Position Statement: Pay-for-Performance

The American Academy of Otolaryngology—Head and Neck Surgery (AAO-HNS) believes that quality care, access to care and positive health outcomes must be the primary goal of any physician reimbursement system. We encourage member physicians to continuously improve the quality of patient care through ongoing documentation and analysis of practice patient data and patient feedback. The AAO-HNS also believes that practices should take steps to ensure patients’ safety within the practice, including the use of electronic data and decision support systems. Payment reform is essential to supporting these quality improvement and patient safety initiatives within surgical practices.

However, there are a multitude of organizational, technical, legal and ethical challenges to designing and implementing pay-for-performance programs. The Academy also recognizes that there are both advantages (increased reimbursement, improved efficiency and quality) and disadvantages (cost of acquiring information technology, multiple programs and guidelines, data collection) to such programs as they are currently envisioned and being tested by CMS, state insurance programs,  private health plans, and self-insured employers and their third party administrators.

It will be challenging to produce payment incentives that are fair for all physicians and across specialties and service settings. Nonetheless, the Academy generally agrees that a performance-based payment system should incorporate the following six main principles:

• Focus on improved quality of care,
• Support the physician-patient relationship,
• Utilize evidence-based clinical guidelines,
• Involve practicing physicians in program design,
• Performance measures used are reliable, accurate and scientifically valid, and
• Provide positive physician incentives.

Specifically, the Academy will support and encourage pilot pay-for-performance programs that meet the following guidelines:

1. 1. The primary goal of pay-for-performance programs must be improving health quality and safety.
   2. Patient privacy must be protected.
   3. Practicing physicians and their professional organizations must be involved in the design of pay-for-performance measures and programs.
   4. Pay-for-performance programs must have systems to ensure the accuracy of data and data collection should not be burdensome to participating physicians.
   5. Physician participation in pay-for-performance systems should be voluntary and should not be punitive.
   6. Pay-for-performance incentives should positively reward physician participation in pay-for-performance programs, including physician use of electronic health records and decision support tools. Pay-for-performance programs should also account for physicians’ expenses for the administrative burden of collecting and reporting data.
   7. Pay-for-performance programs should not financially penalize physicians for factors beyond their locus of control.
   8. Pay-for-performance programs must foster the patient-physician relationship, and must not discourage physicians from treating patients with significant health problems or complications out of fear that they will have a negative influence on quality scores and reimbursement.
   9. There must be a mechanism for exceptions to pay-for-performance compliance metrics for clinical research protocols.
   10. Pay-for-performance programs must be pilot tested across a variety of clinical settings and specialties and should be phased-in over an appropriate period of time.
   11. Pay-for-performance programs should explicitly describe the data sources on which measurement is based (e.g., claims/administrative, medical records audit, patient and/or physician surveys, and/or pharmacy claims) and should utilize valid peer groups, evidence-based statistical norms and/or evidence-based clinical policies.
   12. Physician performance measures used in pay-for-performance programs must be clinically relevant, evidence-based, and broadly accepted.
   13. Physician performance measures must be fair and balanced across specialties. Measures must be developed using evidence-based methods, or consensus panels of expert physicians representing all relevant specialties, or created by the AMA’s Physician Consortium for Performance Improvement (The Consortium).
   14. Physician performance data should be adjusted for case-mix composition, including factors of sample size, age/sex distribution, severity of illness, number of comorbid conditions, and other features of physician practice and patient population that are outside the physician’s locus of control, yet influence the results.
   15. Performance measures must also be kept current to reflect changes in clinical practice.
   16. Rewards for performance should be based on both absolute values and relative improvement in values, as appropriate.
   17. For surgical procedures performed in the hospital setting, the processes that improve care frequently involve a surgeon-led team approach. Many of these processes are directed toward preventing costly complications, reducing length of stay, and avoiding readmissions, which substantially reduce hospital costs. Mechanisms must be established to allow performance awards for physician behaviors in hospital settings that produce cost savings outside the physician fee schedule.
   18. Physicians should have the ability to review and correct performance data on their own patients.
   19. Performance data should not subject to discovery in legal proceedings.

Important Disclaimer Notice (Updated 7/31/14)

Position statements are approved by the American Academy of Otolaryngology—Head and Neck Surgery or Foundation (AAO-HNS/F) Boards of Directors and are typically generated from AAO-HNS/F committees. Once approved by the Academy or Foundation Board of Directors, they become official position statements and are added to the existing position statement library. In no sense do they represent a standard of care. The applicability of position statements, as guidance for a procedure, must be determined by the responsible physician in light of all the circumstances presented by the individual patient. Adherence to these clinical position statements will not ensure successful treatment in every situation. As with all AAO-HNS/F guidance, this position statement should not be deemed inclusive of all proper treatment decisions or methods of care, nor exclusive of other treatment decisions or methods of care reasonably directed to obtaining the same results. Position statements are not intended to and should not be treated as legal, medical, or business advice.