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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.  

2015 Value Modifier Results

The results from the implementation of the 2015 Value Modifier are shown in the “2015 Value Modifier Results” document.  This document provides the adjustment factor for CY 2015 payment adjustments to physicians in groups with 100 or more eligible professionals that elected quality-tiering and earned an upward payment adjustment.  This document also provides information on the number of groups that are subject to the Value Modifier and how groups that elected quality-tiering performed under the 2015 Value Modifier.

2015 Value Modifier Results [PDF, 142KB]

Quality Benchmarks for the 2016 Value Modifier and the 2014 Quality and Resource Use Reports (to be released late Summer 2015)

The quality benchmarks shown in the “Performance Year 2014 Prior Year Benchmarks” document are the means and standard deviations for each measure that will be included in the Performance Year 2014 QRURs and used in the calculation of the 2016 Value Modifier. The  benchmarks for each quality measure are based on the performance of all solo practitioners and groups nationwide in 2013, the year prior to the performance year (2013 benchmarks for the 2014 performance year). A group's individual measure score that is part of the overall quality composite for the Value Modifier depends on the group’s performance rate relative to the benchmark for that measure. This document provides an opportunity for groups to review the benchmarks and see how their performance on each of the quality measures compares to the mean for all solo practices and groups nationwide.

PY2014 Prior Year Benchmarks [PDF, 501KB]

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]

Action to Take for Groups with 10 or More Eligible Professionals In Order To Avoid the Automatic CY 2016 Value-Based Payment Modifier Downward Payment Adjustment

In calendar year (CY) 2016, Medicare will apply the Value-Based Payment Modifier (Value Modifier) under section 1848(p) of the Social Security Act (the Act) to physician payments under the Medicare Physician Fee Schedule for physicians in groups with 10 or more eligible professionals (EPs).  EPs consist of physicians, practitioners, physical or occupational therapists, qualified speech-language pathologists, and qualified audiologists.  A group of physicians is defined by its Medicare-enrolled Taxpayer Identification Number (TIN). 

CY 2014 is the performance period for the Value Modifier that will be applied in CY 2016.  In order to avoid an automatic negative two percent (“-2.0%”) Value Modifier payment adjustment in CY 2016, EPs in groups of 10 or more MUST participate in the Physician Quality Reporting System (PQRS) and satisfy reporting requirements as a group or as individuals in CY 2014.  We note that quality-tiering is mandatory for groups subject to the Value Modifier in CY 2016.  Additional information about quality-tiering is provided below.

Medicare will NOT apply the CY 2016 Value Modifier to a group of physicians if one or more physicians in the group participates in the Medicare Shared Savings Program, the Pioneer ACO Model, or the Comprehensive Primary Care Initiative in CY 2014.

The deadline for groups to register to participate in the PQRS Group Practice Reporting Option (GPRO) as a group in CY 2014 has passed.  Therefore, in order to avoid the automatic "-2.0%" Value Modifier payment adjusment in CY 2016, groups with 10 or more EPs that did not register to participate in the PQRS GPRO in CY 2014, must ensure that at least 50% of the EPs in the group participate in the PQRS as individuals in CY 2014 and meet the satisfactory reporting criteria as individuals via a qualified PQRS registry, or EHR (or in lieu of satisfactory reporting, satisfactorily participate in a Qualified clinical data registry)to avoid the CY 2016 PQRS payment adjustment.  Below we provide information on how EPs in a group can participate in the PQRS as individuals in order to avoid the CY 2016 PQRS payment adjustment and the CY 2016 Value Modifier payment adjustment.

Participate in the PQRS as Individuals 

Groups with 10 or more EPs can avoid the automatic “-2.0%” Value Modifier payment adjustment in CY 2016, if the EPs in the group participate in the PQRS as individuals in CY 2014 and at least 50% of the EPs in the group meet the satisfactory reporting criteria as individuals (or in lieu of satisfactory reporting, satisfactorily participate in a Qualified Clinical Data Registry) to avoid the “-2.0%” CY 2016 PQRS payment adjustment.  Individual EPs still have time to participate in 2014 PQRS through one of the following mechanisms:

 

PQRS Reporting Mechanism

Submission Dates*

CEHRT EHR Direct Product 1/1/2015 – 2/28/2015**
CEHRT EHR DSV 1/1/2015 – 2/28/2015**
QCDR (EHR Incentive Program) 1/1/2015 – 2/28/2015**
QCDR (PQRS Only) 1/1/2015 – 3/31/2015
Qualified Registry 1/1/2015 – 3/31/2015
  • *Submission ends at 8:00 PM ET on the submission end date listed above. Submissions will not be accepted after this time.
  • **Quality Data Reporting Architecture (QRDA) I and III files will not be accepted after February 28, 2015. Any submissions that occur after February 28, 2015, will not be processed for the EHR Incentive Program.

Please note that these are the only PQRS individual reporting mechanisms available for reporting at this time.

No registration is necessary for a group if the EPs in the group participate in the PQRS as individuals.  However, each group must ensure that at least 50% of the EPs in the group meet the criteria to avoid the “-2.0%” CY 2016 PQRS payment adjustment in order for the group to avoid the automatic “-2.0%” Value Modifier payment adjustment in CY 2016.  Please note that under this option, only the EPs in the group that satisfactorily report (or satisfactorily participate in a Qualified Clinical Data Registry) under the PQRS as individuals in CY 2014 will avoid the CY 2016 PQRS payment adjustment, while the remaining EPs will be subject to the PQRS payment adjustment.

The 2014 PQRS measures submission process for the individual reporting options mentioned above starts on January 1, 2015.  More information about participation in the 2014 PQRS is located at:  http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html?redirect=/PQRS/ . More information about the CY 2016 PQRS payment adjustment is located at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-AssessmentInstruments/PQRS/Payment-Adjustment-Information.html.

Please note that group practices and EPs participating in the PQRS through another CMS program (such as the Medicare Shared Savings Program, the Pioneer ACO Model, or the Comprehensive Primary Care Initiative) should check the program’s requirements for information on how to take part in the PQRS. 

A Group’s Performance on Quality and Cost Measures in CY 2014 Can Make A Difference In Its CY 2016 Payments

Quality-tiering is the methodology that is used to evaluate a group’s performance on cost and quality measures for the Value Modifier.  For the CY 2016 Value Modifier, quality-tiering is mandatory for groups with 10 or more EPs based on group size in CY 2014. 

Groups with 10 or more EPs that avoid the automatic “-2.0%” Value Modifier payment adjustment in CY 2016 by satisfactorily reporting under the PQRS as a group or having at least 50% of the EPs in the group satisfactorily report as individuals in CY 2014 in order to avoid the 2016 PQRS payment adjustment will be subject to quality-tiering.  This means that: (1) groups of 100 or more EPs could receive an upward adjustment of 2 times the VM adjustment factor, neutral (meaning no adjustment), or downward Value Modifier adjustment to their Medicare PFS physician payments for CY 2016 based on their performance on quality and cost measures in CY 2014; and (2) groups with between 10 and 99 EPs could receive an upward adjustment of 2 times the VM adjustment factor or a neutral adjustment (meaning no adjustment) in CY 2016 and are held harmless from any downward adjustment derived under the quality-tiering methodology.  The maximum downward adjustment for groups of 100 or more EPs is “-2.0%” (if classified as low quality/high cost).  Groups with 10 or more EPs that are eligible for an upward payment adjustment may also qualify to receive an additional upward adjustment of one times the VM adjustment factor, if the group’s average beneficiary risk score is in the top 25 percent of all beneficiary risk scores.   

Additional Resources

More information about the Value Modifier program is available at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/index.html

More information about the PQRS program is available at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html

For questions about participating in the 2014 PQRS as an individual, please contact the QualityNet Help Desk at 1-866-288-8912 or via email at qnetsupport@hcqis.org.  

For questions about the Value Modifier, please contact the Physician Value Help Desk at 1-888-734-6433 (select option 3).