Performance-based Payment Systems

The goal of pay-for-performance systems is to recognize and reward providers or staff members who provide higher-quality care. A pay-for-performance system demonstrates the value of behavioral health services to purchasers and helps providers align their practices with national standards. Incentive rewards can include reduced administrative burdens, higher fees, or even additional funds to apply to helping to spread a culture of change in the organization or state.

Pay-for-performance or incentive programs must be monitored to determine their overall effectiveness and to watch for unintended consequences on the quality of health care.

Note: An effective performance management system that includes high data quality, useful performance feedback reports, and participation from provider agencies is a pre-requisite for a pay-for-performance system. If these factors are not already in place, consider improving your performance management system first.

Additional Information

• Types of Performance-based Payment Systems
• Types of Incentives for Performance-based Payment
• Building a Performance-based Payment System
• Performance-based Payment and Sustainability