Bonus scheme for best Leicestershire care homes
Cash bonuses could be offered to nursing and residential homes in Leicestershire in an effort to reward best practice.
The county council has contracts with 194 homes, with more than 10% only rated as "adequate" or worse.
Officials said the £2m scheme would see cash rewards for the top performers and penalties for those below standard.
But Age Concern said all homes should be paid enough to guarantee quality care as standard.
In April, the council froze the rates it pays private care homes to look after residents.
But Councillor David Sprason, lead member for adults and communities, said the focus of the changes was clear.
"This is about making sure the most vulnerable people in Leicestershire are protected and this is about driving up quality.
"We don't want those homes that fail people. At the end of the day we have to say, 'if you can't come up to the standard, do you really want to be in business?'."
The authority would consider stopping further placements being made at the poorest homes, he confirmed.
Tony Donovan, chief executive of Age Concern in Leicestershire, said he was uncomfortable with the idea.
"I am seriously concerned they want to incentivise the process by offering financial rewards.
"My own view is that as a matter of course all care homes should operate to the highest possible standards.
"But the only way homes can do that is by having an appropriate rate of pay from the council which allows for investment in every aspect of the home."
The bonus scheme will use ratings from the Care Quality Commission.
If the cabinet approves the proposals later this month, the council will start consultation in the summer, with a view to introducing the changes later in the year.