Pay-for-Performance Encourages Physicians to 'Game' the System

September 19, 2012

A new editorial says pay-for-performance measures may not equate to providing the best care, and one physician agrees, saying it encourages gaming the system.

Pay-for-performance (P4P) reimbursement is an often debated issue - whether it’s fair, whether it works, whether it’s right for the healthcare system as a whole.

An interesting

reignites the debate: Does P4P measure a physician’s quality performance, or his ability to “game” the system?

According to the editorial, written by professors from the City University of New York School of Public Health and Duke University, a physician’s ability to receive higher reimbursement by meeting quality measures may not actually reflect his ability to improve the quality of care, but his ability to skew data in his favor.

“Risk adjustment is devilishly difficult, partly because key inputs - clinical diagnoses - aren’t solely patient characteristics but also reflect the aggressiveness of coding and diagnostic investigations,” the authors wrote.

Practice Notes blogger and pediatrician Daniel Essin told Physicians Practice he has seen data- skewing firsthand.

In the early 1980s, the California Medi-Cal Program “introduced more complicated formulas that paid different amounts for the same diagnosis or procedure depending on which code was chosen to describe what was done,” he said via e-mail. “Physicians found it expedient to experiment by submitting different codes on claims for patients with similar problems in order to discover which combinations yielded the highest payment.”

But this is also a more recent trend, said Essin. “Some of my colleagues report that they are seeing an increase in the amount of detailed but irrelevant information that is being incorporated into the notes of physicians using EHRs at facilities that have begun to link pay to performance.”

Another issue cited by the editorial is that physicians participating in P4P are often incentivized for process-based indicators, (i.e., whether they follow certain treatment protocols when caring for patients). But complying with such protocols does not always lead to the best patient care.

The authors point to a study that noted a Medicare incentive that rewarded hospitals for starting treatment for pneumonia patients within four hours of a patient’s arrival at the hospital. According to the editorial, this incentive resulted “in the administration of antibiotics to almost any patient in the emergency department with a cough.”

Still, if doctors manipulate P4P, does the fault really lie with them? Essin said doctors may simply be doing what the system is encouraging them to do, and in some cases, forcing them to do.

“The reimbursement system, the meaningful use scheme, and pay-for-performance scheme are all designed to encourage ‘gaming’ the system,” he said. “The goal of each scheme is to find excuses not to pay and to find reasons to pay as little as possible when payment cannot be avoided. Anyone who fails to exploit every loophole, and fails to bill for every possible allowable charge, will go broke.”

Do you think P4P encourages physicians to “game” the system?