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Volume 10, Issue 1 Download for iPad

THE VALUE BASED PAYMENT MODEL

Well before the passage of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) put into place the groundwork for moving the physician payment model from a fee-for-service (FFS) payment methodology to a new value-based payment (VBP) model that would incorporate payment for quality. We will begin this issue with a brief review of the legislature that mandated the quality programs implemented by CMS.

REVIEW OF LEGISLATURE AND MEDICARE'S PAY-FOR-REPORTING PROGRAMS

The first step in the movement to a Value Based Payment (VBP) model was the development and implementation of voluntary pay-for-reporting programs.

The Tax Relief and Health Care Act of 2006 (TRHCA) authorized and established provisions for bonus payments for the submission of quality measures. On July 1, 2007, CMS established the Physician Quality Reporting Initiative (PQRI), a pay for reporting program that provided a financial incentive to eligible providers (EPs) who met the quality-reporting threshold.

CMS first introduced the PQRI as a voluntary program that allowed providers to earn a 1.5% incentive payment for successfully reporting on certain quality measures regardless of whether or not the provider met the quality measure reported on. The bonus payment was in addition to Medicare's regular FFS payment on services paid under the Medicare Physician Fee Schedule (MPFS).

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) made the PQRI program permanent and authorized incentive payments through 2010.The PQRI program was renamed the Physician Quality Reporting System (PQRS), and 2014 was the last year an EP could earn an incentive payment under the PQRS.

The ACA mandated, among other changes, the establishment of PQRS penalties beginning in 2015 for EPs that did not participate in or were unsuccessful PQRS reporters. The 1.5% 2015 penalty is based on 2013 performance, and the 2014 Medicare Physician Final Rule established that the 2016 PQRS penalty (based on the EP's 2014 performance) would increase to 2%.

The Electronic Health Record (EHR) incentive program, which was established under the American Recovery and Reinvestment Act (ARRA) and signed into law on February 17, 2009, provides financial incentives for Health Information Technology (HIT) adoption by health care professionals participating in Medicare and Medicaid programs. To qualify for the EHR Meaningful Use incentive payment eligible providers must make "meaningful use" of HIT, and must use a qualified or certified electronic health record. Although the EHR incentive program is separate from the PQRS some of the PQRS measures are also meaningful use clinical quality measures (CQMs).

Medicare's Electronic Prescribing (eRx) Incentive Program was another voluntary pay-for-reporting program. The eRx program was designed to encourage providers to use electronic prescribing to improve communication, increase accuracy and reduce errors. The eRx program consisted of a combination of incentive payments and penalties to encourage electronic prescribing by EPs. The eRx program ended in 2013 but electronic prescribing is a requirement under the EHR Meaningful Use program.

TRANSITION TO PAY-FOR-PERFORMANCE: THE VALUE-BASED PAYMENT MODIFIER

The Physician Feedback Program/Value-Based Payment Modifier is a pay-for-performance program specific to FFS Medicare that provides for differential payment under the MPFS based on the quality of care furnished compared to the cost of care during a performance period.

The Physician Feedback reporting was mandated through the MIPPA and expanded by the ACA of 2010. The ACA directed CMS to provide information to physicians and group practices about the resources used and quality of care provided to their Medicare Fee-For-Service patients, including measurement and comparisons of patterns of resource use and cost among physicians and medical practice groups.

Section 3007 of the ACA mandated that, the Value Modifier (VM) be applied to specific physicians and groups of physicians starting January 1, 2015, and to all physicians and groups of physicians by January 1, 2017. The VM provides a payment differential to providers based on the quality and cost of care provided and it applies to both participating and non-participating physicians.

The Value Modifier is an adjustment made on a per claim basis to Medicare payments for items and services paid under the MPFS. The payment adjustment is applied at the Taxpayer Identification Number (TIN). The goal of the VM is to shift the Medicare payment system to reward quality and lowering costs, in other words a shift from volume to value.

As illustrated in Figure 1, there are two components to the VM program: an automatic penalty for eligible professionals (EPs) that do not successfully report PQRS and a quality tiering methodology through which providers may earn a neutral, upward or downward payment adjustment based on their quality and cost performance.

Figure 1

Figure 1: www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/2014-12-02-Presentation.pdf

AVOIDING VALUE MODIFIER PENALTIES IN 2017

Component #1: Automatic Penalty

The CMS language clearly states that the VM applies to all physicians beginning in 2017, but what has been overlooked by some practices is that the performance period for the 2017 VM is 2015. The automatic VM adjustment is based on PQRS participation, so physicians and group practices that are not successful PQRS reporters this year (2015) will be subject to the PQRS negative payment adjustment of -2% as well as the automatic VM negative payment adjustment (-2% for physician groups with between 2-9 EPs and solo practitioners, and -4% for physician groups with 10 or more EPs) in 2017.

Because calendar year (CY) 2015 is the performance period for the Value Modifier that will be applied in CY 2017, eligible professionals (EPs) in groups and solo practitioners must participate in the PQRS this year to avoid an automatic negative payment adjustment and to be eligible for upward, downward or neutral payment adjustments under the VM quality-tiering methodology.

Physician groups with 2 or more EPs have the option of participating in the PQRS in 2015 as a group or as individuals. Physician solo practitioners have to participate in the PQRS as individuals.

Physician groups wishing to participate as a group through the GPRO Web Interface (a secure internet-based application) must register for this option and report through one of the following reporting options:

However, as the 2015 registration period for the PQRS Group Practice Reporting Option (GPRO) closed on June 30, 2015, group practices that did not register will need to participate in the PQRS as individuals in 2015.

When a group practice participates in the PQRS as individuals in CY 2015 at least 50% of the EPs in the group must meet the satisfactory reporting criteria as individuals (or satisfactorily participate in a Qualified Clinical Data Registry) to avoid the "-2.0%" CY 2017 PQRS payment adjustment and the automatic negative payment adjustment under the VM program.

Physician solo practitioners and groups that choose to participate in the PQRS as individuals do not need to register and can report through one of the following four methods:

  • Medicare Part B Claims
  • Qualified PQRS Registry
  • Electronic Health Record (EHR)
    • EHR direct product that is Certified Electronic Health Record Technology (CEHRT)
    • EHR data submission vendor (DSV) that is CEHRT)
  • Qualified Clinical Data Registry (QCDR)

Physician solo practitioners can avoid the automatic "-2.0%" Value Modifier payment adjustment in CY 2017, if the solo practitioner participates in the PQRS as an individual in CY 2015 and meets the satisfactory reporting criteria as an individual (or in lieu of satisfactory reporting, satisfactorily participate in a Qualified Clinical Data Registry) to avoid the "-2.0%" CY 2017 PQRS payment adjustment.

CMS has published very detailed information on each of the reporting options for CY 2015, including the steps for utilizing the method of reporting, reporting criteria and resources:

For complete information on how to avoid the automatic CY 2017 negative payment adjustment carefully review the following document:
Action for Physician Groups with 2 or More Eligible Professionals and Physician Solo Practitioners to Take In CY 2015 in Order To Earn an Incentive Based; Performance and Avoid the Automatic CY 2017 Downward Payment Adjustment under the Value Modifier.

Component #2: Quality-tiering

Quality-tiering is the second component of the VM program. In 2017, all Medicare Part B fee-for-service physicians will be subject to VM adjustments using a quality composite score and a cost composite score based on their performance in CY 2015.

Under the quality-tiering component, CMS looks at the quality and cost of care furnished to Medicare beneficiaries and adjusts the physician's payment based on Medicare's Quality and Resource Use Reports (QRURs). The quality measures include the CMS calculated quality outcome measures and PQRS quality measures. Cost measures include the per capita costs for all attributed beneficiaries and the per capita costs for beneficiaries with certain specific conditions.

In 2017, (based on 2015 performance) the maximum downward adjustment under the quality-tiering methodology for groups with ten or more EPs will increase to -4.0 percent for EPs classified as low quality/high cost and -2.0 percent for groups classified as either low quality/average cost or average quality/high cost.

CMS also increased the maximum upward adjustment under the quality-tiering methodology in the CY 2017 payment adjustment period to +4.0x for groups of ten or more EPs classified as high quality/low cost and set the adjustment to +2.0x for groups of ten or more EPs classified as either average quality/low cost or high quality/average cost. 

2017 VM Quality Tiering Amounts
Groups with 10+ EPs

Cost/Quality

Low Quality

Average Quality

High Quality

Low Cost

+0.0%

+2.0x*

+4.0x*

Average Cost

-2.0%

+0.0%

+2.0x*

High Cost

-4.0%

-2.0%

+0.0%

* Eligible for an additional +1.0x if reporting measures and average beneficiary risk score is
in the top 25 percent of all beneficiary risk scores

Figure 2: Source: What To Do in 2015 For The 2017 Value Modifier.

Groups of two to nine EPs and solo practitioners will be held harmless from downward adjustments under the quality-tiering methodology for the CY 2017 payment adjustment period.

The CY 2017 upward payment adjustment for groups of two to nine EPs and solo practitioners will be +2.0x for those EP's classified as high quality/low cost and +1.0x for those EPs classified as either average quality/low cost or high quality/average cost.

2017 VM Quality Tiering Amounts
Groups of 2-9 EPs & Solo Practitioners

Cost/Quality

Low Quality

Average Quality

High Quality

Low Cost

+0.0%

+1.0x*

+2.0x*

Average Cost

+0.0%

+0.0%

+1.0x*

High Cost

+0.0%

+0.0%

+0.0%

* Eligible for an additional +1.0x if reporting measures and average beneficiary risk score is
in the top 25 percent of all beneficiary risk scores

Figure 3: Source: What To Do in 2015 For The 2017 Value Modifier.

In figures 2 and 3, 'x' represents the upward payment adjustment factor based on budget neutrality. Under budget neutrality any positive payment adjustments made must be offset by negative payment adjustments.

Putting It All Together

As is the case with the PQRS, there is a two-year lag between the VM performance year and the payment impact year, CY 2015 is the performance year for the 2017 VM payment adjustment. The VM is applied at the Taxpayer Identification Number (TIN) level and applies to all physician groups and solo practitioners billing under the TIN.

The VM is aligned with the reporting requirements under the PQRS. Groups and solo practitioners that are not successful PQRS reporters in 2015 will be subject to the automatic VM penalty in 2017. In order to successfully report on PQRS in 2015, a group must report on at least nine measures covering three of the six domains of the National Quality Strategy:

  • Care Coordination
  • Patient Safety
  • Efficiency
  • Patient and Family Engagement
  • Clinical Process/ Effectiveness
  • Community/Population Health

Successful PQRS reporters will avoid the automatic VM penalty and will move on to the mandatory quality tiering analysis. Under the quality tiering analysis each TIN receives two composite scores; a quality and cost score. CMS will then classify each score as "high" "average" or "low" and assigns the TIN to the respective quality and cost tiers to determine a positive, neutral or negative payment adjustment.

The TIN's performance on the reported PQRS quality measures will be benchmarked against overall national performance in the previous year. For this reason, it will be very important that you choose quality measures that you perform well on.

Cost measures will be automatically attributed to the TINs based on claims data compiled during the performance year. Currently, there are two equally weighted measures that comprise the cost composite score:

  • Per capita costs (total cost of care) for all attributed beneficiaries.
  • Per capita costs for those attributed beneficiaries with certain chronic conditions (diabetes, coronary artery disease, chronic obstructive pulmonary disease, and heart failure).

The Annual QRUR is the final summary report on performance on quality and cost measures and reports the Value Modifier that will apply the payment adjustment based on the group's or solo provider's quality and cost performance as compared to their peers. The QRURs apply at the TIN level therefore individual reports will not be sent to physicians.

In Figure 4, CMS illustrates the six domains of the quality of care composite and the two domains of the cost composite and how they relate to the Value Modifier.

Figure 4

Figure 4: Relationship between Quality of Care and Cost Composites and the Value Modifier

UNDERSTANDING QUALITY AND RESOURCE USE REPORTS (QRURs)

For calendar year 2014, CMS will generate three types of QRURs: The Mid-Year QRUR (MYQRUR), that was made available in April 2015 and is based on care provided from July 1, 2013 through June 30, 2014 and the Annual QRUR and Supplemental QRURs which will be disseminated in Fall 2015.

The Mid-Year QRUR is disseminated each spring and provides interim information about performance on only those quality outcome and cost measures that CMS calculates directly from Medicare administrative claims, based on the most recent 12 months of data that are available. These reports are intended to help groups and solo practitioners understand and improve the quality and efficiency of care provided to Medicare beneficiaries and to inform them about their performance on measures that will be included in the Value Modifier. These reports do not affect MPFS payments and are not a predictor of future values-based performance.

The Annual QRUR, disseminated each fall, serves as the final summary report on performance on quality and cost measures and reports the Value Modifier that will apply an upward, neutral or downward payment adjustment based on the group's or solo provider's quality and cost performance as compared to their peers.

The Supplemental QRURs are confidential reports that provide information on the management of the practitioner's fee-for-service (FFS) beneficiaries based on episodes of care and are currently generated for informational purposes only.

Figure 5 is a CMS example of a QRUR report that provides feedback on the quality, and cost of care furnished to Medicare beneficiaries as well as the payment adjustment that would be applied to the physician's payments made under the Medicare Physician Fee Schedule (MPFS). It is important to note that drugs and labs are not paid under the MPFS and therefore are not subject to the payment differential under Medicare's quality-tiering.

The QRUR provides information on the physician group's quality and cost performance, which would be used to calculate the group's value-based payment modifier for MPFS reimbursements. The QRUR includes the group's quality composite score and cost composite score which together determines the group's performance score.

In the example QRUR for the sample medical practice (Figure 5) the group only met the last two high-risk bonus adjustment criteria in 2013 and are therefore not eligible for the high-risk bonus adjustment. The report shows that the group's quality and cost composite scores were both average and they therefore would receive a +0.0% payment adjustment in 2015.

Figure 5

Figure 5: Sample QRUR

HOW MEDICARE BENEFICIARIES ARE ASSIGNED TO A TIN

CMS uses a two-step attribution process to associate beneficiaries with TINs during the year performance is assessed. This process assigns a beneficiary to the TIN that provides more primary care services to that beneficiary than any other TIN. The attribution methodology determines which beneficiaries are included in the calculation of each TIN's quality and cost performance and payment adjustment under the Value Modifier.

CMS outlines this process for the 2015 and 2016 Value Modifiers:

Step 1: A beneficiary is attributed to a TIN if the TIN's primary care physicians (PCPs) defined as family practice, internal medicine, geriatric medicine, or general practice physicians accounted for a larger share of allowed charges for primary care services for the beneficiary than PCPs of any other TIN. Primary care services include evaluation and management services provided in office and other non-inpatient and non-emergency room settings, as well as initial Medicare visits and annual wellness visits. If two TINs tie for the largest share of a beneficiary's primary care services, the beneficiary is assigned to the TIN that provided primary care services most recently.

Step 2: Beneficiaries who are not assigned to a TIN after the first step (because they did not receive any eligible primary care services from a PCP) and received at least one primary care service from a physician, regardless of specialty, are assigned to the TIN whose physician specialists, nurse practitioners (NPs), physician assistants (PAs), and clinical nurse specialists (CNSs) accounted for more Medicare allowed charges for primary care services than any other TIN.

CMS has finalized a change to this attribution methodology for the 2015 QRURs and the 2017 Value Modifier. Specifically, NPs, PAs, and CNSs will be included in the first step of attribution and CMS will no longer require that a beneficiary receive primary care services from a physician, in order to be attributed to a TIN. As a result of this change, a beneficiary would be attributed to a TIN in the first step of attribution if the TIN's PCPs, NPs, PAs, and CNSs account for a larger share of allowed charges for primary care services for the beneficiary than those specialties at any other TIN.

ADJUSTMENTS UNDER THE VALUE-MODIFIER PROGRAM

There are two categories of adjustments to measures included in the QRUR and Value Modifier calculations: risk adjustment and specialty adjustment.

Risk Adjustment

Risk adjustment is performed at the beneficiary level and is applied to certain cost and quality measures in order to facilitate more accurate comparisons by accounting for differences in beneficiary populations. Without risk adjustment, those TINs that treat a large number of Medicare beneficiaries who have multiple chronic conditions would likely perform worse on certain quality and cost measures than TINs with healthier beneficiaries.

The CMS Risk Adjustment Fact Sheet dated April 2015 provides detailed information on risk adjustment and lists the following measures as risk adjusted prior to their inclusion in the QRURs and Value Modifier calculations:

  • 30-day All-Cause Hospital Readmission measure
  • Acute and Chronic ACSC Composite measures
  • Per Capita Costs for All Attributed Beneficiaries and Per Capita Costs for Beneficiaries with Specific Conditions measures
  • Medicare Spending per Beneficiary (MSPB) measure
  • Consumer Assessment of Healthcare Providers & Systems (CAHPS) for Physician Quality Reporting System (PQRS) measures

Specialty Adjustment

The specialty adjustment is performed at the TIN level and takes into account that costs vary across specialties and across TINs with varying specialty mixes. CMS applies specialty adjustment separately to the Per Capita Costs for All Attributed Beneficiaries, Per Capita Costs for Beneficiaries with Specific Conditions, and the Medicare Spending per Beneficiary measures.

Specialty adjustment is accomplished by determining the risk-adjusted cost that would be expected for a solo practitioner, given the practitioner's specialty, or TIN, given the TIN's specialty mix, and comparing this expected value to the actual risk-adjusted cost.

CMS outlines the steps used to calculate the specialty adjustment in the Specialty Adjustment Fact Sheet dated April 2015:

Step 1: Calculate a national average per capita cost for each specialty. This national specialty- specific expected cost is the weighted average of each TIN's payment-standardized and risk- adjusted costs. The weights reflect the number of beneficiaries attributed to each TIN, as well as the number and share of practitioners of the relevant specialty in each TIN.

Step 2: Estimate the average cost for a TIN of a particular specialty mix based on the national average costs for every specialty represented in the TIN. This is referred to as the specialty- adjusted expected cost.

Step 3: Compare the specialty-adjusted expected cost for each TIN to its actual payment- standardized and risk-adjusted cost. This specialty-adjusted expected cost is then compared against the cost benchmark- the national average of all TINs regardless of size-to determine the TIN's cost performance for the 2016 Value Modifier.

ACCESSING YOUR QRURs

Beginning on July 13, 2015, an Individuals Authorized Access to CMS Computer Services (IACS) account can no longer be used to access QRURs. Instead, providers will need to access their QRURs through the CMS Enterprise Identity Management System (EIDM). CMS provides the following instructions for setting up an EIDM account to access QRURs for groups and solo practitioners:
Setting up an EIDM account to access a group's QRUR
  • A group is defined as a TIN with 2 or more eligible professionals (EPs), as identified by their National Provider Identifier (NPI), that bill under the TIN.
  • To access a group's QRUR, one person from the group must first sign up for an EIDM account with the Security Official role.
  • If additional persons are needed to access the group's QRUR, then they can also request the Security Official role or the Group Representative role in EIDM.
  • If you do not have an IACS or EIDM account, then follow the instructions provided here to sign up for an EIDM account with the correct role.
  • If you have an IACS account that you previously used to access QRURs or register for the PQRS GPRO, then follow the instructions provided here to sign up for an EIDM account. You will be allowed to perform the same tasks using your EIDM account that you were able to perform with your IACS account. 
  • If you already have an EIDM account, then follow the instructions provided here to sign up for the correct role in EIDM.

 

Setting up an EIDM account to access a solo practitioner's QRUR
  • A solo practitioner is defined as a TIN with only 1 EP, as identified by a NPI, that bill under the TIN.
  • To access a solo practitioner's QRUR, one person must first sign up for an EIDM account with the Individual Practitioner role.
  • If additional persons are needed to access the solo practitioner's QRUR, then they can also request the Individual Practitioner role or the Individual Practitioner Representative role in EIDM.
  • If you do not have an IACS or EIDM account, then follow the instructions provided here to sign up for an EIDM account with the correct role.
  • If you have an IACS account that you previously used to access QRURs, then follow the instructions provided here to sign up for an EIDM account. You will be allowed to perform the same tasks using your EIDM account that you were able to perform with your IACS account. 
  • If you already have an EIDM account, then follow the instructions provided here to sign up for the correct role in EIDM.

For more information on how to register for a User ID and password, download the CMS Enterprise Identity Management (EIDM) User Guide:
www.cms.gov/Research-Statistics-Data-and-Systems/CMS-Information-Technology/IACS/Downloads/IACS-EIDM-Migration-User-Guide.pdf

Technical Assistance:

For questions about setting up an EIDM account contact the QualityNet Help Desk:

For questions about the contents of the QRUR contact the Physician Value Help Desk:

  • Phone: 1 (888) 734-6433, press option 3

Published by Rise Marie Cleland. Sponsored by Lilly Oncology

CONTACT US
Risë Marie Cleland Rise@Oplinc.com

Oplinc, Inc.
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360.695.1608 office
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Rise@Oplinc.com

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Comments and suggestions for future issues are welcome, please forward correspondence to Risë Marie Cleland by email at: Rise@Oplinc.com

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ABOUT THE EDITOR
Risë Marie Cleland is the Founder and CEO of Oplinc, Inc., a national organization of oncology professionals. Through Oplinc, Inc., Ms. Cleland publishes the weekly Oplinc Fast Facts focusing on the timely dissemination of information pertaining to billing, reimbursement and practice management in the oncology office and Oplinc’s Best Practices Review, which provides a more in-depth look at the issues and challenges facing oncology practices. Ms. Cleland also works as a consultant and advisor for physician practices, pharmaceutical companies and distributors.

IMPORTANT NOTICES
Please note that this newsletter is presented for informational purposes only. It is not intended to provide coding, billing or legal advice. Regulations and policies concerning Medicare reimbursement are a rapidly changing area of the law. While we have made every effort to be current as of the issue date, the information may not be as current or comprehensive when you review it. Please consult with your legal counsel for any specific reimbursement information. For Medicare regulations visit: www.cms.gov.

CPT® is a Trademark of the American Medical Association Current Procedural Terminology (CPT) is copyright 2015 American Medical Association. All Rights Reserved. No fee schedules, basic units, relative values, or related listings are included in CPT. The AMA assumes no liability for the data contained herein.

Copyright ©2015 Oplinc, Inc.

Oplinc, Inc., grants permission to distribute this newsletter without prior permission provided it is forwarded unedited and in its entirety.

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