The AMA News in its July 24/31 issue reports on a “pay for quality” pilot conducted by Healthspring‘s Medicare Advantage plan and the Sumner Medical Group, a 15 doctor group in Tennessee. (I was in Nashville this week and greatly enjoyed a Tuesday performance of the Grand Ole Opry.)

In this program, Healthspring retained Healthways, a local disease management company, to provide Sumner Medical with free nursing support to track patients with chronic illnesses between visits, among other services. Healthspring also offered the Sumner Group doctors a 20% pay bonus for hitting quality targets.

Sumner Medical informed the AMA News that the program resulted in an improvement in their patients’ health outcomes. The doctors appreciated that the health plan assumed the cost of the disease management nurses and did not impose a financial penalty on the doctors. The health plan enjoyed the medical underwriting gain from the program. Healthspring is planning to extend the program to 12 other markets. Other health plans are evaluating Healthspring’s model.