In a Notice of Proposed Rulemaking (NPRM) released on July 6, 2012, the Centers for Medicare and Medicaid Services (CMS) rolled out a plan for phasing in the physician Value-Based Modifier (VBM) payment program. Mandated by the Affordable Care Act, the VBM will compensate physicians differentially based upon a composition of quality—defined by clinical quality measure reporting—and costs. Intended to be Medicare budget-neutral, this step in payment reform will result in some providers experiencing an increase in reimbursement for performing high quality at a low cost, while others will see a decrease for failing to hit the performance guidelines.
The NPRM established that physician performance will be measured by clinical data reported through the Physician Quality Reporting System (PQRS) between 2015 and 2017. The proposed rule also further aligns Meaningful Use clinical quality measure reporting with EHR Direct PQRS. This will help ease the burden on physicians and make it easier to participate in both PQRS and one of the EHR Incentive Programs.
The VBM will represent -1 percent in CY2015 for groups of more than 25 physicians that do not participate in PQRS in CY2013, which is the performance period for the initial VBM. Provider performance during this time period will be used to compute the VBM for supplies and services furnished under the Medicare Part B Physician Fee Schedule (MPFS). Provider groups participating in PQRS would fall into one of two tiers. The first tier would include high-performing providers—those who deliver high-quality services at low costs. Providers in this tier would have the potential for an upward VBM adjustment. The second tier would include lower-performing providers with low quality scores and high costs. Providers in this tier may be subject to a VBM adjustment of negative 1 percent, which is the same as the penalty for failure to participate.
In addition to determining differential pay, provider performance data will be shared with the public online. Data used to create the modifier will be posted to the CMS Physician Compare website so the public can view and compare quality scores of physicians. Providers who participate in EHR-based PQRS reporting will be in the strongest position for success as the U.S. transitions into this new reimbursement model and public transparency on performance.
While claims-based and registry-based PQRS reporting will be accepted, both are known to have data integrity issues. Claims-based reporting not only delivers limited data, it can be impeded from barriers such as rejected claims or system configuration. Registry-based PQRS reporting was noted to be "too narrow" to meet the CMS goals under the Final Rule for Stage 1 Meaningful use. The Final Rule governing Medicare payment policies issued by CMS in November, 2011 further amplifies the issues linked to registry reporting and seeks remedies by stating:
"We are aware of many of the issues registries encounter during the collection of data they receive from eligible professionals for whom they provide services. ... As we move towards implementing the Value-Based Modifier, the collection of accurate data will become increasingly important. We anticipate adopting in future rulemaking the option of disqualifying a registry from future PQRS reporting if their data is inaccurate for future years of the program."
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