MEDICARE 

PHYSICIAN 

PAYMENT

Private-Sector 

Initiatives Can Help 

Inform CMS Quality 

and Efficiency 

Incentive Efforts

Report to Congressional Committees

December 2012

GAO-13-160

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-160, a report to 

congressional committees

December 2012

MEDICARE PHYSICIAN PAYMENT

Private-Sector Initiatives Can Help Inform CMS 

Quality and Efficiency Incentive Efforts

Why GAO Did This Study

The Middle Class Tax Relief and Job 

Creation Act of 2012 required that 

GAO examine private-sector initiatives 

that base or adjust physician payment 

rates on quality and efficiency, and the 

initiatives’ applicability to the Medicare 

program. This report provides 

information on (1) common themes 

among private entities with payment 

incentive initiatives, and physician 

perspectives on those themes; and 

(2) the extent to which CMS’s financial 

incentive initiatives for Medicare 

physicians reflect such themes. GAO 

acquired information from nine private 

entities on 12 initiatives selected from 

expert referrals to include various 

sizes, types, and geographic locations. 

GAO also obtained information from 

physician groups, state medical 

societies, and national physician 

organizations. GAO additionally 

interviewed CMS officials and reviewed 

relevant CMS documents.

What GAO Recommends

CMS should consider whether certain 

private-sector practices could broaden 

and strengthen the Value Modifier 

program’s incentives. Specifically, the 

agency should consider rewarding 

physicians for performance 

improvement as well as for meeting 

absolute benchmarks, and making 

more timely payment adjustments to 

better reflect recent physician 

performance. Furthermore, the agency 

should develop a strategy to reliably 

measure the performance of solo or 

small physician practices. HHS 

concurred with all of GAO’s 

recommendations for CMS.

What GAO Found

GAO identified several common themes among private entities under review with 

initiatives that provide incentives for high-quality, efficient care, and selected 

physician organizations generally support these themes. Specifically:

• Private entities generally measure performance and make incentive 

payments at the physician-group level rather than at the individual-physician 

level. Physician organizations favor this approach.

• Private entities use nationally endorsed performance metrics and noted the 

need for a standardized set of metrics across all payers. Physician 

organizations concur that a standardized set of metrics would be less 

administratively complex.

• Most private entities in GAO’s study provide financial incentives tied to 

meeting absolute benchmarks—fixed performance targets—or a combination 

of absolute benchmarks and performance improvement. Physician 

organizations prefer incentives tied to absolute benchmarks over those 

based on how physicians perform relative to their peers. Physician 

organizations also favored incentives that reward improvement because 

baseline levels of performance vary.

• While private entities’ incentive payments vary in size and in method, private 

entities typically provide such payments within 7 months of the end of the 

performance measurement period. Physician organizations stated that 

financial incentives should be distributed soon after the measurement period 

to have the greatest effect on performance.

The efforts of the Centers for Medicare & Medicaid Services (CMS)—the agency 

within the Department of Health and Human Services (HHS) that administers the 

Medicare program—to transform the physician payment system in Medicare 

reflect, to varying degrees, the themes that GAO identified among selected 

private entities with physician payment incentives. Specifically, CMS is taking 

steps to do the following:

• Focus on group-level performance measurement and payment adjustments 

in the Value-based Payment Modifier (Value Modifier) program, designed to 

adjust Medicare payments to physicians using performance data on the 

quality and cost of care provided. However, CMS has yet to develop a 

method of reliably measuring the performance of physicians in small 

practices in the Value Modifier program.

• Apply Value Modifier payment adjustments to outlier physicians—rewarding 

high performers and penalizing poor performers—using absolute 

performance targets but not performance improvement. Under this 

benchmarking strategy, it is likely that only high performers will elect to 

participate in the program’s payment adjustment.

• Annually adjust payments through the Value Modifier 1 year after the 

performance measurement period ends, rather than applying the Value 

Modifier closer to the time of service delivery. This time lag between 

performance and payment adjustment may diminish the significance of the 

incentive to physicians. View GAO-13-160. For more information, 

contact James Cosgrove at (202) 512-7114 or 

cosgrovej@gao.gov.
Page i GAO-13-160 Medicare Physician Payment

Letter 1 

Background 7

Common Themes among Private Entities Pertain to Performance 

Measurement and Incentive Payment; Physician Organizations 

Largely Concur with These Themes 10

CMS’s Efforts to Tie Physician Payments to Quality and Efficiency 

Reflect, to Varying Degrees, Common Themes of Private Entities 

with Physician Payment Initiatives 25

Conclusion 32

Recommendations for Executive Action 33

Agency Comments and Our Evaluation 33

Appendix I Comments from the Department of Health and Human 

Services 35

Appendix II GAO Contact and Staff Acknowledgments 38

Tables

Table 1: Private Entities and Physician Payment Initiatives in Our 

Study 5

Table 2: CMS’s 2015 Value-Based Payment Modifier for Physician 

Groups That Choose the Quality-Tiering Approach 30

Contents 
Page ii GAO-13-160 Medicare Physician Payment

Abbreviations

ACO accountable care organization

AQC Alternative Quality Contract

BCBS MA Blue Cross Blue Shield of Massachusetts

BCBS MI Blue Cross Blue Shield of Michigan

CAC Collaborative Accountable Care

CA P4P California Pay-for-Performance

CMS Centers for Medicare & Medicaid Services

EHR electronic health record

HHS Department of Health and Human Services

IHA Integrated Healthcare Association

IPA Independent Practice Association

NCQA National Committee for Quality Assurance

NQF National Quality Forum

PCMH patient-centered medical home

PGIP Physician Group Incentive Program

PPACA Patient Protection and Affordable Care Act

PQRS Physician Quality Reporting System

SGR sustainable growth rate

TIN Tax Identification Number

Value Modifier Value-based Payment Modifier

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-13-160 Medicare Physician Payment

United States Government Accountability Office

Washington, DC 20548

December 26, 2012

The Honorable Max Baucus

Chairman

The Honorable Orrin G. Hatch

Ranking Member

Committee on Finance

United States Senate

The Honorable Fred Upton

Chairman

The Honorable Henry Waxman

Ranking Member

Committee on Energy and Commerce

House of Representatives

The Honorable Dave Camp

Chairman

The Honorable Sander Levin

Ranking Member

Committee on Ways and Means

House of Representatives

Medicare’s ability to control spending remains a serious long-term 

financial challenge.1

 

1

Medicare is a federal health insurance program for people age 65 and older, individuals 

under age 65 with certain disabilities, and individuals diagnosed with end-stage renal 

disease. About three out of four beneficiaries are enrolled in Medicare’s traditional fee-forservice program; the rest are enrolled in private health plans under the Medicare 

Advantage program.

Physicians play a central role in the growth of 

Medicare expenditures both through the services they provide and the 

services they order, including hospital admissions, diagnostic tests, and 

referrals to other physicians. Evidence suggests that higher utilization of 

these services does not necessarily result in better health outcomes. As 

concerns about Medicare solvency have grown, so has interest in 

transforming Medicare’s physician payment system to provide incentives 

for high-quality care delivered more efficiently.

 
 

Page 2 GAO-13-160 Medicare Physician Payment

Physicians in traditional Medicare are paid under a national fee 

schedule—with an associated payment rate for each service rendered—

in conjunction with a system of spending targets called the sustainable 

growth rate (SGR).2 The Medicare physician fee schedule is updated 

annually by the SGR system, with the intent of limiting the total growth in 

Medicare spending for physician services over time. Because of rapid 

growth in Medicare spending for physician services, the SGR has called 

for fee reductions since 2002. However, congressional action has 

temporarily averted such fee reductions for 2003 through 2012.3

Because physicians both directly and indirectly affect total health care 

spending, many private health care purchasers, such as insurers, have 

initiated programs to reward high-performing physicians and encourage 

patients to obtain care from these physicians, and these programs have 

evolved to reflect the increased sophistication of payers and providers.

Since the late 1990s, some purchasers have provided financial incentives 

to physicians for meeting certain performance measures for quality and 

efficiency, an initiative known as pay-for-performance. As these efforts 

have evolved, some private purchasers have sought to improve quality 

and efficiency using models of coordinated care delivery that may 

incorporate elements of an accountable care organization (ACO)

Payments under the physician fee schedule totaled about $67 billion in 

fiscal year 2011, accounting for about 12 percent of total Medicare 

spending.

4 or a 

patient-centered medical home (PCMH).5

 

2

The Balanced Budget Act of 1997 established the SGR formula system, replacing an 

earlier targeting system—the Medicare Volume Performance Standard—as a mechanism 

to determine updates to physician payments in fee-for-service Medicare. See Pub. L. 

No. 105-33, § 4503, 111 Stat. 251, 433 (codified at 42 U.S.C. § 1395w-4(f)). 

3

See 42 U.S.C.§ 1395w-4(d). 

4

An ACO refers to a group of service providers that will work together to coordinate care 

for the patients they serve. ACOs create incentives for health care providers to work 

together to treat an individual patient across care settings—including physicians’ offices, 

hospitals, and long-term care facilities. ACOs can potentially receive a portion of the net 

savings they achieve through reduced costs and improvements in quality of care.

5

In a PCMH, a designated physician, often in primary care, is responsible for providing for 

all the patient’s health care needs or taking responsibility for appropriately arranging and 

coordinating care with other qualified professionals. Other principles of a PCMH include 

performance measurement, patient shared decision making, and enhanced patient 

access.
 

Page 3 GAO-13-160 Medicare Physician Payment

In 2007, we reported on various ways that several health care purchasers 

profiled the performance of physicians in their networks to draw 

comparisons between efficient and inefficient providers, and linked their 

performance evaluation results to a range of financial incentives. We 

recommended that the Centers for Medicare & Medicaid Services 

(CMS)—the agency within the Department of Health and Human Services 

(HHS) that administers the Medicare program—start a physician profiling 

system with a focus on efficiency to help control Medicare spending.6 In 

2008, the Medicare Improvements for Patients and Providers Act required 

HHS to implement a Physician Feedback Program that includes 

distribution of confidential feedback reports to physicians on the 

resources used to provide care to Medicare beneficiaries, with the option 

of including quality measures.7 In 2011, we reported on CMS’s efforts and 

the challenges that the agency faced in developing the methodology and 

distributing physician feedback reports.8 In 2010, the Patient Protection 

and Affordable Care Act (PPACA) directed HHS to establish a Valuebased Payment Modifier (Value Modifier) program under which Medicare 

physician payments are to be adjusted for quality and efficiency of care.9

HHS is required to phase in the Value Modifier beginning in 2015 and 

plans to do so using performance data derived from the Physician 

Feedback Program; it is required to cover all physicians under the Value 

Modifier program by 2017.10 PPACA also established a number of 

coordinated care delivery models and gave CMS the authority to test 

others through its Innovation Center.11

 

6

GAO, Medicare: Focus on Physician Practice Patterns Can Lead to Greater Program 

Efficiency, GAO-07-307 (Washington, D.C.: Apr. 30, 2007).

7

Pub. L. No. 110-275, § 131(c), 122 Stat. 2494, 2526 (2008) (codified at 42 U.S.C. 

§ 1395w-4(n). 

8

GAO, Medicare Physician Feedback Program: CMS Faces Challenges with Methodology 

and Distribution of Physician Reports, GAO-11-720 (Washington, D.C.: Aug. 12, 2011).

9

Pub. L. No. 111-148, § 3007, 124 Stat. 119, 373 (2010) (codified at 42 U.S.C. § 1395w4(p)). 

10On or after January 1, 2017, HHS may apply the Value Modifier to additional eligible 

professionals, such as physical therapists and qualified speech-language pathologists.

11The CMS Innovation Center tests and evaluates payment and service delivery models 

for beneficiaries of CMS healthcare programs, with the goal of spreading successful 

solutions across the country.
 

Page 4 GAO-13-160 Medicare Physician Payment

The Middle Class Tax Relief and Job Creation Act of 2012 required that 

GAO examine private-sector initiatives that base or adjust physician 

payment rates on quality and efficiency and assess their applicability to 

the Medicare program.12

To identify common themes among private entities with payment 

incentives for high-quality, efficient physician care, we obtained 

information from nine private entities that conduct 12 prominent initiatives. 

(See table 1.) To identify such entities, we interviewed academic and 

industry experts on physician performance measurement and payment 

reform. We also reviewed health care policy research literature and a 

transcript from CMS’s National Provider Call organized to provide input 

on best practices from pay-for-performance in the private sector. The 

private entities identified from these sources vary by geography, size, and 

type, and have initiatives that include pay-for-performance, PCMH, and 

ACO models. The initiatives referenced in this report are sponsored by 

two national health plans, three Blue Cross Blue Shield plans, one 

multistate plan, two substate plans, and one multistakeholder association, 

comprised of health plans, physician groups, and hospital systems, 

among others. The themes that we discuss in this report reflect the 

initiatives of the nine entities we studied and may not be generalizable to 

all private entities that provide financial incentives to physicians for quality 

and efficiency. Also, we did not conduct independent analyses of the 

effectiveness of the incentive initiatives.

To meet this requirement, this report provides 

information on (1) common themes among private entities with initiatives 

that offer payment incentives for high-quality, efficient physician care, as 

well as physician perspectives on those themes; and (2) the extent to 

which CMS’s financial incentive initiatives for Medicare physicians reflect 

such themes.

 

12See Pub. L. No. 112-96, § 3003(b)(2), 126 Stat. 156, 187 (2012).
 

Page 5 GAO-13-160 Medicare Physician Payment

Table 1: Private Entities and Physician Payment Initiatives in Our Study 

Private entities Incentive initiatives Locations

CareFirst BlueCross 

BlueShield

Patient-Centered Medical Home (PCMH) District of Columbia, Maryland, and 

Virginia

: The health plan rewards 

primary care physicians for participating in provider panels; controlling 

overall cost and quality of care; and maintaining care plans for highcost, high-risk patients. 

Blue Cross Blue Shield 

of Massachusetts

Alternative Quality Contract (AQC): The health plan negotiates 5-year Massachusetts

contracts with physician organizations that are based on a global 

budget covering all care for the patient population. Physician 

organizations share risk in that they are accountable for a share of 

any budget overspending but receive a share of any budget 

underspending. The plan makes incentive payments to physician 

organizations demonstrating high performance on quality and 

outcome metrics. 

Blue Cross Blue Shield 

of Michigan

Physician Group Incentive Program (PGIP): The health plan rewards Michigan

physician organizations and their participating physician practices for 

their performance on quality, efficiency, and practice transformation.

Physician organizations can choose to participate in a variety of 

incentive options, ranging from process and information-system 

transformation initiatives to condition-focused initiatives. 

Cigna Collaborative Accountable Care (CAC) Arizona, California, Colorado, 

Connecticut, Georgia, Maine, 

Missouri, Nevada, New Hampshire, 

New Jersey, New York, North 

Carolina, Ohio, Oregon, Tennessee, 

Texas, Vermont, and Virginia

: The health plan rewards 

physician groups for performance on quality, affordability, and patient 

experience. The plan adjusts payments up or down on the basis of 

the group’s total medical cost trend. 

Dean Clinic and Dean 

Health Plan

Pay-for-Performance Incentive Program (Dean Clinic): The Wisconsin

organization ties a certain amount of payment to performance; 

physicians can choose from a variety of incentive options within five 

performance areas, such as patient satisfaction.

Primary Care Redesign (Dean Clinic): The organization ties a certain 

portion of payment to primary care practices to performance on 

quality and efficiency metrics, offering the potential to earn money 

beyond normal market pay.

Practitioner Incentive Model (Dean Health Plan): The health plan 

rewards network primary care groups with bonuses on the basis of 

performance on quality, member satisfaction, and efficiency metrics.

HealthPartners Partners in Excellence Iowa, Minnesota, North Dakota, 

South Dakota, and Wisconsin

: The health plan rewards physician groups 

with performance bonuses on the basis of quality, affordability, and 

patient experience.

Partners in Progress: The health plan ties a portion of physician 

groups’ pay to quality, patient experience, and efficiency 

performance, the details of which are negotiated with the physician 

groups.

Integrated Healthcare 

Association 

California Pay-for-Performance (CA P4P): This statewide, California

multistakeholder organization facilitates performance-based physician 

payment through the use of a common set of quality and efficiency 

metrics. Quality performance results are publicly reported. 
 

Page 6 GAO-13-160 Medicare Physician Payment

Source: GAO.

To obtain physicians’ perspectives on the common themes that we 

identified, we interviewed physician groups associated with particular 

initiatives and other organizations representing physicians with 

knowledge of the initiatives.13 The physician groups varied in size—with 

as many as 1,600 physicians—and structure. We spoke with physician 

leaders of two independent practice associations, a large primary care 

group practice, medical staff at a hospital, and an alliance of medical 

groups. We also spoke with representatives of three state medical 

societies and a state professional association representing physician 

organizations. Additionally, we reviewed comment letters submitted by 

national physician organizations, including the American College of 

Cardiology and the American Medical Association, in response to CMS’s 

proposed rule regarding Medicare incentive payments for quality and 

efficiency.14

To examine the extent to which CMS’s financial incentive initiatives for 

Medicare physicians reflect the common themes among private entities 

that we identified, we reviewed the agency’s 2013 revisions to payment 

policies under the Medicare physician fee schedule final rule, which 

addressed implementation of the physician Value Modifier and finalized 

The perspectives that we discuss in this report reflect those 

physicians groups or organizations whose comments we sought or 

reviewed and may not be generalizable to all physicians.

 

13We use the term “physician groups” to describe organizations where physicians have a 

shared stake in performance measurement and incentive payment. In this report, 

physician groups can include formally established medical groups, hospital divisions, 

virtual or informal physician groups, or independent practice associations.

14Proposed Rule, Revisions to Payment Policies Under the Physician Fee Schedule, DME 

Face to Face Encounters, Elimination of the Requirement for Termination of Non-Random 

Prepayment Complex Medical Review and Other Revisions to Part B for CY 2013, 77 Fed. 

Reg. 44,722 (July 30, 2012).

Rocky Mountain Health 

Plans

Incentive Program: The health plan negotiates incentive contracts Colorado

with physicians that tie a certain portion of payment to their 

performance on quality metrics and efficiency.

UnitedHealth Group Performance-based contracting: The plan negotiates contracts with Nationwide

physicians or medical groups, or both, to determine the amount that 

the physicians’ fees would be increased for superior quality and 

efficiency performance, as well as the specific quality and efficiency 

metrics used.
 

Page 7 GAO-13-160 Medicare Physician Payment

CMS’s overall approach.15

We conducted this performance audit from April to December 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

We also conducted interviews with agency 

officials and examined relevant CMS documents.

Because Medicare pays for a large share of health care throughout the 

country, its size and market power can help it to lead payment reforms in 

the rest of the health care system. Its use of financial incentives for 

reaching performance targets can, in effect, set standards that private 

payers may adopt. However, statutory requirements for the Medicare 

program limit the types of changes that CMS can implement. For 

example, Medicare must pay for health care delivered by any eligible 

physician willing to accept Medicare payment and follow Medicare 

requirements, and must pay uniform Medicare rates to all physicians.

Therefore, unlike private health care purchasers, CMS cannot exclude 

poor-performing providers from participating in the program and cannot 

negotiate different reimbursement rates with different providers.

In recent years, in response to legislation, HHS has taken steps to 

transition Medicare physicians from a fee-for-service system in which only 

the volume of services is rewarded, to one in which value—as measured 

by the quality and the efficiency with which that care is delivered—also 

determines payment. CMS has worked with physician groups in designing 

and implementing the following physician initiatives, among others.

• Physician Quality Reporting System (PQRS). PQRS collects 

physician-reported data on quality measures for covered services 

furnished to beneficiaries. CMS provides an incentive payment to 

physicians who satisfactorily report quality data. The agency 

 

15Final Rule with Comment Period, Revisions to Payment Policies Under the Physician 

Fee Schedule, DME Face-to-Face Encounters, Elimination of the Requirement for 

Termination of Non-Random Prepayment Complex Medical Review and Other Revisions 

to Part B for CY 2013, 77 Fed. Reg. 68,892 (Nov. 16, 2012).

Background 
 

Page 8 GAO-13-160 Medicare Physician Payment

announced that, in 2013, physicians who do not satisfactorily meet 

PQRS submission requirements will have their fee schedule amount 

reduced by 1.5 percent for services furnished in 2015.16

• Value Modifier Program. PPACA directed HHS to establish a Value 

Modifier to adjust Medicare payments to some physicians in 2015 and 

to all physicians in 2017 on the basis of the quality and cost of care 

provided.17 To develop the Value Modifier, CMS plans to use 

performance information on quality and cost metrics derived from 

Medicare claims and data submitted under PQRS.18 Because the 

Value Modifier program must be budget neutral, upward adjustments 

will depend on the total sum of negative adjustments in a given year.

• Shared Savings Program. CMS has finalized rules under which 

physicians, hospitals, and other health care providers may work 

together to better coordinate care for Medicare beneficiaries through 

an ACO.19 While individual physicians continue to be paid under the 

Medicare fee schedule, the agency plans to develop a benchmark for 

each ACO against which its performance is measured to assess 

whether it qualifies to receive shared savings or in some cases be 

held accountable for losses.20

 

16See 42 U.S.C. § 1395w-4(m). 

17See 42 U.S.C. § 1395w-4(p). In addition, to ensure that the Value Modifier encourages 

physicians to care for beneficiaries with complicated cases, there will be an additional 

upward payment adjustment for groups of physicians furnishing services to high-risk 

beneficiaries.

18Performance results will be distributed to physicians by means of CMS’s Physician 

Feedback Program. PPACA requires HHS to coordinate the Value Modifier with the 

Physician Feedback Program. CMS plans to distribute at least one feedback report to 

physicians before paying them differentially on the basis of their performance. In addition 

to this feedback report, in 2012 CMS began distributing simplified interim feedback reports 

that are processed about 1 month after the reporting period.

19See Pub. L. No. 111-148, §§ 3022, 10307, 124 Stat. 119, 395, 940 (2010) (codified at 

42 U.S.C. § 1395jjj); 76 Fed. Reg. 67,802 (Nov. 2, 2011).

20In order to participate, ACOs in the Shared Savings Program must meet all eligibility and 

program requirements, including serving at least 5,000 Medicare fee-for-service 

beneficiaries and participating for at least 3 years. CMS implemented both a one-sided 

shared savings model that poses no risk to ACOs for losses and a two-sided model that 

requires ACOs to share both savings and losses, allowing the ACO to choose for its first 

agreement period.
 

Page 9 GAO-13-160 Medicare Physician Payment

• Comprehensive Primary Care Initiative and Multi-Payer Advanced 

Primary Care Practice. Eligible primary care practices may receive 

shared savings rewards under some of CMS’s demonstrations related 

to operating a PCMH. Under the Comprehensive Primary Care 

Initiative, CMS intends to pay 500 primary care practices in seven 

markets for improved and comprehensive care management, and 

after 2 years offer them the chance to share in any savings they 

generate. For the Multi-Payer Advanced Primary Care Practice 

demonstration, CMS intends to award payment incentives through 

existing PCMH initiatives that are currently being conducted by states 

to make medical home practices more broadly available.21

• Physician Compare Website. This Internet tool serves as a directory 

for beneficiaries, allowing them to search for a physician by specialty, 

location, hospital affiliation, and other factors. The profile pages also 

indicate if a physician satisfactorily participated in the PQRS. PPACA 

requires that CMS make quality and patient experience measures 

publicly available on the website by January 1, 2013.22 Publishing 

comparable performance results can encourage physicians to 

improve their performance in order to attract more beneficiaries.

These legislated changes, along with market forces, have potential 

implications for the way many physicians practice. For example, emerging 

delivery models such as ACOs may lead physicians to join larger groups, 

more closely align with hospitals, and take on financial risk for managing 

patient care. Although many physicians who serve Medicare beneficiaries 

work in small practices, more are increasingly employed by hospitals and 

health care systems. As of 2008, nearly one-third of U.S. physicians 

worked in solo or 2-physician practices, 15 percent worked in groups of 3 

to 5 physicians, 19 percent worked in practices of 6 to 50 physicians, and 

13 percent practiced in hospital settings.23

 

21Each state will determine the additional amount it pays participating practices for 

transforming into medical homes and for providing services that are not otherwise covered 

under the traditional Medicare fee-for-service program. The form of the payment may 

include a monthly fee for each participating beneficiary attributed to a participating 

practice, pay-for-performance incentives, shared savings, or some combination of the 

above.

However, a 2011 study found 

22See Pub. L. No. 111-148, § 10331, 124 Stat. 119, 966 (2010).

23Center for Studying Health System Change, A Snapshot of U.S. Physicians: Key 

Findings from the 2008 Health Tracking Physician Survey (September 2009), accessed 

October 3, 2012, http://www.hschange.com/CONTENT/1078/. 
 

Page 10 GAO-13-160 Medicare Physician Payment

that physicians are increasingly selling their practices or seeking 

employment directly with healthcare systems, and hospitals are 

aggressively acquiring physician practices to remain competitive.24

We identified several common themes among private entities with 

physician payment initiatives in our study. These included the importance 

of focusing on physician groups rather than individual physicians, the 

desire for a standardized performance measurement set, the use of 

absolute performance and improvement targets, the timely distribution of 

incentive payments, an emphasis on care coordination to improve quality 

and efficiency, and the use of other strategies to improve quality and 

efficiency. For the most part, physician organizations familiar with these 

themes expressed their support.

Private entities in our study generally based incentive payments on the 

performance of physician groups rather than individual physicians largely 

because of methodological issues and the importance of reinforcing 

group-wide accountability. Most of the private entities we spoke with 

pointed out that individual-level measurement often does not generate 

sufficient performance data to produce credible results. For instance, for a 

condition-specific performance metric, a physician may see too few 

 

24Accenture, Clinical Transformation: Dramatic Changes as Physician Employment Grows

(March 2011), accessed September 28, 2012, http://www.accenture.com/usen/Pages/insight-clinical-transformation-physician-employment-grows.aspx. 

Common Themes 

among Private 

Entities Pertain to 

Performance 

Measurement and 

Incentive Payment; 

Physician 

Organizations Largely 

Concur with These 

Themes 

Stakeholders Largely 

Agreed That Performance 

Measurement and 

Incentive Payment Should 

Be at the Physician-Group 

Level

Private Entities 
 

Page 11 GAO-13-160 Medicare Physician Payment

patients with the relevant condition to be measured reliably.25 Integrated 

Healthcare Association (IHA) noted that using physician organizations as 

the unit of analysis in the California Pay-for-Performance (CA P4P) 

program helps to overcome small sample sizes that impede valid 

measurement of efficiency at the individual physician level, although 

sometimes even sample sizes at the physician organization level may not 

be adequate.26 A representative at Blue Cross Blue Shield of Michigan 

(BCBS MI) stated that this methodological issue is especially relevant 

when measuring performance in specialty care practices.27

Because many primary care physicians work in small, independent 

practices, CareFirst BlueCross BlueShield (CareFirst) PCMH program 

has developed a strategy for including them in its initiative. CareFirst 

physicians do not need to be a part of a formal medical group to 

participate in the program. Rather, they may organize voluntary, “virtual” 

panels for the purpose of performance measurement and incentive 

payments. Established physician groups may also participate, provided 

that they form subgroups of between 5 and 15 physicians—the panel size 

requirement for participation. As an incentive to join the program, 

CareFirst increases the fees paid under its physician fee schedule by 

12 percentage points. It offers additional financial incentives to physician 

Because 

subspecialists may provide distinct services within their specialties, they 

can look like outliers when compared with their specialty peers at the 

individual level. Several private entities told us that group-level 

measurement also promotes group-wide accountability. For example, 

representatives at Dean Clinic said that measuring performance at the 

group level allows each of its clinical divisions to leverage each 

physician’s strengths, and keeps them engaged in performance 

improvement. In addition, BCBS MI believes that group-level 

measurement and payment may prevent physicians with particularly 

complex patients from being resistant to participating in the initiative.

 

25Research has shown that reliable quality metrics can require a patient pool of up to 411. 

See: J. Cromwell et al., Pay for Performance in Health Care: Methods and Approaches, 

RTI Press publication no. BK-0002-1103 (Research Triangle Park, N.C.: RTI Press, 2011), 

retrieved March 14, 2012 from http://www.rti.org/rtipress. 

26J. C. Robinson, T. Williams, and D. Yanagihara, “Measurement of and Reward for 

Efficiency in California’s Pay-For-Performance Program,” Health Affairs, vol. 28, no.5 

(2009): 1438-1447.

27We define specialty care as health services in a specific field of medicine, such as 

cardiology, dermatology, and psychiatry.
 

Page 12 GAO-13-160 Medicare Physician Payment

panels for bringing care costs within a budget target and for improving 

quality on a variety of metrics. CareFirst representatives believe that the 

primary care physician is in the best position to comprehensively 

understand a patient’s needs—in particular, the needs of chronically ill 

patients—but that no one physician has a large enough patient pool for 

reliable performance measurement. They said that not only does panel 

formation allow for reliable performance measurement, but it also 

provides a structure for peer pressure given that all physicians in a panel 

have an economic stake in high performance.

Many of the private entities we spoke with were also consistent in their 

view that it is the responsibility of physician group management to drive 

individual physician performance improvement. Therefore, they not only 

provide physician groups with feedback reports at the group level, but 

most also provide supporting data at the individual physician level that 

can be used to generate individualized physician feedback reports. For 

example, under the Alternative Quality Contract (AQC), Blue Cross Blue 

Shield of Massachusetts (BCBS MA) sends performance data and reports 

in electronic format to each physician group’s central leadership, who are 

responsible for sharing the results with individual physicians.28

Furthermore, many private entities we spoke with said that physician 

groups have complete discretion over how their incentive payments are 

used and therefore may not distribute their entire incentive payments to 

frontline physicians. For example, BCBS MI reported that, in general, 

Similarly, 

under the Physician Group Incentive Program (PGIP), BCBS MI expects 

physician organizations to create appropriate reports at the practice unit 

and individual physician level to identify areas for improvement, as well as

to track performance over time and guide focused system-transformation 

and performance improvement interventions. Some entities noted that 

peer pressure and competition within an organization can provide an 

incentive for physicians to improve their relative performance. For 

example, Rocky Mountain Health Plans shares relative performance data 

on resource use with certain physicians to facilitate communication about 

clinical quality and cost. Also, Dean Clinic representatives mentioned that 

reporting performance at the individual level within each specialty division 

instills peer pressure, which can help facilitate the improvement process.

 

28BCBS MA also meets regularly with the leadership of each AQC group to discuss the 

data and reports, and consults on priority improvements and best practices for achieving 

performance goals.
 

Page 13 GAO-13-160 Medicare Physician Payment

physician groups distribute roughly one quarter of PGIP incentive 

payments directly to front-line physicians, and invest the remainder in 

systems improvements that benefit the practices and the physician group.

Several other private entities also stated that physician group managers 

use their incentive payments for shared practice improvements, such as 

investing in new or additional information-technology capabilities, hiring 

case managers, and rewarding nonphysician staff. A BCBS MA 

representative noted that physician groups undertake these types of 

shared practice investments to help make the improvements in care 

quality and efficiency called for in the AQC.

Physician organizations in our review agreed that measurement at the 

physician group level for incentive pay is statistically more accurate than 

measurement at the individual physician level. They noted that one 

physician is unlikely to have a patient population large enough for 

statistical reliability, making it difficult for private entities to validate 

individual physician-level data. They also said that attributing patients to 

one physician for measurement purposes is difficult because physicians 

often work as a team to provide care. On the other hand, they noted that 

physician groups are likely to have the patient sample sizes needed to 

ensure accurate calculations and minimize the attribution problem.

According to a letter to CMS from the American College of Cardiology, 

the physician group level provides sufficient data to ensure statistical 

significance but is still a level at which individual physician actions can 

improve quality.

Physician organizations in our study also agreed that it is their 

responsibility to drive individual physician performance improvement.

They noted that when private entities provide information on individual 

physician performance, managers can develop tailored physician 

feedback reports using their own analytical tools. For example, physician 

groups can use the performance reports they receive internally to 

aggregate data across their entire patient population. They told us that 

these reports can be helpful because physicians are inclined to trust the 

data provided by their groups’ managers, react to internal peer pressure, 

and want to examine their entire patient population.

In addition, physician organizations we contacted cited different 

approaches for distributing financial incentives. For example, Mesa 

County Physicians Independent Practice Association (IPA), Inc., receives 

incentive payments on a quarterly basis from Rocky Mountain Health 

Plans. It then pays its physician practices, each of which may decide to 

distribute the incentive payments in a different manner. Some physician 

Physicians 
 

Page 14 GAO-13-160 Medicare Physician Payment

practices in the IPA distribute the money equally to individual physicians; 

others distribute the money to individual physicians on the basis of their 

relative performance scores; and still others retain the money for capital 

improvement projects. A different approach is that used by ProHealth 

Physicians, Inc. (ProHealth), a 200-member physician group in Cigna’s 

Collaborative Accountable Care (CAC) initiative. ProHealth reported 

setting aside a portion of the incentive payments to cover personnel and 

overhead costs associated with administering the initiative. About half of 

the remainder is distributed to individual physicians on the basis of their 

performance, with the highest performers receiving the most money and 

the lowest performers receiving no money. The rest of the incentive 

payment is considered profit and may be paid to its physician 

shareholders.

In choosing performance metrics for their initiatives, the private entities 

we interviewed largely draw from those nationally endorsed by such 

groups as the National Quality Forum (NQF), which has endorsed over 

700 metrics.29

 

29NQF is a nonprofit organization with the lead responsibility for endorsing health care 

quality measures. HHS has contracted with NQF to perform various activities, including 

endorsement of quality and efficiency metrics for use in reporting on physician care. It also 

requested that NQF complete a report that prioritizes the 20 conditions identified by CMS 

that account for over 95 percent of Medicare’s costs. See GAO, Health Care Quality 

Measurement: The National Quality Forum Has Begun a 4-Year Contract with HHS, 

Many of the entities cited difficulties in developing sound 

quality metrics for their initiatives as the reason for selecting nationally 

endorsed metrics. However, some entities in our study supplement 

nationally endorsed quality-of-care metrics with others. For example, a 

representative of BCBS MA told us that, in collaboration with physicians, 

experimental measures can be used to provide evidence on the sample 

GAO-10-737 (Washington, D.C.: July 14, 2010); and Health Care Quality Measurement:

HHS Should Address Contractor Performance and Plan for Needed Measures, 

GAO-12-136 (Washington, D.C.: Jan. 13, 2012).

Private Entities Select 

from among Nationally 

Endorsed Metrics; 

Stakeholders Noted the 

Need for a Standard Set of 

Metrics across Payers

Private Entities 
 

Page 15 GAO-13-160 Medicare Physician Payment

size needed to generate reliable data for certain measures. Physician 

organizations participating in BCBS MA’s AQC have the opportunity to 

work on the development of up to three experimental measures of their 

choosing each year on the basis of a list provided by the health plan. The 

rest of the AQC metrics are largely NQF-endorsed and are supported by 

entities such as CMS or the National Committee for Quality Assurance 

(NCQA).

30 To measure efficiency of care, many entities reported using a 

risk-adjusted total cost of care metric that captures all services provided 

to physicians’ entire patient population.31

While NQF fosters agreement on national standards for measuring health 

care performance, no national consensus exists on a single best set of 

quality metrics. Most private entities that we spoke with were in 

agreement that use of a standardized set of performance metrics across 

payers would be ideal. Standardization may include uniformity in the 

metric selected, the benchmark against which performance is assessed, 

and the relevant patient population.

HealthPartners, for one, uses its 

own NQF-endorsed total cost of care and resource use metrics calculated 

on a per-member basis to help identify potential overuse and underuse of 

services. Some private entities measure efficiency through metrics that 

are more specific than total cost of care. For example, Dean Health Plan’s 

Practitioner Incentive Model has efficiency metrics that include generic 

drug prescription patterns and emergency room visits per 1,000 

members, a metric also used by CMS for Medicare beneficiaries.

32

 

30NCQA is a national nonprofit organization that develops health care quality and 

performance standards, and manages accreditation, certification, and recognition 

programs for health plans, medical groups, and individual physicians. CMS and more than 

90 percent of U.S. health plans use NCQA’s Healthcare Effectiveness Data and 

Information Set to measure performance on various dimensions of care.

As expressed by HealthPartners 

representatives, a standardized set of metrics would send strong and 

consistent messages to providers, and make it easier for physician 

groups to focus on defined areas for quality improvement. California’s IHA 

accomplished this by arranging for its health plans and physicians to work 

31Risk adjustment of certain performance metrics is done to account for health status and 

other patient characteristics, with the goal of preventing adverse selection.

32Researchers have noted that physician payment incentives based on measured 

performance may cause physicians to focus their attention on the services or outcomes 

measured, potentially taking attention away from other services or outcomes. A 

standardized metric set that is sufficiently broad could help ameliorate this concern. See 

Lawrence P. Casalino et al., “Will Pay-For-Performance And Quality Reporting Affect 

Health Care Disparities?,” Health Affairs, vol. 26, no. 3 (2007).
 

Page 16 GAO-13-160 Medicare Physician Payment

together to develop a uniform but dynamic set of performance metrics for 

statewide use. IHA reported that, until then, California physicians found it 

challenging to focus on performance improvement when many health 

plans provided incentives based on different metric sets. As of 2011, the 

CA P4P metric set included 85 metrics related to clinical quality, patient 

experience, meaningful use of health information technology, and 

appropriate resource use.

Several of the private entities in our study commented on the dearth of 

reliable specialty care metrics. For example, a representative from 

UnitedHealth Group noted inconsistency in the number of quality metrics 

across specialties. Nevertheless, most private entities that we spoke with 

included specialists in their incentive initiatives despite their limited 

performance data. Dean Clinic representatives discussed how they 

created a list of specialty care metrics for their pay-for-performance 

program in collaboration with their physicians. Over the course of 1 year, 

they offered each care division the opportunity to develop relevant, 

specialty-specific metrics, a process described as resource-intensive. To 

be formally adopted, these metrics required consensus among physicians 

that the new metrics applied to the majority of specialists within that 

department, and they had to be measureable through billing or electronic 

health record data. For example, physicians in the cardiovascular surgery 

division are measured on the percent of cardiovascular surgeries 

performed without a blood transfusion. Dean representatives surmised 

that, if a similar process were undertaken at the national level—whereby 

CMS would ask each specialty society to agree on 5 to 10 clinically 

relevant measures—it could be a step towards developing a robust, 

standardized set of metrics for specialty care.33

Physician organizations in our review indicated that they generally prefer 

quality metrics that have been endorsed by national groups, but are open 

to the inclusion of experimental metrics. They stated that standardization 

across payers would reduce the administrative burden associated with 

tracking distinct requirements of multiple metric sets among various

initiatives. For example, a physician leader at ProHealth reported that, 

among the 21 value-based payment initiatives in which ProHealth 

participates, private insurers vary not only by which metrics are selected 

 

33Quality metrics go through various stages, including development, endorsement, 

selection, and use, among others.

Physicians 
 

Page 17 GAO-13-160 Medicare Physician Payment

but by how the metrics are used. Representatives of the Massachusetts 

Medical Society added that, as a result, physicians may become 

overwhelmed and may not spend time to distinguish differences between 

the components of each initiative. Physician organizations also noted that 

some experimental metrics used in private-entity initiatives can be useful 

for filling in clinical areas that lack strong nationally endorsed metrics, 

although others may lack a significant medical rationale or be difficult to 

measure.

Furthermore, physician organizations in our study noted the importance of 

using specialty-specific metrics to ensure that performance is accurately 

attributed to specialty care providers for the care they furnish. To develop 

relevant metrics for specialty care providers, the Mesa County Physicians 

IPA organizes a team of local physicians each year to create more 

metrics for specialty care on the basis of new clinical evidence, similar to 

a process done for primary care metrics. However, according to a letter to 

CMS from the American Medical Association, value-based payment 

initiatives do not currently include all medical specialties because the 

tools for distinguishing value across specialties are inadequate. National 

medical societies have taken action to meet the need for more specialty 

metrics. For example, according to letters to CMS from national physician 

organizations, the Community Oncology Alliance has identified 16 key 

metrics of quality and value in cancer care delivery, and the American 

Association of Orthopaedic Surgeons has identified metrics for total knee 

replacements.

Most private entities in our study base financial incentives on absolute 

performance targets or a combination of absolute targets and on 

improvement over time. Absolute targets are fixed and known to their 

physician groups during the performance measurement period, offering 

greater certainty regarding the efforts required to become eligible for 

payment. As such, they serve as a guide for high performers to maintain 

their quality and efficiency standings. Some entities reward physicians on 

a set of graduated absolute targets, whereby higher performance within 

Private Entities Largely 

Reward Physicians for 

Meeting Absolute Targets 

and Improving 

Performance, an Approach 

That Physicians Favor

Private Entities 
 

Page 18 GAO-13-160 Medicare Physician Payment

the set of targets receives a greater reward. For example, under the AQC, 

physician groups are rewarded on the basis of performance targets (or 

“gates”) between 1 and 5. On a measure of colorectal cancer screening 

for members aged 51 to 75 years, AQC physician groups achieving a 

screening rate of roughly 65 percent met the minimum (“gate 1”) level of 

good performance on that measure, while those who screened about 

83 percent met the maximum (“gate 5”) level of performance on that 

measure. Aggregating “gate” scores across the roughly 5 dozen 

measures in the AQC contract determines the overall performance and 

quality incentive payment. The effectiveness of the absolute 

benchmarking approach in motivating providers depends on where the 

performance targets are set. If the target is set too high and perceived to 

be too difficult to reach, physicians may not respond to the incentive. If it 

is set too low, the entity will be making incentive payments for 

performance already being delivered and will not encourage 

improvement.

Several private entities in our study combine absolute performance 

targets and improvement over time in their benchmarking strategies.

Benchmarking based on performance improvement provides an incentive 

for lower performers as well as higher performers, as it rewards the gains 

achieved since past performance. Under the CA P4P program, 

performance on each metric is typically assessed against absolute 

targets—set at the 75th and 95th percentiles for the program in the 

previous year—and on improvement—closing the gap between the 

group’s previous year performance score and the 95th percentile of the 

previous year’s target. IHA representatives told us that, as of 2012, six of 

the seven health plans in the CA P4P program have adopted this 

benchmarking methodology.

Some of the entities we spoke with reward high relative performance 

along with improvement. Using a relative benchmark approach, 

physicians do not know their numerical target at the start of the 

performance period because their benchmark is based on the future 

performance of their peers. None of the entities we spoke with based 

incentive payments exclusively on relative performance. For instance, 

physician groups in Cigna’s CAC initiative must perform at a rate equal to 

or above the market average for each quality metric, or they must show 

improvement in their rate.
 

Page 19 GAO-13-160 Medicare Physician Payment

Physician organizations in our review preferred tying incentives to 

absolute performance or improvement rather than relative performance.

Some organizations saw merit in rewarding physician groups for 

achieving high performance rates; others favored incentives based, at 

least in part, on improvement because not all physician groups are at the 

same starting point. Selected organizations cautioned against using 

relative benchmarks, asserting that without prior knowledge of the level of 

performance needed to earn incentive pay, physician groups might not be 

willing to participate in an incentive initiative. Regardless of which 

benchmarking approach is used, frontline physicians might not know all 

the details of the incentive initiatives they work under. According to 

representatives of the Massachusetts Medical Society, frontline 

physicians likely know the performance targets that the physician group’s 

management sets but may not be aware of key details of payers’ 

incentive structures, such as the thresholds for achieving a higher 

incentive payment under BCBS MA’s AQC initiative.

The incentive payments under the initiatives we reviewed varied in their 

size and method, but were similar in their timing. The size of payment 

incentives reported to us ranged from around 2 percent to over 20 

percent of annual pay, with most initiatives offering at least 5 percent of 

annual pay in incentives. Several private initiatives in our study provide an 

incentive of at least 10 percent of annual physician revenue. We found 

three general methods used to make incentive payments:

• Some initiatives’ incentives allow physicians to earn a percentage 

add-on to a fee schedule. Physicians can only benefit from meeting 

quality and cost targets under this type of incentive; if they fail to meet 

those targets, physicians would still receive the full fee-for-service 

payment. Generally, in such cases, the payer is at risk for high costs, 

not the physicians. For example, on the basis of primary care 

physicians’ overall cost and quality performance, CareFirst’s PCMH 

program offers a potential increase of 20 to 60 percent in its fee 

schedule.

Physicians 

While Private Entities 

Offered Varied Payment 

Sizes and Methods, 

Physicians Say Timeliness 

Can Enhance the Incentive

Private Entities
 

Page 20 GAO-13-160 Medicare Physician Payment

• Other initiatives implement the incentive through a bonus, such as a 

per-member-per-month bonus payment, which also does not carry 

significant physician risk. Cigna’s CAC provides high- and improvedquality performers with a periodic per-patient payment, adjusted by 

the physician group’s effect on the trend of total medical cost. BCBS 

MI’s PGIP has an incentive pool that provides for a bonus payment 

depending on performance on specific subinitiatives in which 

participating physician organizations choose to participate.34

• Still other initiatives implement the incentive payment through a 

withhold—whereby a portion of the payment due to a physician is 

withheld until the status of their performance is determined at the end 

of the measurement period. The amount withheld is returned only to 

physicians who meet performance targets, putting some cost risk on 

the physicians. HealthPartners representatives told us that their 

Partners in Progress program applies a withhold from market-based 

payment that can range from 1 to 5 percent of revenue. Under Rocky 

Mountain Health Plans’ incentive program, physician groups negotiate 

with the health plan to determine the amount withheld.

In addition to providing bonuses to physician organizations, BCBS MA’s 

AQC provides incentives to physician organizations through global 

budgets.35

 

34In addition to the incentive bonuses, BCBS MI increases office visit fees paid to primary 

care and specialty practices that implement PCMH capabilities and are high performers 

under PGIP. Fees to practices not transforming systems of care and improving 

performance have been kept constant since 2009, according to BCBS MI.

Under a 5-year contract, each participating physician 

organization begins with a fixed budget that covers costs for all patient 

care on the basis of the population it serves; annual adjustments are 

made to manage the risk faced by the physician organization, such as 

adjustments to account for any changes in patient population health 

status. Physician organizations share any money with BCBS MA that is 

saved by spending less than the budgeted amount for the patient 

population, but they also share the risk when more money is spent than is 

budgeted. BCBS MA also rewards physician organizations with a permember per-month bonus for high performance as compared with fixed 

targets on a set of quality metrics.

35Physician organizations must care for at least 5,000 BCBS MA members in health 

maintenance organization or point of service plans.
 

Page 21 GAO-13-160 Medicare Physician Payment

The private entities in our study generally distributed incentive payments 

to physician group managers during the year immediately following the 

performance period.36

According to the physician organizations in our review, the 

responsiveness of physicians to payer initiatives is often tied to the size, 

method and frequency of the incentive payment. Regarding the 

appropriate size of the incentives, physician organizations noted that the 

larger the potential payoff, the larger their performance improvement is 

likely to be. Although financial considerations are not the sole motivation 

for seeking high performance, physician organizations said they would 

like incentive payments to cover the costs of participating in the 

initiative—including the cost of data collection and the cost of improving 

performance.

Specifically, most private entities paid incentives 

within 7 months of the end of the performance period. For instance, 

BCBS MI distributes PGIP incentive payments to physician organizations 

2 months after the end of the 6-month performance period. BCBS MA 

provides AQC groups interim incentive payments monthly, and these 

payments are reconciled during the year after the annual performance 

period ends to reflect actual performance.

Physician organizations in our review generally found the various types of 

incentive payments to be fair and useful from a management perspective.

For instance, MedChi, the Maryland State Medical Society, reported that 

physicians are attracted to CareFirst’s PCMH add-on to the fee schedule 

because it provides up-front capital that could be used to enhance 

productivity. In addition, according to a physician leader at ProHealth, the 

per-member per-month incentive payment under Cigna’s CAC initiative 

helps with forecasting revenue and planning infrastructure improvements.

Finally, representatives from the Mesa County Physicians IPA said that 

the withhold incentive structure established by Rocky Mountain Health 

Plans’ Incentive Program works to keep physician groups attentive to 

performance improvement by knowing that some payment is at risk.

From the physicians’ perspective, timely incentive payment cycles from 

private entities can be helpful for monitoring and adjusting performance.

Physician organizations included in our review stated that incentive 

 

36Several private entities also noted that they give physicians an opportunity to dispute 

their performance scores or underlying data prior to the incentive payment.

Physicians 
 

Page 22 GAO-13-160 Medicare Physician Payment

payments should be distributed soon after the achievement of 

performance to make the most difference. They noted in letters to CMS 

that, if an incentive is paid out very infrequently or if there is not a good 

understanding of how performance relates to incentive payment, it is 

unlikely to motivate improvement.

A common element of most private entities with incentive initiatives is 

providing support to physicians for certain care-coordination activities.37

 

37Care coordination is designed to reduce preventable hospitalizations arising from 

inadequate or inappropriate care, improve patient adherence to recommended medication 

and self-care regimens, and ensure communication among the many providers whom a 

patient sees. It is often used for patients with special health care needs or chronic health 

conditions.

We found that several private entities fund or partially offset the costs of 

ancillary providers—such as health coaches or nurse coordinators—who 

furnish care-management services to patients with certain health 

conditions. CareFirst’s PCMH, for one, hires local nurse coordinators and 

compensates physicians for preparing and monitoring care plans for 

certain patients. Physicians receive $200 for each care plan created—

working with CareFirst’s nurse coordinators to identify patients with 

multiple chronic diseases—and $100 periodically to review and update 

those care plans. Private entities in our review that provide financial 

support for care management may increase physician office visit fees or 

make up-front payments to physicians for care coordination. As a key 

element of its CAC initiative, Cigna provides physician groups with an upfront care-coordination payment, which helps support nurse care 

coordinators charged with reaching out to and coordinating the care for 

patients who have been identified as at risk for hospital readmissions or 

who have gaps in care. 

Private Entities Support 

Care Coordination with 

Additional Resources and 

Performance Metrics; 

Physicians Say PlanProvided Data Help 

Coordinate Care

Private Entities
 

Page 23 GAO-13-160 Medicare Physician Payment

Some private entities we spoke with explicitly address care coordination 

in their performance measurement sets. For example, CA P4P uses a 

“care transitions” metric to assess whether physician groups have 

systems in place to follow up with a patient after laboratory tests and 

imaging services, as well as a care-coordination outcomes metric related 

to hospital readmissions. In addition, CareFirst’s nurse coordinators are 

responsible for monitoring physicians’ performance on metrics related to 

physician–patient engagement as a measure of physician groups’ ability 

to provide coordinated care. Many private entities reported that they 

provide physicians participating in their initiatives with information on gaps 

in care. UnitedHealth Group provides physicians with access to a webbased portal that uses claims data to identify gaps in care and 

opportunities for improvement. The portal identifies patients who may be 

due or overdue for preventive services or other health care services.

In addition to receiving financial support, physician organizations in our 

review approved of other efforts by private entities to advance care 

coordination. According to Massachusetts Medical Society 

representatives, physician groups have used data from insurers and other 

sources to target patients who would benefit most from care coordination.

For example, a physician group reviews the data during weekly meetings 

where a clinical team discusses each physician’s list of patients and 

determines whether patient follow-up is needed. Similarly, ProHealth case 

managers use data from Cigna to schedule follow-up appointments, focus 

on care transitions, and serve as liaisons to Cigna’s nurse care 

coordinators. Selected organizations noted that such care coordination 

has the potential to both improve patient outcomes and moderate cost 

growth.

Physicians 
 

Page 24 GAO-13-160 Medicare Physician Payment

Several private entities in our study augment their payment initiatives with 

other strategies that offer physicians incentives to improve quality and 

efficiency:

• Some private entities report physician group performance results 

publicly. IHA publishes information on many CA P4P metrics on the 

state’s Office of the Patient Advocate website. It cited a survey of 

physician organizations by a P4P program evaluator indicating that 

public reporting may motivate physician organizations to improve 

performance as much as, or more than, the financial incentives.38

• Some private entities use tiered physician networks as an incentive 

for patients to seek care from physicians deemed to be higher quality, 

more efficient, or both. Members who use physicians assigned to a 

high-quality, low-cost provider tier may receive a modest reduction in 

their coinsurance. A Cigna representative told us that tiered network 

options are available in all of its major markets. Individual physicians 

and physician groups can be designated as high quality and efficient 

on the basis of performance provided that they meet Cigna’s required 

thresholds for patient sample size.

• UnitedHealth Group conducts a Premium Designation program to 

distinguish those physicians—and physician groups, by specialty—

who deliver higher-quality and more-efficient care from other 

physicians or physician groups. UnitedHealth Group representatives 

noted that, although this program does not necessarily lead to lower 

cost sharing, it is designed to enhance transparency for plan 

members, which in turn may motivate physician performance. When a 

physician does not have a large enough sample size for reliable 

measurement, this is noted in the public designation displays.

 

38Cheryl L. Damberg et al., “Taking Stock Of Pay-For-Performance: A Candid Assessment 

From The Front Lines,” Health Affairs, vol. 28, no. 2 (2009): 517-525.

Some Private Entities 

Publicly Report Metrics 

and Use Tiered Networks, 

but Physician 

Organizations Generally 

Oppose These Mechanisms

Private Entities
 

Page 25 GAO-13-160 Medicare Physician Payment

Physician organizations in our review noted that physicians generally 

oppose public reporting and network tiering but may respond positively to

other nonpayment incentives. They cautioned against publicly reporting 

performance at the individual physician level because of data reliability 

and methodological concerns. In addition, according to representatives 

from the Massachusetts Medical Society, physicians in the state also are 

generally against network tiering in part because of concerns related to 

arbitrary thresholds based on relative performance and inaccurate 

information from claims data. However, selected organizations noted that 

using peer pressure within a physician group, reducing administrative 

burdens associated with participating in incentive initiatives, and 

improving the technological capabilities of physician groups could help 

increase the quality and efficiency of care.

CMS’s efforts—particularly through the Value Modifier program—to 

reform the Medicare physician payment system reflect, to varying 

degrees, the common themes we identified among private entities with 

physician payment initiatives. CMS is moving toward broader physician 

group-level performance measurement, but this level of measurement 

does not currently apply to small-practice physicians in the Value Modifier 

program. According to CMS, the agency is taking steps toward 

standardizing performance metrics across its programs and continues to 

solicit specialty care metrics. In its Value Modifier benchmarking strategy, 

CMS plans to tie physician incentives to absolute benchmarks, but not to 

performance improvement. It also plans to initially provide small 

downward fee adjustments to participating low performers and budgetneutral fee increases to participating high performers, but these 

adjustments will occur a year after the performance period ends.

Additionally, CMS has recently taken action to promote greater care 

coordination and publicly report physician performance.

Physicians 

CMS’s Efforts to Tie 

Physician Payments 

to Quality and 

Efficiency Reflect, to 

Varying Degrees, 

Common Themes of 

Private Entities with 

Physician Payment 

Initiatives 
 

Page 26 GAO-13-160 Medicare Physician Payment

CMS has taken a number of steps toward broader physician group-level 

measurement for incentive payments. The agency recently announced it 

would modify its performance data collection by easing PQRS reporting 

requirements for physician groups. Because many physician practices 

report performance data as individual providers, CMS has sought to 

promote physician group-level reporting by making PQRS group-reporting 

requirements more flexible. In 2013, CMS intends to give physician 

groups the option of having CMS calculate quality metrics from claims 

data.39

In addition, CMS intends to initiate the Value Modifier at the group level 

and has expanded the number of ACOs serving Medicare beneficiaries.

Starting in 2015, CMS plans to apply the Value Modifier to claims 

submitted by physicians in groups with 100 or more eligible professionals 

that bill Medicare under a single Tax Identification Number (TIN). CMS 

stated that incentives paid under a physician group TIN not only allow for 

more reliable measurement than at the individual level, but elevate the 

importance of the group in which a physician practices—since each 

physician in the group receives the same payment modifier. In addition, 

CMS has increased the number of physicians who are eligible for 

incentive payments at the group level by adding to the number of ACOs 

under contract. After initially signing 65 ACOs as of April of 2012, CMS 

now contracts with 153 ACOs that serve more than 2.4 million 

beneficiaries, and the agency accepts new ACO applications annually.

In addition to administrative claims-based reporting, CMS plans to 

offer alternative ways to meet group PQRS reporting standards, including 

through a web-based interface.

Although these steps are designed to raise the number of physicians 

whose performance will be measured at the group level, CMS has not yet 

developed a method of reliable measurement for physicians in small 

practices in the Value Modifier program. Without such a method, the 

agency will likely measure those in small practices at the individual level 

in 2015, the performance year likely to determine the application of the 

 

39An Agency for Healthcare Research and Quality report noted that because 

administrative data, including claims data, are intended for financial management rather 

than quality assessment, they contain varying degrees of clinical detail and are often 

limited in content, completeness, timeliness, and accuracy. Patrick Romano, Peter 

Hussey, and Dominique Ritley, Selecting Quality and Resource Use Measures: A 

Decision Guide for Community Quality Collaboratives, Final Contract Report (prepared by 

the University of California and RAND Corporation, under contract No. 08003967), AHRQ 

Publication No. 09(10)-0073 (Rockville, Md.: AHRQ, May 2010).

CMS Has Taken Steps to 

Expand Physician GroupLevel Measurement, but 

Plans for Measuring Small 

Practices at This Level 

Remain Undeveloped in 

the Value Modifier 

Program
 

Page 27 GAO-13-160 Medicare Physician Payment

Value Modifier for all physicians in 2017. According to CMS, the decision 

not to initially apply the Value Modifier to established groups of less than 

100 eligible professionals stemmed from concerns regarding untested 

cost metrics and administrative complexity. For instance, CMS reported 

that allowing physicians to be measured as an informally defined group 

would require the agency to establish and maintain additional group 

identifiers that would not as easily account for organizational changes.

While CMS has reported that the agency intends to assess the possibility 

of allowing the aggregation or disaggregation of TINs in future years, it 

has not outlined a strategy to reliably measure the performance of the 

majority of physicians—those in small practices. According to CMS 

officials, among physicians that serve Medicare fee-for-service 

beneficiaries, more than two-thirds currently practice in groups of less 

than 25 individuals.

CMS officials stated that they do not plan to direct recipients on how to 

use incentive payments. Agency officials said there are no requirements 

for physician groups to use incentive payments for any particular 

purposes. In the case of ACOs, CMS asks applicants to identify how they 

plan to use payments to achieve the goals of the Shared Savings 

program—higher quality and lower cost—but it has not been prescriptive 

on how ACOs can use their shared savings.40

According to CMS officials, the agency is taking steps to both develop a 

standard set of metrics across its programs and enlarge the number of 

specialty care metrics in use. By 2014, the agency intends to further align 

the metrics in its Electronic Health Record (EHR) Incentive,41

 

40ACOs reported to CMS that they plan to use potential shared savings for various 

purposes, including physician financial incentives, shareholder obligations, electronic 

medical record implementation, hiring care coordinators, and measuring performance for 

physician feedback.

Shared 

Savings, and Value Modifier programs. By incorporating metrics that are 

endorsed by entities such as NQF, CMS’s claims-based metrics may 

41The EHR Incentive Programs, established by the American Recovery and Reinvestment 

Act of 2009, established programs under Medicare and Medicaid to provide incentive 

payments to eligible professionals and hospitals for the “meaningful use” of certified EHR 

technology. See GAO, Electronic Health Records: First Year of CMS’s Incentive Programs 

Shows Opportunities to Improve Processes to Verify Providers Met Requirements, 

GAO-12-481, (Washington, D.C.: Apr. 30, 2012).

CMS Has Begun 

Standardizing Metrics and 

Seeking Ways to Better 

Measure Specialty Care
 

Page 28 GAO-13-160 Medicare Physician Payment

align with many private-sector programs as well.42 CMS is also seeking 

ways to increase metrics for specialty care. For example, agency officials 

said that while they do not formally task specialty societies with 

developing measures specifically for PQRS, they annually solicit input on 

metrics from stakeholders, including medical specialty societies.

Furthermore, CMS is considering allowing metrics that have been 

developed, collected, approved, and vetted by specialty societies to be 

reported on the Physician Compare website. The agency could potentially 

choose to include these specialty metrics in PQRS.

CMS plans to implement the Value Modifier by providing incentives only 

to physicians determined to be performance outliers on the basis of 

benchmarks using absolute targets based on existing performance, but 

not performance improvement. Beginning in 2013, physician groups with 

100 or more eligible professionals that meet PQRS reporting standards 

can either elect to have their 2015 Medicare payment modified under a 

quality tiering approach or choose to effectively not have their payment 

modified at all.43 For physician groups that select the quality tiering 

approach, only those with outlier scores in either quality or cost would be 

eligible for a payment adjustment; those in the highest tier would 

potentially see an increase in their payments under the fee schedule and 

those in the lowest tier would potentially see a reduction.44

 

42CMS officials noted that the agency does not seek to use solely NQF metrics, but can 

select from metrics that are not NQF-endorsed if certain areas of metrics do not exist in 

the body of NQF-endorsed metrics. In this case, CMS can use metrics from various 

entities, such as NCQA and specialty societies.

Physician 

group scores would be a composite derived from performance relative to 

the prior year national average for each applicable quality metric; cost 

43To meet PQRS reporting standards, physician groups will need to a) self-nominate for 

the PQRS as a group for 2013 and report at least one measure, or b) elect the PQRS 

administrative claims option for 2013.

44In contrast, CMS’s ACO quality benchmarks reward performance on the basis of a 

graduated level or sliding scale that starts at the 30th percentile.

CMS to Target Outlier 

Performers and Use 

Absolute Benchmarks but 

Not Reward Improvement 

under Value Modifier 

Program
 

Page 29 GAO-13-160 Medicare Physician Payment

would be measured using current year comparisons.45 Physician groups 

with low quality or high cost scores in a prior period will not be rewarded 

for either graduated levels of performance or improving their 

performance. CMS officials reported that the agency does not plan to 

consider rewarding performance improvement in the Value Modifier until 

more physicians participate in PQRS, and thus provide the agency with a 

more reliable understanding of how to set targets. However, until then, 

CMS’s benchmarking strategy will make it less likely that many physicians 

will choose to put a portion of their payment at risk through the Value 

Modifier program. Because of current incentives, the quality tiering 

approach is likely to encourage participation only by those groups of 

physicians with high prior scores.

Agency officials reported that CMS plans to initially set the size of the 

Value Modifier fairly low. Medicare physicians participating in the qualitytiering approach of the Value Modifier program could potentially receive a 

downward adjustment of as much as 1 percent or an upward adjustment 

of up to two times a budget-neutral factor. (See table 2.) Because CMS’s 

Value Modifier program must be budget neutral, upward adjustments are 

multiplied by a factor derived from the sum total of negative adjustments 

for both low performers and non-PQRS reporters. CMS officials told us 

they would like to receive performance data from the majority of 

physicians before considering any increase to the magnitude of the Value 

Modifier. The agency stated that it does not want to initially apply a 

greater downward payment adjustment for the low-quality/high-cost 

physician groups opting for the quality-tiering approach than that of 

nonsatisfactory PQRS reporters (1.5 percent in 2015). 

 

45CMS will produce a score for each measure that is expressed in standardized units that 

divide the difference between a physician group’s performance rate and the benchmark by 

the metric’s standard deviation. Each quality metric will be assigned to one of six domains 

(i.e., clinical care, patient experience, population/community health, patient safety, care 

coordination, and efficiency). For cost of care scores, CMS’s total per capita cost metric 

will be its own domain, and its total per capita cost metrics for each of four chronic 

diseases will be in a separate domain. CMS will weight each measure’s standardized 

score equally with other measures in the domain to obtain the domain standardized score.

CMS will weight the domain scores equally to form the quality of care and cost composites 

scores. 

Value Modifier to Start 

Small with Fees Adjusted 

Annually, 1 Year after the 

Performance Period Ends, 

Rather Than More 

Frequently
 

Page 30 GAO-13-160 Medicare Physician Payment

Table 2: CMS’s 2015 Value-Based Payment Modifier for Physician Groups That Choose the Quality-Tiering Approach

Physician groups by cost performance

Physician groups by 

quality performance Low cost performers Medium cost performers

High cost 

performers

High quality performers +2.0 multiplied by a budget-neutral factor +1.0 multiplied by a budget- neutral factor a,b 0.0% a,b

Medium quality performers +1.0 multiplied by a budget-neutral factor 0.0% a,b -0.5%

Low quality performers 0.0% -0.5% -1.0%

Source: CMS.

a

Because CMS’s Value-Based Payment Modifier program must be budget neutral, upward 

adjustments are multiplied by a factor derived from the sum total of negative adjustments for both low 

performers and nonreporters in the Physician Quality Reporting System (PQRS). To meet PQRS 

reporting standards, physician groups will need to a) self-nominate for the PQRS as a group for 2013

and report at least one measure, or b) elect the PQRS administrative claims option for 2013.

b

Moreover, to meet the budget-neutrality requirement for the Value 

Modifier, CMS decided to help fund participating high performers’ 

payment incentive by imposing an automatic downward adjustment of 

1 percent for non-PQRS reporters.

Physician groups that meet PQRS reporting requirements and furnish services to high-risk 

beneficiaries, those with an overall average risk score in the top quartile, are eligible for an additional 

upward adjustment of 1.0 multiplied by a budget-neutral factor.

46

Agency officials said that CMS expects to apply its Value Modifier 

annually 1 year after the performance period ends.

Funds derived from downward 

adjustments for physicians with significantly poor performance or who do 

not meet performance reporting standards are CMS’s sole funds to 

increase the size of its performance incentive in the Value Modifier 

program.

47

 

46Physician groups may avoid the 1.0 percent downward adjustment to their 2015 

payment if they either (a) self-nominate for the PQRS as a group and report at least one 

measure or (b) elect that CMS compute metrics through the PQRS administrative claims 

option for 2013.

The agency has 

chosen to provide performance feedback reports 9 months after the end 

of the performance year, about 3 months before it would be applicable to 

the Value Modifier. For example, CMS would disseminate physician 

group feedback reports in the fall of 2014 that contain 2013 performance 

data to physician groups subject to the Value Modifier, and these reports 

will be the basis for the Value Modifier starting in 2015. According to 

47CMS uses a 12-month performance period, which officials say gives the agency more 

reliable measures, sample sizes, and cost metrics. 
 

Page 31 GAO-13-160 Medicare Physician Payment

agency officials, the interval between the performance period and the 

initial feedback reports is needed to capture a lag in data submissions (up 

to 3 months after the end of the year), adjust claims for price 

standardization and risk, and conduct quality assurance testing. However, 

CMS may have a sufficient amount of reliable performance data with 

which to make more timely incentive payments in the Value Modifier 

program. The Research Data Assistance Center—a CMS contractor that 

provides technical support on Medicare claims processing—states that 

claims data are generally complete 6 months from the end of the calendar 

year. For example, over 96 percent of Medicare claims from 2011 were 

finalized by July of 2012.

CMS supports care-coordination incentives through several approaches.

For 2013, CMS designated three additional care-coordination metrics in 

its administrative-based claims reporting for the group Value Modifier. For 

example, because care-coordination programs may reduce hospital 

readmissions,48 CMS plans to measure the rate of hospital readmissions 

within 30 days after being discharged. In addition, to encourage patient 

follow-up postdischarge, CMS has developed a set of physician billing 

codes for services delivered within 30 days of discharge from a hospital 

or skilled nursing facility. Finally, CMS pays a monthly care-management 

fee to selected primary care practices under both its Comprehensive 

Primary Care Initiative and Multi-Payer Advanced Primary Care Practice 

Demonstration for purposes such as coordinating care for high-risk 

beneficiaries and helping to engage them in their care.

In addition to regularly providing performance feedback to physicians, 

CMS intends to report physician performance scores to the public. As 

required by PPACA, CMS has implemented a plan for publicly reporting 

physician quality and patient experience metrics through the Physician 

Compare website. CMS developed Physician Compare to make 

information on quality of care widely available so that beneficiaries can 

make informed decisions in their choice of physician, and to encourage 

physicians to improve their quality of care. Agency officials said that CMS 

will begin publicly reporting statistically reliable performance results of 

 

48See Report to the Congress: Medicare and the Health Care Delivery System, 

(Washington, D.C.: Medicare Payment Advisory Commission, June 2012), 37.

CMS’s Efforts Have 

Increasingly Focused on 

Promoting Care 

Coordination 

CMS Plans to Publicly 

Report Physician Groups’ 

Performance Metrics on Its 

Physician Compare 

Website 
 

Page 32 GAO-13-160 Medicare Physician Payment

physician groups submitted through the PQRS Group Practice Reporting 

Option in 2013 or early 2014.

Many of the themes we identified among private entities implementing 

payment incentives are generally accepted by physician organizations in 

our study and are reflected—in whole or in part—in CMS’s efforts to 

implement the Value Modifier program. CMS has recognized the 

importance of group-level measurement, particularly through its initial 

application of the Value Modifier exclusively to physician groups. 

According to CMS officials, the agency has also begun to standardize its 

metrics across its programs while generally adhering to nationally 

accepted measures that are endorsed by entities such as NQF. Finally, 

CMS has taken steps to provide incentives for greater care coordination 

through both additional payments and performance metrics.

While CMS has taken steps toward addressing measurement of large 

physician groups, PPACA requires that the Value Modifier apply to all 

physicians—including those in solo and small practices—in 2017. To 

meet this requirement, CMS must address concerns regarding how best 

to reliably measure performance at that level. The challenge of measuring 

the performance of physicians in solo and small practices is more 

significant for CMS than for private entities because Medicare provides 

payment to any willing provider of care for beneficiaries. Yet, CMS has 

not laid out a strategy for its eventual application of the Value Modifier to 

solo and small-practice physicians in a manner that ensures 

measurement credibility. Options for doing so could include aggregation 

of solo and small practices into informal groups for measurement 

purposes.

Despite similarities to some themes found among private entities with 

physician payment initiatives, other themes are not fully reflected in 

CMS’s Value Modifier program. For instance, most of the private entities 

in our study provide incentives that are tied to absolute performance 

benchmarks or some combination of absolute benchmarks and improved 

performance; in addition to approving the use of absolute benchmarks, 

physicians in our review favored incentives that reward improvement 

because baseline levels of performance vary. Until CMS provides 

incentives for improvement, it is likely that few physician groups that are 

not already high performers will opt to participate in its quality-tiering 

approach.

Conclusion 
 

Page 33 GAO-13-160 Medicare Physician Payment

Additionally, because CMS’s Value Modifier adjusts payments to 

physicians a year after the end of the performance period, the motivation 

to improve performance is diluted. While CMS has noted the need for 

1 year to ensure accurate data, most of the private entities we contacted 

make incentive payments within 7 months of the end of the performance 

period so that physicians can readily see the financial effect of their 

performance. CMS’s 1-year time lag between performance measurement 

and payment adjustment may diminish the significance of the incentive to 

physicians.

As CMS continues to implement and refine the Value Modifier program to 

enhance the quality and efficiency of physician care, the Administrator of 

CMS should consider whether certain private-sector practices could 

broaden and strengthen the program’s incentives. Specifically, she should 

consider

• developing at least some performance benchmarks that reward 

physicians for improvement as well as for meeting absolute 

performance benchmarks, and

• making Value Modifier adjustments more timely in order to better 

reflect recent physician performance.

The Administrator should also develop a strategy to reliably measure the 

performance of solo and small physician practices, such as by 

aggregating their performance data to create informal practice groups.

We provided a draft of this report to HHS for comment. In its written 

response, reproduced in appendix I, the department concurred with all 

three recommendations. Specifically, HHS stated that 

• it will consider developing performance benchmarks that reward 

physician improvement once the agency has greater physician 

reporting on quality measures; 

• as it develops the technology to handle claims data and quality data 

more rapidly, it will look for ways to decrease the gap between the 

performance period and the application of the Value Modifier; and

• it will seek to develop strategies to reliably measure the 

performance of solo and small physician practices.

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 34 GAO-13-160 Medicare Physician Payment

HHS also provided technical comments, which we incorporated as 

appropriate.

We are sending copies of this report to the appropriate congressional 

committees and the Administrator of CMS. The report also is available at 

no charge on GAO’s website at http://www.gao.gov. 

If you or your staff have any questions regarding this report, please 

contact me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this report. GAO staff who made major contributions to 

this report are listed in appendix II.

James Cosgrove

Director, Health Care
Appendix I: Comments from the Department of 

Health and Human Services

Page 35 GAO-13-160 Medicare Physician Payment

Appendix I: Comments from the Department 

of Health and Human Services
Appendix I: Comments from the Department of 

Health and Human Services

Page 36 GAO-13-160 Medicare Physician Payment
Appendix I: Comments from the Department of 

Health and Human Services

Page 37 GAO-13-160 Medicare Physician Payment
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 38 GAO-13-160 Medicare Physician Payment

James Cosgrove, (202) 512-7114 or cosgrovej@gao.gov

In addition to the contact named above, individuals making key 

contributions to this report include Rosamond Katz, Assistant Director; 

David Grossman; Kate Nast; and Luis Serna III.

Appendix II: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(291038)
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations 

Public Affairs

Please Print on Recycled Paper.