Value-based payments a new source of reimbursement, penalties

In an effort to move toward physician reimbursement that rewards value rather than volume, the Centers for Medicare and Medicaid Services (CMS) developed the value-based payment (VBP) program, which will adjust physician payments according to performance. There are concrete actions that a practice can take to recoup more reimbursement and avoid the penalties of not participating.

The VBP program (see Table) is mandated by the Affordable Care Act (ACA) and intends to provide comparative performance information to physicians as part of Medicare's efforts to improve the quality and efficiency of medical care. This program links physician performance in quality and cost with Medicare Part B payments covering services such as laboratory tests, surgeries and physician visits.

As this new program is in the first stage of implementation, there are aspects of the program that are important to understand.

Q: What does the VBP program consist of?

A: The VBP program contains two primary components:

Quality and Resource Use Reports (QRURs), also known as Physician Feedback Reports, are confidential reports provided to physicians about the quality and costs of care provided to fee-for-service Medicare patients during the performance period.

The Value-Based Payment Modifier (VBPM) will soon be applied by CMS to physicians in all groups of 100 or more eligible professionals (as defined by CMS) starting in 2015 and based on data from 2013. The VBPM will be calculated based on Physician Quality Reporting System (PQRS) participation and applied as a percentage to the Medicare paid amounts for the items and services billed under the Physician Fee Schedule at the tax identification number (TIN) level.

The program includes an opt-in quality-tiering payment adjustment for those who have reported PQRS measures. The scoring methodology for the VBPM will assess the quality of care furnished compared to the cost during the performance period (2013) to calculate an adjustment to payments under the Physician Fee Schedule during the payment adjustment period (2015).

Q: How will the VBPM be applied to physician practices?

A: In an effort to align with the PQRS, CMS will separate all groups with 100 or more eligible professionals into two categories based on PQRS participation.

The first category includes groups of physicians that self-nominated for PQRS as a group and reported at least one measure or have elected the PQRS administrative claims reporting option for 2013. Groups in this category include those that have satisfactorily met the reporting criteria for the PQRS incentive payment. This category's VBPM will be set at 0% (no increase or penalty) in 2015.

Within this category, CMS is offering practices an option to calculate the VBPM using a quality-tiering approach, which allows groups of physicians to elect to earn an upward payment adjustment for high performance (high-quality/low-cost tier) and risk a downward payment adjustment for poor performance (low-quality/high-cost tier).

The second category includes groups of physicians that did not participate in PQRS in 2013, such as those that did not self-nominate to participate in the PQRS Group Practice Reporting Option (GPRO) and did not report at least one measure. This category's VBPM will be reduced by 1% in 2015. There is another 1.5% reimbursement reduction assessed under the ACA for failing to satisfactorily meet the reporting criteria for PQRS.

Q: What does my practice need to do?

A: 1. Update information in PECOS. CMS will use the Medicare Provider Enrollment, Chain and Ownership System (PECOS) database to determine practice size (e.g., 100 eligible professionals) for the 2015 VBP based on 2013 practice size. Practices should ensure that their information is up-to-date in the PECOS system.

2. Participate in PQRS. ACP encourages physicians to participate in PQRS in 2013 to avoid the PQRS penalty and the VBPM penalty in 2015. Physician groups must register and participate in PQRS as a group to avoid a 1% payment reduction in 2015 under the VBP program. Groups must also choose to elect into quality-tiering (which is voluntary) by Oct. 15, 2013. For more information on how to successfully participate in PQRS and the VBP program, visit ACP online.

3. Review the QRURs and provide feedback to ACP. In fall 2013, all groups of 25 or more eligible professionals will receive a QRUR with their tier assignment based on 2012 data. Review these reports to estimate where your practice falls under quality-tiering and identify areas that may positively or negatively affect your reimbursement in the future. Groups can use this information to make changes in the delivery of services to improve their practice.

CMS is continuing to improve these reports to ensure that they are meaningful and actionable to physicians. ACP supports this program and would like to provide CMS with meaningful feedback on the reports to improve the program and help to make it a success. Please send feedback to ACP or directly to CMS.

For more information on the VBP program, please visit online.