Pay for Performance in Five States: Lessons for the Nursing Home Sector

Pay for performance (P4P) aims to use reimbursement to incentivize providers to deliver high-quality services. This article examines P4P in five Medicaid nursing home programs: Iowa, Minnesota, Oklahoma, Utah, and Vermont. It describes each program and draws lessons regarding program participation, financing, measurement, administration, and development. Findings highlight the importance of obtaining stakeholder input, both initially and on an ongoing basis. Findings also highlight the need to provide opportunities for acceptance and learning by phasing in programs slowly, beginning with performance measurement, followed by public reporting and, finally, by introducing P4P incentives. Funding P4P using new appropriations, incorporating multiple quality measures and domains, and relying on existing data sources when possible were deemed important; so, too, was allowing programs to evolve over time to account for innovations in quality measurement.