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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]

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, 804KB]

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 and satisfy the Physician Quality Reporting System (PQRS) requirements as a group or as individuals in CY 2014, as described below.  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.

For purposes of the Value Modifier, a group with 10 or more EPs can participate in the PQRS in CY 2014 by choosing one of the two following options:

OPTION 1: Participate in the PQRS as a Group Practice

Groups of 10 or more EPs can avoid the automatic “-2.0%” Value Modifier payment adjustment in CY 2016 by participating in the PQRS Group Practice Reporting Option (GPRO) in CY 2014 and meets the satisfactory reporting criteria to avoid the “-2.0%” CY 2016 PQRS payment adjustment.  Groups can participate in the 2014 PQRS GPRO by selecting one of the GPRO reporting mechanisms: 

  • Qualified PQRS Registry
  • Electronic Health Record (EHR)
  • Web Interface (for groups with 25 or more EPs only)
  • Consumer Assessment of Health Providers and Systems (CAHPS) Survey via a CMS-certified Survey Vendor (as a supplement to another GPRO reporting mechanism; groups can elect whether to include the results of the CAHPS survey in the calculation of their CY 2016 Value Modifier; the survey is available for groups with 25 or more EPs only and the cost of administration is covered by CMS for 2014)

Groups can register to participate in the 2014 PQRS GPRO via the Physician Value-Physician Quality Reporting System (PV-PQRS) Registration System.  The Registration System allows authorized representatives of a group to register to participate in the 2014 PQRS GPRO until September 30, 2014 11:59 pm EDT.  Please access the Registration System at https://portal.cms.gov using an Individuals Authorized Access to the CMS Computer Services (IACS) account.  Please see the instructions provided below on how to obtain an IACS account

If  groups choose Option 1, then an authorized representative from each group must get an IACS account and register each group to participate in the 2014 PQRS GPRO in the Registration System as soon as possible and prior to the September 30, 2014 registration deadline. 

A quick reference guide for registering for the 2014 PQRS GPRO is available in the “Downloads” section of CMS’ Registration website located at:

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Self-Nomination-Registration.html

As noted above,  groups with 10 or more EPs must meet the satisfactory reporting criteria through the PQRS GPRO to avoid the “-2.0%” CY 2016 PQRS payment adjustment in order to also avoid the automatic “-2.0%” Value Modifier payment adjustment in CY 2016.  More information about the CY 2016 PQRS payment adjustment is located at: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Payment-Adjustment-Information.html.

OPTION 2: 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 each group participate in the PQRS as individuals in CY 2014 and at least 50% of the EPs in each 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.  EPs can participate in the PQRS as individuals in CY 2014 via one of the following four reporting mechanisms:

  • Medicare Part B Claims
  • Qualified PQRS Registry
  • Electronic Health Record (EHR)
  • Qualified Clinical Data Registry

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) 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.  For more information about the CY 2016 PQRS payment adjustment, please see the website listed above.

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 meeting the criteria to avoid the CY 2016 PQRS payment adjustment as a group or as individuals in CY 2014, as described under Options 1 and 2 above, will be subject to quality-tiering.  This means that: (1) groups of 100 or more EPs could receive an upward, neutral (meaning no adjustment), or downward Value Modifier adjustment to 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 or neutral adjustment for 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 may qualify for an upward adjustment of up to +2.0 times a specified adjustment factor that will be determined after the end of CY 2014. 

Obtaining An IACS Account is Required (if Choosing Option 1)

To access the Registration System in order to register for a 2014 PQRS GPRO, an authorized representative of the group must have an IACS account with a “PV-PQRS Group Security Official” role.  If the group does not yet have an authorized representative with an IACS account, then one person representing the group must sign up for an IACS account with the primary “PV-PQRS Group Security Official” role.  If the group has a representative with an existing IACS account, but not one with the primary “PV-PQRS Group Security Official” role, then please check with the QualityNet Help Desk that the account is still active and add this role to that person’s existing IACS account.

Group representatives can sign up for a new IACS account or modify an existing account at https://applications.cms.hhs.gov.  Please complete this step NOW to avoid any last minute delays in obtaining an IACS account.  Also, please note that it takes approximately 24 hours for CMS to process an IACS account request; therefore, an IACS account must be obtained in advance so that the group’s registration can be submitted by September 30, 2014.  A guide with step-by-step instructions for obtaining an appropriate IACS account is available in the “Downloads” section of CMS’ Registration website listed above.

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 the Value Modifier, the IACS sign up process, or participating in the 2014 PQRS as a group or individual, please contact the QualityNet Help Desk at 1-866-288-8912 or via email at qnetsupport@hcqis.org.