This article reviews the experience of a large, heterogeneous integrated delivery network that incorporated physician quality metrics into pay-for-performance contracts. The authors present criteria for including measures in pay-for-performance contracts and offer a practical approach to determining withhold return or bonus distribution based on improvement and performance. They demonstrate interventions undertaken to improve performance, including the development of a claims-based registry. Empirical data show that the network performance improved more than the comparable state and national performance during the period of this observational study. The authors conclude that pay-for-performance contracts led to development of medical management programs including a claims-based registry and nonphysician interventions, which helped significantly improve selected HEDIS scores.

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