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Value-Based Payment Modifier

Section 3007 of the Affordable Care Act mandated that, by 2015, CMS begin applying a value modifier under the Medicare Physician Fee Schedule (MPFS). Both cost and quality data are to be included in calculating payments for physicians.

  • Physicians in group practices of 100 or more eligible professionals (EPs) who submit claims to Medicare under a single tax identification number (TIN) will be subject to the value modifier in 2015, based on their performance in calendar year 2013.
  • Physicians in group practices of 10 or more EPs who participate in Fee-For Service Medicare under a single TIN will be subject to the value modifier in 2016, based on their performance in calendar year 2014.
    • For 2015 and 2016, the Value Modifier does not apply to groups of physicians in which any of the group practice’s physicians participate in the Medicare Shared Savings Program, Pioneer ACOs, or the Comprehensive Primary Care Initiative.
  • All physicians who participate in Fee-For-Service Medicare will be affected by the value modifier starting in 2017.

Quality Resource and Use Reports (QRURs)

The QRURs will preview information about a groups’ quality and cost performance rates for the VM starting with the 2012 QRURs. In September 2013, CMS made available QRURs, based on care provided in 2012, to group practices that had at least 25 eligible professionals. The 2012 QRURs contain quality of care and cost performance rates on measures that will be used to compute the value based payment modifier. The 2012 QRUR also show how a group’s payments would be affected if the group elected the quality tiering option.

In late summer 2014, CMS will make available QRURs based on care provided in 2013 to all groups and solo practitioners. The 2013 QRURs will display a group practice’s quality and cost composite scores which are used to calculate the VM. For group practices of 100 or more EPs that elected quality tiering, the 2013 QRUR will display the groups 2015 value modifier payment adjustment

Value-based Payment Modifier

In 2015, physicians in groups of 100 or more EPs who submit claims to Medicare under a single TIN will be subject to the value modifier, based on their performance in calendar year 2013. In 2013, these groups needed to self-nominate/register and choose one of three PQRS group reporting methods available in 2013: the web-interface group reporting option, a registry, or request that CMS calculate the group’s performance on quality measures from administrative claims, in order to avoid an automatic negative1% value modifier adjustment to 2015 payment under the Medicare Physician Fee Schedule. Groups of 100 or more EPs who self-nominated/registered for and then participated in any of the above-mentioned methods of reporting on clinical performance but did not elect quality tiering will have a neutral value modifier in 2015, which results in no impact on 2015 payments.  In 2015, the value modifier will apply to both participating and non-participating Medicare physicians in groups of 100 or more EPs.

In 2016, physicians in groups of 10 or more EPs who submit claims to Medicare under a single TIN will be subject to the value modifier, based on their performance in calendar year 2014. In order to avoid a negative 2% value modifier adjustment in 2016, these group practices will need to register for one of three 2014 PQRS GPRO reporting mechanisms:  Web Interface (for groups with 25 or more eligible professionals (EPs), Qualified PQRS Registry or  Electronic Health Record (EHR) [via Direct EHR using Certified EHR Technology (CEHRT) or CEHRT via Data Submission Vendor] and meet the criteria to avoid the 2016 PQRS payment adjustment. See the Self-Nomination/Registration page for more information on registration.

If a group practice does not report quality measures via 2014 PQRS GPRO, CMS will calculate a group quality score if at least 50 percent of the EPs in the group report measures individually and meet the criteria to avoid the 2016 PQRS payment adjustment. For more information about available PQRS reporting methods and requirements for Individual EPs go to the How To Get Started page on the PQRS website.

Quality Tiering Option

Quality tiering is the analysis used to determine the type of adjustment (upward, downward or neutral) and the range of adjustment based on performance on quality and cost measures. Quality tiering will determine if a group practice’s performance is statistically better, the same, or worse than the national mean.

For the 2015 value modifier, group practices with 100 or more EPs could voluntarily choose to participate in quality tiering under the value modifier. Quality tiering could result in an upward, neutral or downward payment adjustment in 2015 for groups of 100 or more EPs.   Those who did not choose quality tiering would have a neutral value modifier, which would have no impact on their payments under the MPFS.

For the 2016 value modifier, quality tiering is mandatory for groups with 10 or more EPs. Physicians in groups of 10 to 99 EPs will be subject to an upward or neutral payment adjustment, while groups of physicians with 100 or more EPs will be subject to an upward, neutral, or downward payment adjustment.  

Quality Benchmarks for the 2015 Value Modifier and the 2013 Quality and Resource Use Reports (to be released Summer of 2014)

  PY2013 Prior Year Benchmarks [PDF, 143KB]