Pay-for-Performance Policies

Research SummaryPublished Dec 21, 2023

Make additional payments to medical and behavioral health care providers for improving the quality and value of the opioid use disorder (OUD) treatment that they are giving. Supplemental payments above the negotiated price for services are made through public and/or private health insurers to the providers based on pre-defined proportions of their client population meeting specific benchmarks in the treatment process (e.g., early engagement and retention in OUD treatment; engagement and/or retention on medication for OUD for six months).

A panel of experts rated how they expect this type of policy to affect four outcomes: OUD treatment engagement, OUD treatment retention, OUD remission, and OUD overdose mortality. Another panel of experts rated the policy on four decisionmaking criteria: acceptability to the public, feasibility of implementation, affordability from a societal perspective, and equitability in health effects.

Policy Recommendations According to Expert Ratings

Oppose Uncertain Support
No
Yes
No

Summary of Expert Ratings

Outcomes Effect Rating
Harmful Little-to-no Beneficial
OUD Treatment Engagement
No
Yes
No
OUD Treatment Retention
No
Yes
No
OUD Remission
No
Yes
No
Opioid Overdose Mortality
No
Yes
No
Criteria Implementation Rating
Low Moderate High
Acceptability
No
No
Yes
Feasibility
No
No
Yes
Affordability
No
No
Yes
Equitability
No
No
Yes

Summary of Expert Comments

  • Experts expect this policy to have minimal effects on all four outcomes given evidence that real-world implementation of pay-for-performance models tends to underperform.
  • Experts find this policy to be highly implementable based on all four criteria.
  • Experts think the public generally supports policies intended to improve treatment quality through market-based incentives.
  • Experts view existing infrastructure and several examples of successful implementation as evidence that pay-for-performance models are feasible and affordable.
  • Experts generally agree that incentives based on standardized, objective quality measures could be a mechanism for equitable impacts, but numerous experts expressed concerns that these policies incentivized cherry-picking healthier patients, thereby exacerbating disparities.

Outcome Summaries

OUD Treatment Engagement

Percentage of people meeting the criteria for an OUD diagnosis who receive two or more OUD treatment services (including medication for OUD) within 34 days of initiating treatment.

Effect Rating Summary of Expert Opinion Representative Quotations
Beneficial Treatment engagement can be an effective focus of pay-for-performance policies. “Because [these] policies often focus on health care engagement, specifically treatment initiation and retention, I would expect there to be a change in these health system performance measures”
Little-to-no
(selected)
 Pay-for-performance policies tend to underperform, particularly with specific structures and incentives. “[Pay for performance] generally works but depends on the magnitude of the incentive. Often the implemented magnitude is insufficient, and many programs still will not offer [medication for OUD] for ideological reasons”
Harmful N/A N/A

OUD Treatment Retention

Percentage of people meeting the criteria for an OUD diagnosis who remain continuously enrolled in OUD treatment services for at least six months.

Effect Rating Summary of Expert Opinion Representative Quotations
Beneficial Pay-for-performance policies could improve treatment retention if appropriate incentives are implemented. “Incentive payments to providers can help retain individuals in treatment if there is [a] bonus for retention”
Little-to-no
(selected)
 Initial improvements in engagement (if any) tend to wane in pay-for-performance models, because retention is a much harder threshold to achieve, with many factors influencing it. “I worry that this will increase the short-term treatment, but most pay-to-play initiatives are not long-lasting and are ineffective”
Harmful N/A N/A

OUD Remission

Percentage of people meeting the criteria for an OUD diagnosis who do not experience OUD symptoms (other than craving/desire/urge for opioid) for at least 12 months.

Effect Rating Summary of Expert Opinion Representative Quotations
Beneficial Pay-for-performance models could improve patient outcomes if they improve the quality of care. “If the quality of care truly increases among most treatment programs, then remission may be seen more often. This would be especially useful if programs that do not currently provide medication were impacted negatively unless they start providing [medication-assisted treatment]”
Little-to-no
(selected)
 Pay-for-performance models tend to focus on treatment utilization and not to appropriately tailor services to individual needs, limiting impacts on patient outcomes. “As far as I know, the incentives are for treatment utilization not for treatment outcomes. While this is better than the fee for service model, it still provides a disincentive for getting people to the point where they no longer meet the criteria for OUD and no longer require services. So, in my opinion, financing policies encourage treatment but not necessarily remission”
Harmful N/A N/A

Opioid Overdose Mortality

Per capita rates of fatal overdose related to opioids, including opioid analgesics (e.g., oxycodone), illegal opioids (e.g., heroin), and synthetic opioids (e.g., fentanyl).

Effect Rating Summary of Expert Opinion Representative Quotations
Beneficial Pay-for-performance models that improve the quality of addiction treatment should reduce overdose mortality among those engaged in the health care system, especially if incentives exist to help those most at risk for overdose. “There should be decreases in overdose mortality with high-quality treatment”
Little-to-no
(selected)
 Minimal impacts on engagement, retention, and patient outcomes translate into minimal impact on overdose mortality. In addition, providers in pay-for-performance models may (be incentivized to) avoid high-risk patients. “Some evidence suggests that patients with more complex needs might be excluded or discharged by providers who are worried about getting lower treatment ratings”
Harmful N/A N/A

Implementation Criteria Summaries

Acceptability

The extent to which the policy is acceptable to the general public in the state or community where the policy has been enacted.

Implementation Rating Summary of Expert Opinion Representative Quotations
High
(selected)
 Public supports policies intended to improve treatment quality through market-based incentives. “It seems the general public would broadly favor P4P policies, given the American belief in merit-based systems”
Moderate The general public tends not to know or have any opinion about these policies. “In my experience these types of policies generally aren't noticed by the general public”
Low N/A N/A

Feasibility

The extent to which it is feasible for a state or community to implement the policy as intended.

Implementation Rating Summary of Expert Opinion Representative Quotations
High
(selected)
 While complex to implement, several states already successfully have pay-for-performance policies. “Seems entirely feasible, particularly if patterned after successful programs”
Moderate Possible but difficult to implement because of limitations in current quality measures, infrastructure to measure performance, and access to administrative data. “This is hard—the state of quality measures in OUD treatment is poor at this time—there are many measures, most of which are process measures and based on [administrative] claims data. There is very little harmonization of measures across the field, let alone between levels of accountability to drive forward system-wide improvements through value-based payment arrangements and joint accountability”
Low Stigma toward people with OUD will hinder effective implementation. “I don't think it's very feasible at all simply because of the stigma and unwillingness to properly treat [people] who have OUD”

Affordability

The extent to which the resources (costs) required to implement the policy are affordable from a societal perspective.

Implementation Rating Summary of Expert Opinion Representative Quotations
High
(selected)
 Many states can use existing infrastructure, and models that successfully improve treatment retention and patient outcomes will be cost-effective due to societal benefits. “Value-based payment requirements can be incorporated into the [Medicaid managed care organization] contracts at no cost to the state. The only cost might be consulting time to set up the language correctly”
Moderate Concerns that if a state does not have the required infrastructure, it will be expensive to develop. “Development of the infrastructure for assessing the performance of the organizations and providers is a major investment and is challenging because performance data on treatment for alcohol and drug use disorders is not currently integrated into the major electronic health records”
Low N/A N/A

Equitability

The extent to which the policy is equitable in its impact on health outcomes across populations of people who use opioids.

Implementation Rating Summary of Expert Opinion Representative Quotations
High
(selected)
 Pay-for-performance incentives with standardized and objective quality measures could result in equitable improvements to treatment utilization. “This payment method increases the opportunity to engage and retain all patients by increasing staff and training, community outreach and follow-up”
Moderate Depends on how the policy is implemented. “It depends on how it is implemented on the ground. If this encourages providers to offer buprenorphine but then ... intersectional stigma influences providers to offer care disproportionately across patient groups, it would result in inequitable care”
Low Pay-for-performance models can (unintentionally) incentivize providers and organizations to avoid high-risk patients (because it incentivizes cherry-picking healthier clients and societally advantaged populations), exacerbating existing disparities for underserved populations. “Unless an extensive risk stratification is rolled out, this would put people with most severe use disorders and most complex psychosocial circumstances at risk for being denied care or quickly discharged from care. These are the exact individuals who need services most, yet a model like this would incentivize clinics to avoid these patients. Risk stratification would be CRITICAL and would likely require a broad psychosocial risk assessment”
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Pay-for-Performance Policies. Santa Monica, CA: RAND Corporation, 2023. https://www.rand.org/pubs/research_briefs/RBA3054-24.html.
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