Many health care purchasers are trying to link health care spending to quality and efficiency through pay-for-performance (P4P) programs. This report, 'Pay-for-Performance in State Medicaid Programs: A Survey of State Medicaid Directors and Programs', examines the current and planned P4P activities of state Medicaid programs, based on a survey and follow-up interviews with state Medicaid directors and their staffs as well as review of related documents. The authors found that more than half of states currently operate one or more pay-for-performance programs and nearly 85 percent expect to do so within the next five years. Health information technology is an important component of programs now in development. The report outlines the most common measures and incentives, discusses evaluation and reporting approaches, and provides detailed descriptions of each of the pay-for-performance programs. The findings should inform state governments and other stakeholders that are considering modifying or adopting pay-for-performance strategies.