Some major third-party payers have put in place pay-for-performance programs for physicians.

Under these programs, physicians are compensated based on an evaluation of their performance, typically in the form of bonuses in addition to fee-for-service compensation.

The Centers for Medicare & Medicaid Services (CMS) is preparing to phase in a system whereby physicians who provide care to Medicare fee-for-service patients will receive bonuses or penalties depending on their performance. One of the goals of pay-for-performance programs is to encourage more cost-effective care, such as eliminating unnecessary tests and hospitalizations.

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