Medicare Compliance & Reimbursement

Your payments could see a -6% impact if you aren’t paying attention.

If you thought the Physician Quality Reporting System was a burden, that’s only the tip of the payment reform iceberg. CMS will have more reason to dock physicians’ pay come 2015, thanks to more developments with the “Value-Based Payment Modifier” (VBPM).

Originating in the Affordable Care Act, the VBPM will “adjust payments to physicians, groups of physicians, and other EPs [eligible professionals] based on the quality and cost of care they furnish to beneficiaries enrolled in the traditional Medicare Fee-for-Service (FFS) program,” the Centers for Medicare & Medicaid Services (CMS) stated in a press release. The 2015 Medicare Physician Fee Schedule final rule has since expedited the implementation of the VBPM.

CMS is already applying the VBPM in 2015 (based on 2013 reporting) for groups of 100 or more EPs. Now, solo practitioners and groups of two or more EPs are being phased in.

The plan is for providers to get payment incentives for high performance metrics and efficient spending — and payment penalties for underperformance or overspending. The quality portion of the value modifier will be calculated based on PQRS participation plus additional metrics CMS will use to calculate scores.

Bottom line: Based on non-participation in PQRS, groups of 10 or more EPs will receive a -4 percent VBPM penalty, and eligible solo practitioners and groups of 9 or less practitioners will see a -2 percent penalty.

Small Groups: Performance Now Affects Payment 2 Years Later

CMS has a statutory mandate to implement the VBPM to all physicians by 2017. That means if you’re in a group of less than 100 physicians, your payments will first be affected in 2017 — but all payment adjustments will be based on your PQRS participation and performance in 2015. In other words, 2015 is a “reporting year” and 2017 is the respective “adjustment year” for solo practitioners and groups of less than 100.

In case you were wondering: Non-physician professionals are off the hook for now, but CMS plans on beginning their VBPM reporting year in 2016 (thus 2018 is the respective payment adjustment year).

Also beginning with the CY 2017 payment adjustment period, the VBPM will apply to all EPs “that participate in ACOs [accountable care organizations] under the Medicare Shared Savings Program, the Pioneer ACO Model, and the Comprehensive Primary Care Initiative, or other similar Innovation Center models or CMS initiatives,” notes Shari Erickson, VP of governmental affairs and public policy for the American College of Physicians.

Double-whammy: The PQRS nonparticipation penalty is still alive and well … and independent of the VBPM adjustment. The PQRS penalty is -2 percent, and the VBPM penalty is either -2 or -4 percent, depending on your group size. That means in 2017, the total penalty for EPs could be as high as -6 percent. And if you count the meaningful use EHR incentive program, some practitioners could see payment penalties as high as 11 percent.

Know How You’re Scored

So how are providers’ VBPM “scores” determined? Medicare is focusing on two major categories: quality and cost. In other words, is your care meeting basic standards, and are you providing it in a cost-effective manner? Quality and cost factors are determined by “quality tiering” — a comparison analysis by CMS of where you fall among your peers: Are you above average, average, or below average in your quality and cost factors? Depending on which one, your payment adjustment could go upward, downward, or be neutral.

At the moment, quality tiering analysis is optional. You can just choose for a PQRS analysis, which saves you from a negative payment adjustment for the time being. “For the 2015 value modifier, group practices with 100 or more EPs could voluntarily choose to participate in quality tiering under the value modifier…Those who did not choose quality tiering would have a neutral value modifier, which would have no impact on their payments…” CMS clarifies on its website.

However, for the 2016 value modifier, quality tiering is mandatory for groups with 10 or more EPs. Physicians in groups of 10 to 99 EPs will be subject to an upward or neutral payment adjustment, while groups of physicians with 100 or more EPs will be subject to an upward, neutral, or downward payment adjustment.

The VBPM quality composite score will be based on PQRS quality measures, “plus three additional claims-based measures that CMS will calculate,” Erickson says. “The CY 2017 cost composite will be calculated using … five total per capita cost measures and the Medicare Spending for Beneficiary (MSPB) measure.”

Option: If you’re in a group of two or more EPs, you can elect to have your patient experience measures from the Consumer Assessment of Healthcare Providers and Systems (CAHPS) PQRS survey included in your quality of care composite, Erickson points out.

A key to VBPM scoring will be based on quality resource and will use reports (QRURs), also known as Physician Feedback Reports. CMS distributed these reports in late 2014, which represented 2013 data on comparative performance.

“These QRURs contain performance information on the quality and cost measures used to calculate the quality and cost composites of the Value Modifier for CY 2015 payment adjustments,” Erickson says.

And remember, the adjustments in 2015 are only applicable for physicians in groups of 100 or more.

“ACP has been encouraging CMS to explore appropriate ways to adjust quality and cost scores for socioeconomic status and location of care to ensure accurate physician-to-physician comparison groups,” Erickson says.

How You Can Prepare

If your head is swimming with facts and numbers at this point, take a pause. Determine the size of your group, which will determine your reporting year, and go from there. Not sure where to start? Get on board with PQRS if you haven’t already. That is half your battle. Just rote participation will save you two penalties in 2017. Next, get a hold of your QRURs, see where you fall among your peers, and begin making internal improvements in your weak areas.

“Physicians should be sure to review their QRURs so that they can understand how the scoring works and be able to plan ahead,” Erickson says.

“We advise group practices to familiarize themselves with how they will be impacted by the modifier, participate in PQRS to avoid an automatic double penalty, and to learn more about the outcomes and cost measures by downloading their quality resource and use reports (QRUR),” Brennan says.

“ACP recognizes that CMS is required by law to apply the value modifier to all physicians in 2017. However, due to continuing low participation rates in PQRS among physicians and non-physician EPs, ACP strongly recommends that CMS engage in outreach to all practices to encourage them to participate in the PQRS program and work to increase PQRS participation rates,” Erickson says.

The organization is also encouraging CMS to explore educational opportunities with special societies and working with local MACs to make sure providers new to the program are aware of the quality reporting requirements.

Summed up, according to Erickson, practices, especially solo and groups with 2-9 EPs should be:

• Aware of the value based payment program;
• Aware of the alignment of the value based payment program with PQRS reporting;
• Able to understand what the value based payment program involves and how it will impact them; and
• Able to provide meaningful feedback to CMS throughout the implementation of the value based payment program.

To view the Physician Fee Schedule Rule text on the VBPM, actual rule, scroll to page 442 of this link: http://tinyurl.com/q6yx46r. For CMS’ breakdown of the VBPM program, see http://tinyurl.com/lnhq2uy.