ACHP Statement: Institute of Medicine Report Makes Medicare Pay-for-Performance Recommendations

WASHINGTON, D.C. – Jack Ebeler, president and CEO of the Alliance of Community Health Plans (ACHP), issued the following statement today in reaction to the release of the Institute of Medicine’s (IOM) report, Rewarding Provider Performance: Aligning Incentives in Medicare, which says Medicare providers should participate in pay-for-performance as soon as possible.

“This is ultimately about better care for Medicare beneficiaries.  The quality of care that they receive varies from plan to plan and provider to provider, and falls short of the consistent standards of excellence that all deserve.  Yet we continue to pay high- and low-performers the same.

“That is why ACHP strongly supported the creation of the IOM panel that reported today, and applauds its work.  This report is well-timed to help inform the implementation of pay-for-performance in Medicare.  ACHP has worked with Congress over the past three years to move Medicare toward pay-for-performance, and we look forward to continuing that effort.

“ACHP applauds the IOM for recognizing that Medicare should begin phasing-in pay-for-performance by starting with Medicare Advantage plans, which already submit performance data for public reporting.  We also applaud the IOM’s recommendation that Medicare pay-for-performance should reward both those who improve performance significantly and those who achieve high performance.”     

ACHP’s four principles for payment-for-performance are:

  • Payment-for-performance incentives should eventually apply to all Medicare providers, including fee-for-service and Medicare Advantage. Given health plans long record of reporting on standardized measures of quality, it is reasonable to begin with Medicare Advantage plans, including HMOs and PPOs.
  • Pay-for-performance incentives should be based upon standards of excellence and improvement.
  • Measures to evaluate both fee-for-service Medicare and Medicare Advantage plans should be developed. In the interim, incentives should be based on existing measures and should emphasize clinical effectiveness.
  • To ensure successful implementation and sustainability, pay-for-performance incentives should be financed with a new, dedicated stream of funding.

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The Alliance of Community Health Plans brings together innovative health plans and provider organizations that are among America’s best at delivering affordable, high-quality coverage and care to their communities.  Drawing on years of experience, members collaborate, share strategies and work toward solutions to some of health care’s biggest challenges.  Their work is the foundation for ACHP’s advocacy on behalf of better health care nationally.  More information is available at