All About PQRS and the Value-Based Modifier

January 16, 2015

by Emily Richardson, MD.

What is PQRS?

The Physician Quality Reporting System (PQRS) is a federal program that promotes the reporting of quality data by eligible professionals (EPs). EPs are those healthcare workers who render services under the Medicare Part B Physician Fee Schedule. PQRS metrics are physician-chosen, evidence-based measures designed to help providers assess the quality of their care. By reporting PQRS quality measures to the Centers for Medicare and Medicaid Services (CMS), providers can quantify how often they are meeting a particular quality metric. Using the feedback report provided by CMS, EPs can compare their performance on a given measure with their peers. PQRS participation status and performance scores will be publicly reported on CMS’s Physician Compare website, www.medicare.gov/physiciancompare.

Initially, the program offered financial incentives for participation in the program. However, in 2015, the program switches exclusively to payment adjustments, imposing financial penalties on EPs that fail to participate. If an eligible professional or group practice does not satisfactorily report or satisfactorily participate in the PQRS program for the 2015 reporting year, a 2% payment adjustment will apply in 2017. The adjustment (98% of the fee schedule amount that would otherwise apply to such services) applies to all covered Medicare services furnished by an eligible professional during 2017.

 

How is Data Reported?

The most common method for reporting PQRS data codes has been via the claims-based method.  However, reporting through claims will become increasingly difficult and costly as the requirements for successful reporting become more stringent (see below).  CMS will phase out claims-based reporting in favor of reporting through Qualified Clinical Data Registries (QCDR) over the next 5 years. This will move responsibility for measure development, data collection and reporting from CMS to the specialty society registries. An example of a QCDR is the National Anesthesia Clinical Outcomes Registry (NACOR) housed through AQI.

 

 

Individual EPs may currently choose to report through one of the following methods:

  • Medicare Part B Claims
    • Report on at least 9 measures covering 3 National Quality Standard (NQS) domains and report each measure for at least 50% of applicable Medicare patients.
    • If fewer than nine measures or if less than three NQS domains are reported via claims, CMS will apply a measure-applicability validation (MAV) process when determining incentive eligibility.
    • If the EP has at least one face-to-face encounter with a Medicare patient, they must also report one cross-cutting measure (see 2015 Cross-Cutting Measures list). *Note: This is a new reporting criterion which has been added for the claims-based reporting option for 2015.
  • Qualified Clinical Data Registry (QCDR), e.g. the Anesthesia Quality Institute’s NACOR.
    • Report on at least 9 measures covering 3 NQS domains for at least 50% of all applicable patients, regardless of insurer, and include at least 2 outcome measures.
  • Direct Electronic Health Record (See www.cms.gov for more information on this option).
  • Qualified PQRS Registry (Note: this is also known as a Traditional Registry and is not the same as a QCDR).
    • Report on at least 9 measures covering 3 National Quality Standard (NQS) domains and report each measure for at least 50% of applicable patients.
    • If fewer than nine measures or if less than three NQS domains are reported qualified registry, CMS will apply a measure-applicability validation (MAV) process when determining incentive eligibility.
    • If the EP has at least one face-to-face encounter with a Medicare patient, they must also report one cross-cutting measure (see 2015 Cross-Cutting Measures list). *Note: This is a new reporting criterion which has been added for the traditional registry-based reporting option for 2015.

 

Group practices participating in the Group Practice Reporting Option (GPRO) may report through one of the following methods:

  • Web interface (for groups of 25+ EPs only)
  • Qualified PQRS Registry
  • Direct Electronic Health record
  • Data Submission Vendor
  • CG-CAHPS CMS-certified survey vendor (for groups of 25+ EPs only)

 

What is the bottom line?

If an eligible professional or group practice does not satisfactorily report or satisfactorily participate in the PQRS program for the 2015 reporting year, a 2% payment adjustment will apply in 2017.  Medicare’s Value-Based Payment Modifier (VBM) program is based on successful participation in the PQRS program. Payment adjustments for the PQRS and VBM programs are separate and additive. Failure to participate in the PQRS program in 2015 will result in a cumulative adjustment of -4% to -6% in 2017 depending on group size.  Please see refer to the Value-Based Payment Modifier information below or visit www.cms.gov for more information.

 

For more information about PQRS, visit: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html?redirect=/PQRS/

Value-Based Payment Modifier

The Affordable Care Act has mandated that, by 2015, the Centers for Medicare and Medicaid Services (CMS) will apply a value-based modifier (VBM) under the Medicare Physician Fee Schedule (PFS) to eligible providers (EPs). Cost and quality data are to be included in calculating payments to physicians. Physicians in group practices of 100+ eligible professionals (EPs) will be subject to the value modifier in 2015 based on their performance in calendar year 2013. Physicians in group practices of ten or more eligible professionals (EPs) will be subject to the value modifier in 2016, based on their performance in calendar year 2014. All physicians who participate in Medicare PFS will be affected starting in 2017.

The Value Modifier provides for differential payment to a physician or group of physicians based upon the quality of care furnished compared to cost of providing that care (Value = Quality divided by Cost).

Payment adjustment for nonparticipation is -4% of Medicare allowable charges for groups with ten or more EPs and -2% for groups of one to nine EPs.  CMS’s overall approach to implementing the VBM is based on participation in the Physician Quality Reporting System (PQRS).  Payment adjustments for the PQRS and VBM programs are separate and additive.  Failure to participate in the PQRS program in 2015 will result in a cumulative adjustment of -4% to -6% in 2017 depending on group size.

Groups which successfully report PQRS measures will be subject to quality-tiering.  Quality-tiering is the methodology that is used to evaluate a group’s performance on cost and quality measures for the Value Modifier.  Groups could receive an upward, neutral, or downward adjustment to Medicare PFS payments in 2017 based on their performance on quality and cost measures in 2015 (see figure 1).  Quality scores will be a composite of measure of the six domains of quality (see figure 2).  Cost will be determined by total per capita cost and total costs for beneficiaries with specific conditions.

Figure 1

 

figure 1 

*In order to maintain budget neutrality, CMS will first aggregate the downward payment adjustments in the above table with the -4% adjustments for groups of physicians subject to the VBM.  Using the total downward payment adjustment amount, CMS will then solve for the upward payment adjustment payment factor (x).

Figure 2

figure 2

Relationship between Quality of Care and Cost Composites and the Value Modifier

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Emily Richardson, MD is EMP’s Chief Quality Officer.

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