Pennsylvania Health Care Quality Alliance > For Insurers

For Insurers

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Evaluating Performance Using Common Measures

One of Pennsylvania Health Care Quality Alliance's (PHCQA) goals is to help insurers evaluate the performance of their hospital provider networks. The PHCQA set out to accomplish this by developing a baseline set of genuine measures of clinical quality on which all Pennsylvania providers and insurers can agree. This first report represents quality measures which have been reviewed, discussed and agreed upon by representatives from all participating organizations. These collaborative discussions took place in an open forum which was nonbinding, inclusive by nature, and free of contractual or financial obligations. PHCQA participants are asked only that they regularly contribute to and/or participate in dialogue and that they conduct all deliberations and make decisions by methods that reasonably represent all relevant and affected parties.

The PHCQA believes that agreement on a standardized approach to hospital quality will allow for providers and insurers to focus on measures which have a significant impact on the quality of care, and help to reduce the noise created by the growing number and variety of health care "report cards." While we aim to develop a common approach to quality measurement, the PHCQA is not designed to replace or supplant existing state and federal quality and safety data requirements, but rather to work together on a common way of understanding and depicting the data and measures that providers are already required to report in Pennsylvania.

How does this effort relate to what health plans are already doing in the areas of transparency and quality improvement?

The PHCQA recognizes that existing required data activities and efforts related to measuring performance will need to continue until such time as they can be replaced or enhanced with new, standardized measures. However, the Alliance believes that transparency is more effective if it is accomplished collaboratively and without coercion or fear of negative consequences (e.g. reputation, financial).

In terms of quality improvement, the PHCQA plans to identify ways of translating performance results into initiatives or education that most benefit Alliance participants and lead to improved health care outcomes for all patients in the Commonwealth of Pennsylvania.

Can insurers use the PHCQA's measures as part of their pay-for-performance programs?

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One of the objectives of PHCQA is to endorse specific health care quality measures for insurers to use in monitoring the performance of their provider networks. A possible use of these measures would be to have some or all incorporated into contractual provisions between hospitals and insurers commonly referred to as "pay for performance" or "P4P." To address questions that may arise regarding how measures should be used, the PHCQA has developed a set of principles regarding the use of PHCQA-endorsed quality measures for insurer-provider contractual purposes:

  1. PHCQA shall not be involved in any contractual negotiations and takes no position on whether P4P provisions should be included in insurer-provider agreements. Each insurer and provider is in a unique position with unique considerations.
  2. PHCQA did not specifically consider the suitability of each quality measure for P4P purposes in its endorsement determinations, and the publication of benchmarks or other comparators for a PHCQA-endorsed quality measure do not constitute an endorsement of such benchmarks or comparators for P4P purposes.
  3. If a provider and insurer mutually decide to pursue the negotiation of P4P provisions in their agreement, the following considerations may be relevant to their discussions and negotiations:
    • Which PHCQA-endorsed measures, if any, are relevant and appropriate to the specific provider and insurer?
    • If a measure not endorsed by PHCQA is proposed for use by an insurer or provider, the reasons why a measure did not meet the PHCQA criteria for endorsement should be considered. Such reasons may have included the inability to obtain credible data for the measure or the unavailability of a satisfactory risk adjustment methodology for the measure.
    • Consideration should be given to whether the appropriate measure for P4P purposes is absolute achievement, comparison with an appropriate national, regional or local peer group of providers, provider-specific quality improvement, or some combination thereof.
    • Consideration should be given to a trial period without financial consequences to test the validity of the selected measures for P4P purposes and to establish provider-specific baselines.
    • Consideration should be given to constructing P4P provisions which encourage the delivery of quality care and which are not punitive or retroactive in nature.