What is Pay for Performance (P4P)?

Blue Cross Blue Shield of Michigan (BCBSM) has a hospital incentive-based programs called pay-for-performance, or P4P. The program recognizes hospitals that excel at care quality, cost-efficiency and population health management. P4P are incentives based on participation and performance in quality and outcome measures. Scorecards transition to greater weight on performance as a CQI becomes more established.


The program will pay hospitals, in aggregate, an additional 5 percent of statewide inpatient and outpatient operating payments –  nearly $190 million statewide.

The current program year will closely follow the structure, performance measurement and incentive framework of the 2020 program year, with two exceptions:
- the Cost Efficiency component has been retired
- 5 points have been added to the HIE component

 As an example, the following table summarizes the 2021 P4P program structure: 

New in 2020, hospitals who participate in all CQIs for which they have been recruited will be eligible for a fixed-dollar bonus paid from the unearned incentive dollars within the CQI component. All other remaining unearned dollars will be paid based on the multiplier concept. The below chart provides the potential bonus by hospital, depending on the number of CQIs in which they participate: 


BCBSM Slides on the Pay for Performance (P4P) Program