Rise of Pay for Performance

Many health care providers and policy makers believe that health care financing systems fail to reward high-quality care. In recent years, federal and private payers have begun to promote pay for performance, or value-based purchasing, initiatives to raise the quality of care. This report describes conceptual issues in the design and implementation of pay for performance for chronic kidney disease and ESRD care. It also considers the implications of recent ESRD payment policy changes on the broader goals of pay for performance. Congressionally mandated bundle payment demonstration for dialysis, newly implemented case-mix adjustment of the composite rate, and G codes for the monthly capitation payment are important opportunities to understand facility and provider behavior with particular attention to patient selection and treatment practices. Well-designed payment systems will reward quality care for patients while maintaining appropriate accountability and fairness for health care providers.