Health Care Reform

    VALUE-BASED MODIFIER CHANGES FOR THE 2015 MEDICARE PHYSICIAN FEE SCHEDULE

    Review of Proposed Changes
    THE AFFORDABLE CARE ACT (ACA) established a value-based payment modifier that provides for differential payment to physicians based on the quality of care provided in relation to the cost of providing that care. The modifier must be budget neutral implying that a reward for high-quality care is offset by a penalty for poor-performance care as measured through alignment with the Physician Quality Reporting System (PQRS).

    The INITIAL component in the modifier determination is PQRS participation through satisfactory reporting of data on PQRS quality measures via the PQRS Group Practice Reporting Option (GRPO) (through the use of the web-interface electronic health record) or through satisfactory participation in a PQRS-qualified clinical data registry. All EP’s (eligible providers) that meet the initial reporting requirements are placed in Category 1 and Category 1 providers are then further quality-tiered for further adjustments. Those providers who do not meet Category 1 requirements fall into Category 2. Category 2 providers are only eligible for a downward payment adjustment. Quality-tiering methodology is being utilized for value determination within the initial category. Eligible providers are classified as either low quality/average cost, average quality/high cost, high quality/low cost or average quality/low cost. The value based modifier would be applied based on the tier the EP is placed in from PQRS reporting.

    In the CY 2015 Proposed Medicare Physician Fee Schedule Rule, CMS is proposing to increase the downward adjustment from -2.0 percent to -4 percent for 2017, using a data collection year of 2015. In other words, a -4.0% Value Modifier would be applied to EP’s that don’t meet quality reporting requirements for the PQRS (Category 2) or to the quality tiers classified as low quality/average cost or average quality/high cost within Category 1. However, solo providers and groups of 2 to 9 EP’s would receive only upward or neutral adjustments in 2017, given that this will be their first year under the VBM program. Groups with 10 or more EP’s would receive upward, neutral, or downward adjustments. This approach is designed to reward groups and solo practitioners that provide high quality/low-cost care, reduce program complexity, and engage groups and solo practitioners into the Value Modifier as the phase-in is completed.

    It is proposed that the Value Modifier begin in 2017 for ALL eligible providers and all physician groups including solo practitioners. A physicians’ value modifier adjustment would be based on the 2015 data collection year. This proposal would complete the phase-in of the Value Modifier that began in 2013 with the adjustment in 2015 for groups over 100 Eps and has continued to expand in subsequent years. This program is expected to involve 815,000 physicians and 315,000 non-physician providers.

    CMS is also applying the Value Modifier to physicians and non-physician providers that participate in an ACO (Accountable Care Organization) under the Medicare Shared Savings Program during the payment adjustment period. Beginning in 2017, practitioners that participate in the Pioneer ACO Model, the Comprehensive Primary Care (CPC) Initiative, or other similar Innovation Center models or CMS initiatives will also participate in the Value Modifier.

    There is a proposal also to expand the informal inquiry process for the Value Modifier starting in CY 2015. CMS will establish a “brief” period for a group or solo practitioner to request correction of a perceived error made by CMS in the determination of its Value Modifier adjustment. CMS is currently developing the necessary infrastructure to support this process. They currently propose to classify an EP as “average quality” to the extent CMS determines it has made an error in the calculation of the quality composite.

    CMS has been distributing Quality and Resource Use Reports (QRURs) for three years to physicians providing feedback regarding quality and cost-of-care furnished to Medicare beneficiaries. CMS plans to continue with this service explaining how the Value Modifier would affect a provider’s reimbursement under PFS (Physician Fee Schedule). In the summer of 2014, CMS will provide the information to all providers based on data reported in 2013. This process will continue every summer evaluating the prior years reported data so that a provider may see how he/she fares under the new policy. It is suggested that providers access their 2013 QRURs when available to improve their performance on quality and cost measures. These reports will be available via the following link in late summer of 2014.

    https://portal.cms.gov


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