Pay-for-performance is a relatively new concept in health care and many challenges still exist in implementing this initiative. Category II Current Procedural Terminology (CPT®) codes were developed to simplify reporting of performance measures and eliminate the need for chart abstraction. These supplemental tracking codes are used by physicians and hospitals to report specific services that contribute to positive outcomes and high-quality care. The performance measures used to establish Category II CPT codes are developed by national organizations including the National Committee for Quality Assurance and the American Medical Association (AMA) Physician Consortium for Performance Improvement (PCPI) based on quality indicators currently accepted and used in the health care industry.

The Centers for Medicare & Medicaid Services (CMS) led the way for pay-for-performance programs by establishing a voluntary reporting program in January 2006. As part of this program, the CMS is collecting data on evidence-based quality measures for the...

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