Value-Based Modifiers

    The value-based modifier was mandated by Congress under the Affordable Care Act to reimburse or penalize payments from Centers for Medicare & Medicaid Services (CMS) based on cost and quality of healthcare delivered. The CMS has approved applying the value-based payment modifier to all physicians practicing in medical groups with 100 or more practitioners starting in 2013. Large practices (over 100 physicians) must report quality measures under the Physician Quality Reporting System (PQRS) in 2013 to avoid penalty from the value-based modifier being applied for 2015. 

    The value-based modifier will adjust 2015 Medicare payment rates through a scoring system that could raise pay by as much as 2% or cut it by as much as 1%. Those caring for sicker patients who score high enough also could receive an extra 1% boost. Large practices that fail to meet PQRS requirements automatically would receive the full 1% cut.


    Low cost

        Average cost

          High cost

    High quality




    Average quality   




    Low quality




    * Physicians who score in these categories who treat high-risk beneficiaries could receive an additional one percentage point in bonus money.

    Source: Proposed 2013 physician fee schedule, Centers for Medicare & Medicaid Services, Federal Register, July 30 (

    Large practices that successfully participate in the Medicare PQRS either can accept a 0% pay adjustment or vie for higher adjustments by accepting risk under a tiered modifier structure. Physicians assigned to a high-quality, low-cost category could receive bonuses of up to 2% in 2015. Group practices vying for bonuses must accept the risk that their scores could end up qualifying them for payment penalties of up to 1%. 

    Are you in a group practice affected by the value-based modifier in 2015 based on 2013 data?
    Group practices are defined by their unique tax-identification number (TIN). Once a group practice is identified, this is the only method of Physician Quality Reporting available to both the group TIN and all unique national provider identifiers (NPIs) of all providers who bill Medicare under the group’s TIN. 

    Start reporting as soon as possible! Penalties for non-reporting are coming soon
    Many physicians are unaware of the value-based modifiers program’s requirements for group-practices (over 100 physicians) and that the reporting period officially began Jan. 1, 2013. Calendar Year 2013 has been finalized as the performance period for the 2015 PQRS penalties.  This means providers who have not satisfactorily report in 2013 could have up to an additional  -1.0% payment penalty for services provided in 2015 due to the value based modifier.  

    What if you practice in a smaller practice?  Stay informed.
    Although the proposed CMS plan initially excluded solo and small physician practices (under 100 physicians), the modifier may be applied universally to all physicians treating Medicare patients starting in 2017. Doctors in practices of all sizes face potential rate decreases of up to a total of 2.5% in 2015, for example, for failing to comply with the electronic health records initiative (meaningful use) and PQRS.

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