented P4P and does not plan to implement P4P, select a neighboring state for these exercises. See Kuhmerker and Hartman 2007b, Appendix B, 1-82.

Which providers are targeted by P4P?

What is the type of incentive and its methodology?

What are its measures?

Does the P4P system use the HEDIS® measures? See the list of the HEDIS® measures at the Web site of the National Committee for Quality Assurance http://www.ncqa.org/HEDISQualityMeasurement.aspx

Scenario. A family physician sees approximately 29 patients per day (Gottschalk and Flocke 2005, 490-491). Of these 29 patients per day, 5 are Medicaid patients and 3 of those Medicaid patients are well-babies. The state Medicaid plan has implemented P4P and is utilizing the HEDIS® measures. One of the measures is that well babies have 6 office visits by 15 months. At the current time, the family physician receives a $100 bonus per baby with 6 or more well-baby visits by 15 months. The Medicaid program has proposed two methods of restructuring the incentives:

$25 bonus for each set of 3 well-baby visits to the family physician and a $15 gift certificate for each set of 2 well-baby visits to the parents

$100 bonus per baby receiving 5th well-baby visit and polio, hepatitis B, and Haemophilus influenzae type b (Hib) vaccines by 13 months and a second $100 bonus for the 6th well-baby visit by 15 months and relevant vaccines

Of the three methods, current and two proposed, which method would result in the highest financial reward for the family physician? Which method would result in the lowest financial reward for the family physician?

Answer 1

Patients visiting number per day = 29

Medicaid patients visiting number per day = 5

Well babies visiting number per day = 3

Generally 30 days per month, so the total numbers of well babies visit per month = 90

Current time:

As per measure, well babies have 6 visits per month. Hence at the end of 15^th month, the family physician receives $100 bonus per baby with 6 or more visits.

Total bonus = 90 * $100 = $9000

Method 1:

As 3 well babies visiting the family physician per day and considering it as a set of well babies, a total of 30 set of well babies visits per month.

Total bonus = 30 * $25 * 15 (month) = $11250

Method 2:

Total no. fifth well babies visits by 13 month = 90 (consider first months)

Total no. sixth well babies visits by 15 month = 90

Total bonus = 90 * $100 + 90 * $100 = $18000

The family physician will obtain highest financial rewards if the method has been followed:

$100 bonus per baby receiving fifth well-baby visit and polio, hepatitis B, and Haemophilus influenzae type b (Hib) vaccines by 13 months; and a second $100 bonus for the sixth well-baby visit by 15 months and relevant vaccines.

The family physician will get lowest financial reward by following the current method. i.e $100 bonus for sixth well babies visit by 15 month.