WASHINGTON – The Centers for Medicare & Medicaid Services announced Thursday that all physician groups participating in the Physician Group Practice Demonstration have earned $16.7 million in incentive payments for improving the quality of care delivered to chronic disease patients.

The 10 groups earned the incentive payments under the CMS demonstration that rewards healthcare providers for improving health outcomes and coordinating the overall healthcare needs of Medicare patients with congestive heart failure, coronary artery disease, and diabetes mellitus.

The payments were for the second performance year of the project, covering April 1, 2006 through March 31, 2007. The initial three-year demonstration was extended for a fourth performance year, which runs through March 2009.

"We are paying for better outcomes and we are getting higher quality and more value for the Medicare dollar," said Kerry Weems, acting administrator of CMS.  "These results show that by working in collaboration with the physician groups on new and innovative ways to reimburse for high quality care, we are on the right track to find a better way to pay physicians."

Weems said the physician groups achieved outstanding levels of performance by having "clinical champions" at the practice, redesigning clinical care processes, and investing in healthcare information technology. Enhancements to electronic health records and patient registries allowed practices to more easily identify gaps in care, alert physicians to these gaps during patient visits, and provide interim feedback on performance.

According to CMS, all 10 of the participating physician groups achieved benchmark or target performance on at least 25 of 27 quality markers for patients with diabetes, coronary artery disease and congestive heart failure.