P4P Physician Compensation

Why implementing pay-for-performance is challenging

Medicare’s Merit-based Incentive Payment System (MIPS) aims to link physician quality of care to their reimbursement.  At first glance, paying more to high quality physicians seems like a great idea. However, a paper by Liao et al. (2018) surveys physicians from a large national sample maintained by the American College of Physicians (ACP).  They find some key concerns physicians have over MIPS:

Respondents reported believing that MIPS would encourage behaviors that could represent unintended consequences (results not shown). The majority believed that it would encourage physicians to “focus on aspects of care being measured to the detriment of other unmeasured aspects of care” (69 percent), “avoid sicker or more medically complex patients to improve performance on quality or utilization measures” (60 percent), and “change clinical documentation to improve performance on quality measures” (56 percent).

In part due to these concerns and the reporting burden it placed on physicians, the Medicare Payment Advisory Commitee (MedPAC) recommended eliminating MIPS and instead creating a voluntary value-based reimbursement scheme for physicians.



  1. Merit and Value-based care are all well-intended. Healthcare is a continually, if not radically evolving field. Finding a way to control costs while delivering “adequate” care is the goal of CMS. As the metrics change, so do the ways to collect the data, and skew the data. At what point do the regulatory burdens and documentation outweigh the need for time to be spent with patients? The doctor shortage, network inadequacies, and time spend delivering patient care could be alleviated by removing so many “necessary steps.”

  2. The idea of clocking in and clocking out for work is appealing to me. Whatever the patient needs I’ll address at the time of the visit. However, even if I don’t care about payment models, most of us physicians are choosing to work for employers. In a way, we end up doing whatever our employer demands. At a large HMO which I used to work at, medicare refresh was a big deal – that’s really all that mattered. Patient had knee pain and I would have loved to address it but I needed to meet my refresh goal of 60% and refresh all their diagnosis of hypertension, diabetes, atherosclerosis, hyperlipidemia.

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