Agency for Healthcare Research and Quality (AHRQ) - a federal agency charged with improving the quality of healthcare in the United States. The AHRQ's main functions are to sponsor and conduct research that provides evidence-based information on healthcare outcomes, quality, cost-effectiveness, use and accessibility. This information is intended to help healthcare decision makers (including policymakers, health system directors and clinicians) make informed decisions that improve quality. Among other things, the agency is responsible for developing and testing healthcare quality measures and studying ways to implement them to improve quality.

Ambulatory Care Quality Alliance (AQA) - a national consortium of organizations including the American College of Physicians (ACP) and other physician organizations; government agencies such as the Centers for Medicare and Medicaid Services (CMS) and the Agency for Healthcare Research and Quality (AHRQ); health insurance plans and other groups. The AQA is dedicated to "improving health care quality and patient safety through a collaborative process in which key stakeholders agree on a strategy for measuring performance at the physician level; collecting and aggregating data in the least burdensome way; and reporting meaningful information to consumers, physicians and other stakeholders to inform choices and improve outcomes." The AQA has proposed a "starter set" of performance measures applicable to care in ambulatory, long-term care and other settings. The Institute of Medicine recently recommended using these "starter" measures as a first step toward adopting comprehensive, universal healthcare performance measures.

American Medical Association (AMA) Physician Consortium for Performance Improvement - a group that includes medical specialty and state medical societies; the Agency for Healthcare Research and Quality (AHRQ); the Centers for Medicare and Medicaid Services (CMS) and other organizations. Established by the American Medical Association (AMA), its goal is to "ensure that medicine has a leadership role in forums designed to evaluate quality of care and that it serves as a leading source for evidence-based clinical performance measures."

Centers for Medicare and Medicaid Services (CMS) - the federal agency that administers the nation's Medicare program and partners with the states to administer Medicaid and the State Children's Health Insurance Program (SCHIP). CMS has additional responsibilities including ensuring quality in health care facilities. Among other things, CMS is "working to improve the quality of healthcare by measuring and improving outcomes of care." CMS will play a key role in efforts to incorporate pay for performance into Medicare policy, is working with a wide range of organizations and stakeholders to evaluate possible measures of quality and cost-effectiveness, and has begun launching pilot Medicare pay-for-performance programs. These pay-for-performance programs are titled value-based purchasing initiatives.

measures - standards used to assess the quality and cost-effectiveness of healthcare. Among the many private health plans with pay-for-performance programs (most of these are have been introduced in HMOs, but an increasing number are being introduced into preferred provider organizations (PPOs)) measures vary considerably. Some measures are intended to be used at the system or institutional level and others at the individual provider level. Measures also vary in their intended impact. Some serve as quality improvement measures and others as "accountability" measures. To date, only measures for "accountability" are proposed for P4P. Most P4P programs use a variety of measures, including: clinical quality and effectiveness measures (e.g. measures to determine how often patients receive treatments shown to lead to the best possible outcomes); utilization and cost management measures; patient satisfaction measures (often based on patient survey results); administrative measures (e.g, measures that consider the extent to which clinicians use such things as patient registry systems, evidence-based clinical decision support tools, and electronic medial records to enhance quality); and patient safety measures.

Medicare Economic Index (MEI) - a measure of the cost of providing medical care. The MEI values a "market basket" of inputs to the price of health care (salaries, equipment, services, etc) to assess annual changes in the price of health care. The MEI is used, in conjunction with the Sustainable Growth Rate formula (see "Sustainable Growth Rate (SGR)"), to update Medicare physician fee schedules.

Medicare Payment Advisory Commission (MedPAC) - an independent federal advisory body established by the Balanced Budget Act of 1997 to advise the U.S. Congress on issues affecting Medicare. Among other things, MedPAC advises Congress on payments to private health plans and healthcare providers caring for Medicare beneficiaries.

National Committee for Quality Assurance (NCQA) - an independent, non-profit organization dedicated to measuring and improving the quality of health care in the US. The organization is governed by a board of directors that includes employers, consumer and labor representatives, health plans, quality experts, regulators, and members of medical organizations.

NCQA's Physician Practice Connections (PPC) - A program through which the NCQA recognizes physician practices that alter their practice design to regularly measure quality indicators and refine their practices. NCQA PPC standards promote the use of electronic information systems and related tools to improve patient care. Bridges to Excellence, a P4P program, is among those that offer financial rewards to physician practices that NCQA recognizes through the PCC program.

National Quality Forum (NQF) - a private, non-profit, congressionally-recognized organization established to develop and implement a national strategy for health care quality measurement using consensus-based national standards. Among other things, the NQF is charged with approving P4P quality measures prior to their adoption. By law, the Centers for Medicare and Medicaid Services (CMS) is required to either use evidence-based quality measures that have been endorsed by the NQF, or publish a public notice explaining why it plans to use other measures.

pay for performance (P4P) - an approach or policy that offers clinicians financial rewards for providing care that meets certain standards or "measures" intended to gauge quality and cost-effectiveness. An estimated 30 million Americans are enrolled in private health plans with P4P programs. Many P4P programs are in managed care networks. Recently, some insurers have expanded P4P into preferred provider organization (PPO) networks Efforts to introduce pay for performance into Medicare are rapidly gaining momentum. Medicare uses the name Value-Based Purchasing to describe its pay for performance initiatives.

Sustainable Growth Rate (SGR) - a federally-mandated formula used to calculate annual adjustments in Medicare payments to physicians. The SGR formula examines changes in the number of Medicare beneficiaries, the cost of newly legislated benefits, changes in physician fees and the estimated Gross Domestic Product to calculate a "sustainable" rate of growth in Medicare spending. Under the SGR formula, fees to Medicare providers are cut whenever the volume of services to Medicare beneficiaries exceeds a set level. The formula has mandated physician fee schedule cuts in recent years and these cuts have been averted only by short-term congressional fixes. Unless Congress acts again, the SGR will cut physician fees 4.4% in 2006. The American Geriatrics Society's (AGS') position is that fees should be linked the cost of practicing medicine, and that all clinicians should get positive annual updates based on inflation as measured by the Medicare Economic Index (MEI) (see "Medicare Economic Index" above). Instead of cutting payments, AGS and other medical societies suggest that Congress, the Centers for Medicare and Medicaid Services (CMS) and the Medicare Payment Advisory Commission (MedPAC) work with providers to determine why volume is increasing, and come up with polices to address unnecessary increases. In the short term, AGS and other provider groups are advocating for a positive update for 2006.

value-based purchasing - another name for pay for performance (see "pay for performance" above).