Pay-for-Performance (P4P) continues to be a high priority issue for both Congress and the Administration as each sees this concept as a means of getting better, more efficient health care services for the same amount money. Although the concept has not been fully defined, in general, the goal is to identify quality indicators for health sectors, such as hospitals and physicians, and then gather data to assess whether patients are getting appropriate, cost-effective care. Hospitals are currently providing data on specified indicators get higher Medicare payments for doing so.  A similar mechanism was recently implemented for physicians.

How clinical laboratories will fit into this new quality/payment initiative has yet to be fully determined. In 2005, the Medicare Payment Advisory Commission (MedPac), an advisory panel to Congress on program-related issues, recommended that laboratory test results be submitted with claims data as a means of assessing physician performance. The clinical laboratory community opposed this effort, arguing that providing the data, at this time, could be administratively burdensome and costly for many laboratories. MedPac has since taken a more exploratory approach to the lab component of the issue.  This does not mean laboratory data is not part of P4P.  In fact, it’s an integral part of the initiatives and its role is like to grow. 

Under the Physician Quality Reporting Initiative (PQRI), which went into effect in the summer of 2007, some of the quality indicators that participating physicians must report information are based on laboratory results.  For example, physicians must report the percentage of patients aged 18-75 with diabetes (type 1 or type 2) whose most recent hemoglobin A1c was greater than 9.0%, as well as those whose recent LDL-C level was in control (less than 100 mg/dl).  It’s likely that additional laboratory tests will be included as part of future indicators given CMS’s interest in this area. In the fall of 2005, the agency announced an Open Forum to discuss laboratory participation in P4P, but backtracked once the laboratory community responded that they needed more time and clearer guidance from the agency before they could provide input.