New Jersey § 26:2h-12

§ 26:2h-12.

a. A hospital steering committee shall establish institutional and specialty-specific

goals related to patient safety, quality of care, and operational performance, which

may incorporate specific patient management tasks, care redesign initiatives, and

patient safety and quality of care objectives. In establishing these goals, the committee shall prioritize institution-specific

quality commitments and shall condition incentive payments, as well as physician participation,

upon the successful response to these goals. In addition, the committee shall ensure that: (1) no payments may be made for reducing or limiting medically necessary care; (2) the appropriate course of treatment for each patient is determined, in consultation

with the patient or the patient's representative, by the attending physician or surgeon

of record; (3) adequate safeguards are in place to ensure that there are no incentives to avoid

difficult or complex medical cases, or to withhold, reduce, or limit quality care; (4) no incentive payment may be made in any individual case for exceeding best practice

standards established under the plan; and (5) overall payments to individual physicians under a plan shall not exceed 50 percent

of the total professional payments for services related to the cases for which that

physician receives incentive payments under the plan. b. The steering committee shall establish an incentive payment methodology, which

shall be internally consistent and shall ensure that: (1) individual physician performance is objectively measured, taking into account

the severity of the medical issues presented by an individual patient; (2) incentive payments objectively correlate with physician performance and are applied

in a consistent manner to all physicians participating in the plan; (3) participating physicians are treated uniformly relative to their respective individual

contributions to institutional efficiency and quality of patient care; (4) performance and best practice standards established under the plan are based primarily

on local and regional data; (5) the methodology recognizes both individual physician performance, including a

physician's utilization of inpatient resources compared to the physician's peers,

and improvements in individual physician performance, including a physician's utilization

of inpatient resources compared with the physician's own performance over time; and (6) the elements of the methodology are properly balanced to meet the needs of physicians,

hospitals, and patients. c. The steering committee shall adopt a mechanism to protect the financial health

of the hospital. d. At least half of the members of the steering committee shall be physicians.