GPs' commitment to care pathways for older patients is patchy, Jeremy Colman, the Auditor General for Wales, said in a report on delayed transfer of care released last week.
LHBs could incentivise GPs to avoid unnecessary admissions and work with GPs with low referral rates, Mr Colman said.
The GMS contract can be used to 'develop stronger care pathways that reduce admissions to hospitals and improve well-being', he said.
Dr David Bailey, GPC Wales chairman, said that the best way to incentivise GPs to engage in care pathways would be through local enhanced services (LESs).
But he warned against any incentives for GPs not to admit vulnerable patients.
'Incentivising not admitting people to hospital is a slippery slope,' he said.
The recommendations come as figures revealed a 2 per cent rise in the number of days patients stayed in hospital waiting for transfer between 2005 and 2007.
Around £27 million could be freed up for reinvestment by solving the bed-blocking problem, Mr Colman said.
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