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Determining Payment Under a Quality Incentive Agreement


Mid-Atlantic community hospital


To calculate the quality incentive payment earned by a cardiology group in year one of a compensation agreement. The agreement, between the hospital and a large cardiology group, included a quality-based incentive payment. Changes after the agreement was signed made it advisable to use a third party for the calculation.


Veralon reviewed the available data, measuring the cardiology group’s performance on the quality incentive metrics defined in the compensation agreement with the hospital.
Performance metrics included:

  • Patient satisfaction;
  • Care delivery and efficiency;
  • Quality;
  • Supply management; and
  • Strategic/programmatic objectives.


Due to an EMR implementation and other changes after the agreement was signed, it was not possible to determine values for some metrics. Using available data, Veralon determined the incentive compensation to be paid to the group and made recommendations for modifications that were accepted by both parties. We also provided recommendations on revisions to the contract to refine the metrics for year two of the agreement.

All recommendations were accepted by the physician group and the hospital.