Objective: To evaluate the impact of a “piece-rate” pay for performance (P4P) program aimed at improving diabetes care processes, outcomes and related healthcare utilization for patients enrolled in a not-for-profit Medicaid-focused managed care plan.

Methods: To evaluate Hudson Health Plan’s P4P program in New York (2003-2007), we conducted: (1) a case-comparison difference-in-difference study using plan-level administrative data; (2) a patient-level claims data analysis; and (3) a cross-sectional survey.

Results: The case-comparison study found that diabetes care processes (e.g., HbA1c, lipid, and dilated eye exam rates) and outcomes (e.g., LDL-C<100mg/dL) did not improve significantly over the study period. Claims analysis showed that younger adults had significantly increased odds (OR 3.50-3.56, p<0.001) of using emergency and hospital-based services and similarly decreased odds of receiving recommended care process (OR 0.22-0.36, p<0.01-0.001). Survey study indicated that practices lack fundamental quality improvement infrastructures and training.

Conclusions: Recent health legislation mandates the use of P4P incentives in government programs that disproportionately care for patients with lower socioeconomic or minority backgrounds (e.g., Medicaid, Veterans Health Administration, and Tricare). More research is needed in order to understand how to tailor P4P programs for vulnerable care settings.