Aetna is pleased to formally announce its Pay for Performance Program (P4P), a project developed under the auspices of California’s Integrated Healthcare Association (IHA) and designed to reward those physician organizations which excel in meeting selected quality criteria.  Those criteria comprise specific clinical indicators, member satisfaction questions, and the self-reported ability to perform defined information technology activities. The specifics of Aetna’s program are as follows: 

1. Aetna is funding a pool of money that will be available for payout to physician organizations with superior performance on Pay for Performance activities occurring in 2003 as measured and reported in 2004.  Although the funds used to support this program derive ultimately from the premium dollar, the money used in Aetna’s P4P bonus pool is not being taken from funds designated for capitation payments, shared risk payments, or any other source currently earmarked for professional capitation to physician organizations.  Data will be derived from the vendor selected through the IHA process. Aetna is administering its program and will determine groups eligible for payouts and the amount of those payouts. Data will be administratively-derived only – no hybrid data is admissible or acceptable per IHA guidelines.
2. Methodology: Physician organizations participating in Pay for Performance will be ranked and any group in the fourth quartile will receive a bonus payment based upon the Aetna member months linked to that organization. The entire bonus pool will be paid out to medical groups and IPA’s in the top quartile. 
3. Program measurements: The indicators in Aetna’s program are strictly defined as those embedded in the IHA model of Pay for Performance:  clinical, member satisfaction and information technology. No additional indicators will be included.
4. Bonus potential: Aetna estimates that a physician organization scoring in the top quartile across all measures could receive up to 3.5% of its annual professional capitation from Aetna as a bonus check. Please note that each individual indicator, including each clinical measure, member satisfaction question and the two distinct information technology categories, will be ranked separately for bonus payout purposes and the aggregate dollar payment rolled up at the group level. This means any given physician organization may well receive some bonus payment from Aetna, even if that group did not rank above the 75^th percentile across all measures.
5. Timeline: We anticipate that payout will occur early in the third quarter of 2004 based on these 2003 activities as measured in 2004.
6. Contracting & Participation Criteria: Aetna has de-coupled its Pay for Performance program in this first year from the contracting process. That means any physician organization with an Aetna contract in full force and effect as of January 1, 2004, is eligible to receive a bonus payment for 2003 activities if it meets these other criteria:

·         Has a minimum of 12,000 member months with Aetna for calendar year 2003,

·         Participates in the Consumer Assessment Survey,

·         Has executed Aetna’s delegation agreements for Patient Management and Claims.

We firmly believe Aetna’s Pay for Performance meets the intent and the spirit of this program as initially envisioned. It will reward physician organizations that successfully strive to improve the quality of care provided to our members in California.  In turn, Aetna has the expectation that at least a portion of the P4P bonus will be used to improve the quality of care its members receive by investing these funds into systems support and other tools used to accomplish this aim.