Performance management systems (PMSYS) aid in improving the quality and efficiency of care, but little is known about factors that influence more robust PMSYS among physician organizations. Using a nationally representative survey of U.S. medical practices, we examined the extent to which organizational capabilities and external factors were associated with more developed PMSYS. Linear regression estimated the relative impact of these factors on PMSYS. On average, practices implemented a minority (32 points out of 100) of the PMSYS processes assessed. Practices evaluated ( p < .01) or financially incentivized by external entities ( p < .01), receiving data from health plans ( p < .01), participating in an accountable care organization ( p < .01), affiliating with an independent practice association and/or physician-hospital organization ( p < .01), and using health information technology ( p < .01) and chronic disease registries ( p < .01) to greater degrees had more robust PMSYS. PMSYS of medical practices are underdeveloped, although both external incentives and organizational capabilities may support PMSYS development.