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Value-Based Payment Modifier

What is the Value-Modifier
         Fact Sheet for Attribution in the Value-Based Payment Modifier Program
         Fact Sheet for Specialty Adjustment in the Value-Based Payment Modifier Program
         Fact Sheet for Risk Adjustment in the Value-Based Payment Modifier Program

Gradual Implementation of the Value Modifier

Quality and Cost Measures Used in the Value Modifier
        Measure Information Form: Ambulatory Care-Sensitive Condition (ACSC) Composite Measures
        Measure information Form: All Cause Hospital Readmission
        Measure Information Form: Overall Total Per Capita Cost Measure
        Measure Information Form: Condition-Specific Total Per Capita Cost Measures
        Measure Information Form: Medicare Spending Per Beneficiary Measure  

CY 2015 Payment Adjustment – Physician Groups of 100 or more Eligible Professionals
       Summary of 2015 Physician Value-based Payment Modifier Policies
       The 2015 Value Modifier Results
       2015 Value Modifier Program Experience Report
       Quality Benchmarks for the 2015 Value Modifier and the 2013 Quality and Resource Use Reports

CY 2016 Payment Adjustment – Physician Groups of 10 or more Eligible Professionals
        Fact Sheet: Changes for the Physician Value-based Payment Modifier in the CY 2014 Medicare Physician Fee Schedule Final Rule
        Quality Benchmarks for the 2016 Value Modifier and the 2014 Quality and Resource Use Reports (to be released Fall 2015)

CY 2017 Payment Adjustment – Physician Solo Practitioners and Physician Groups of 2 or more Eligible Professionals
       Fact Sheet: Value-based Payment Modifier in the CY 2015 Medicare Physician Fee Schedule Final Rule

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

CY 2018 Payment Adjustment - Physicians and Non-Physicians Who Are Solo Practitioners or in Groups of 2 or More Eligible Professionals

What is the Value-Based Payment Modifier (Value Modifier)

The Value Modifier provides for differential payment to a physician or group of physicians under the Medicare Physician Fee Schedule (PFS) based upon the quality of care furnished compared to the cost of care during a performance period. In the future, the Value Modifier will be used to adjust Medicare PFS payments to non-physician eligible professionals (EPs), in addition to physicians. The Value Modifier is an adjustment made on a per claim basis to Medicare payments for items and services under the Medicare PFS. It is applied at the Taxpayer Identification Number (TIN) level to physicians (and beginning in 2018, to non-physician EPs) billing under the TIN.

Fact Sheet for Attribution in the Value-Based Payment Modifier Program [PDF, 222KB]

This document provides an overview of the attribution methodology implemented in the Value-Based Payment Modifier Program.

Fact Sheet for Specialty Adjustment in the Value-Based Payment Modifier Program [PDF, 94KB]

This document provides an overview of the specialty adjustment methodology implemented in the Value-Based Payment Modifier Program.

Fact Sheet for Risk Adjustment in the Value-Based Payment Modifier Program [PDF, 154KB]

This document provides an overview of the risk adjustment methodology implemented in the Value-Based Payment Modifier Program

Gradual Implementation of the Value Modifier

Section 3007 of the Affordable Care Act mandated that, by 2015, CMS begin applying a Value Modifier under the Medicare PFS. We are phasing in the Value Modifier gradually to different sizes of physician group. In terms of the phase in, we are applying the Value Modifier in 2015 based on performance in 2013 for groups of 100 or more eligible professionals (EPs).  In 2016, we will apply the Value Modifier to groups of physicians with 10 or more EPs based on 2014 performance.  The Affordable Care Act requires CMS to apply the Value Modifier to all physicians and groups of physicians starting in 2017.  For 2015 and 2016, the Value Modifier does not apply to groups of physicians in which any of the group’s physicians participate in the Medicare Shared Savings Program, the Pioneer ACO Model, or the Comprehensive Primary Care initiative during 2013 and 2014, respectively.  For 2017, the Value Modifier applies to participants in the Medicare Shared Savings Program, Pioneer ACO Model, and Comprehensive Primary Care Initiative.  For 2018, the Value Modifier will also apply to Medicare PFS payments made to non-physician EPs.

Quality and Cost Measures Used in the Value Modifier 

We align the Value Modifier Program’s quality measurement component with the reporting requirements under the Physician Quality Reporting System (PQRS). Our primary interests in aligning these programs are to improve the quality of care for Medicare beneficiaries, to provide a common base that does not increase physician reporting burden, and to emphasize the importance of reporting quality performance. To take steps to fulfill PQRS reporting requirements, please see the How to Get Started page of the PQRS Website.

In addition, the quality measurement component of the Value Modifier includes three outcome measures that CMS calculates from FFS Medicare claims:

  • two composite measures of hospital admissions for ambulatory care-sensitive conditions
    • acute conditions
    • chronic conditions
  • one measure of 30-day all-cause hospital readmissions.  

For more detailed information about these measures, see the Measure Information Forms below.

Measure Information Form: Ambulatory Care-Sensitive Condition (ACSC) Composite Measures

This document provides a detailed, methodological overview of the Ambulatory Care Sensitive Conditions measures, calculated for the Value-Based Payment Modifier Program.

Measure Information Form: All Cause Hospital Readmission

This document provides a detailed, methodological overview of the 30-Day All-Cause Hospital Readmission measure, calculated for the Value-Based Payment Modifier Program.

For the cost measure component of the Value Modifier, we include the performance of 6 cost measures:

  • Total Per Capita Costs for All Attributed Beneficiaries measure,
  • Total Per Capita Costs for Beneficiaries with Specific Conditions: 
    • diabetes
    • coronary artery disease
    • chronic obstructive pulmonary disease
    • heart failure
  • Medicare Spending per Beneficiary (MSPB) measure.

For more information on these measures, please see the Measure Information Forms below.

Measure Information Form: Overall Total Per Capita Cost Measure

This document provides a detailed, methodological overview of the Overall Total Per Capita Cost measure, calculated for the Value-Based Payment Modifier Program.  

Measure Information Form: Condition-Specific Total Per Capita Cost Measures

This document provides a detailed, methodological overview of the Condition-Specific Total Per Capita Cost measures, calculated for the Value-Based Payment Modifier Program.

Measure Information Form: Medicare Spending Per Beneficiary Measure

This document provides a detailed, methodological overview of the Medicare Spending per Beneficiary Measure, calculated for the Value-Based Payment Modifier Program. 

CY 2015 Payment Adjustment – Physicians in Groups of 100 or more Eligible Professionals

Beginning in calendar year (CY) 2015, Medicare applies the Value Modifier to payment under the Medicare PFS for physicians in groups of 100 or more EPs.  CY 2013 was the performance period for the Value Modifier that is applied in CY 2015. In order to avoid an automatic negative one percent (“-1.0%”) Value Modifier payment adjustment in CY 2015, groups with 100 or more EPs were required to (1) self-nominate/register for a Physician Quality Reporting System (PQRS) Group Practice Reporting Option (GPRO) and report at least one measure via the GPRO web interface or a registry, or (2) elect the CMS-calculated administrative claims option as a group in CY 2013.  Groups of 100 or more EPs that elected to have their Value Modifier calculated using the quality-tiering methodology are subject to upward, neutral, or downward payment adjustment in CY 2015.

Please refer to the CY 2013 Medicare Physician Fee Schedule Final Rule with Comment Period, for a more complete discussion of the policies for the payment adjustments in CY 2015. Also, see below for additional documents to support the value modifier.

Summary of 2015 Physician Value-based Payment Modifier Policies [PDF, 182KB]

The 2015 Value Modifier Results
We display the results of the 2015 Value Modifier in the “2015 Value Modifier Results” document.  This document gives the adjustment factor for CY 2015 payment adjustments for physicians in groups with 100 or more EPs and shows information on the number of those groups subject to the 2015 Value Modifier.

2015 Value Modifier Program Experience Report

The 2015 Value Modifier Program Experience Report summarizes data on the characteristics and performance of the physician groups subject to the Value Modifier in 2015.  Some of the information included in this report include:

  • Descriptive characteristics of the physician groups that are subject to the 2015 Value Modifier and the subset of the groups whose Value Modifier was based on their 2013 quality and cost performance under quality-tiering, and also the characteristics of the physician groups and physician solo practitioners that received a 2013 Quality and Resource Use Report (QRUR) (Section III).
  • Analysis of the characteristics of physician groups subject to quality-tiering by their payment adjustment category and performance on the Quality and Cost Composites for the 2015 Value Modifier (Section IV).

Quality Benchmarks for the 2015 Value Modifier and the 2013 Quality and Resource Use Reports
The quality benchmarks shown in this document are the means for each measure that was included in the Performance Year 2013 QRURs and used in the calculation of the 2015 Value Modifier. The benchmarks for each quality measure are based on the performance of all solo practitioners and groups nationwide in 2012, the year prior to the performance year (2012 benchmarks for the 2013 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. Groups can use this document 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.

Performance Year 2013 Prior Year Benchmark [PDF, 143KB]

CY 2016 Payment Adjustment - Physicians in Groups of 10 or more Eligible Professionals

In CY 2016, Medicare will apply the Value Modifier to payments under the Medicare PFS for physicians in groups of 10 or more EPs.

CY 2014 is the performance period for the Value Modifier that will be applied in CY 2016. In order to be eligible for upward, downward, or neutral payment adjustments under the Value Modifier quality-tiering methodology and to avoid an automatic negative two percent (“-2.0%”) Value Modifier payment adjustment in CY 2016, EPs in groups with 10 or more EPs MUST participate in the PQRS and satisfy reporting requirements as a group or as individuals in CY 2014.  Quality-tiering is mandatory for groups subject to the Value Modifier in CY 2016. Groups with 100 or more EPs are subject to upward, neutral, or downward adjustment under quality-tiering, and groups with between 10 to 99 EPs are subject to only upward or neutral adjustment under quality-tiering in 2016.

Physician groups with 10 or more EPs can avoid the automatic “-2.0%” Value Modifier payment adjustment in CY 2016 by participating in the PQRS GPRO in CY 2014 and meeting the satisfactory reporting criteria to avoid the “-2.0%” CY 2016 PQRS payment adjustment.  Alternately, physician groups 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.

Please refer to the CY 2014 Medicare Physician Fee Schedule Final Rule with Comment Period, for a more complete discussion of the policies for the payment adjustments in CY 2016. Also, see below for additional documents to support the value modifier.

Fact Sheet: Changes for the Physician Value-based Payment Modifier in the CY 2014  Medicare Physician Fee Schedule Final Rule

Quality Benchmarks for the 2016 Value Modifier and the 2014 Quality and Resource Use Reports (to be released Fall 2015)
The quality benchmarks shown in this 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. Groups can use this document 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.

Performance Year 2014 Prior Year Benchmark [PDF, 452KB]

CY 2017 Payment Adjustment - Physician Solo Practitioners and Physicians in Groups of 2 or more Eligible Professionals

In CY 2017, Medicare will apply the Value Modifier to physician payments under the Medicare PFS for physician solo practitioners and physicians in groups of 2 or more EPs. This policy completes the phase-in of the Value Modifier to all physicians and groups of physicians as required by the statute. CY 2015 is the performance period for the Value Modifier that will be applied in CY 2017. In order to be eligible for upward, downward, or neutral payment adjustments under the Value Modifier quality-tiering methodology and to avoid an automatic negative two percent (“-2.0%”) (for physician groups with between 2 to 9 EPs and physician solo practitioners) or negative four percent ("-4.0%") (for physician groups with 10 or more EPs) Value Modifier payment adjustment in CY 2017, EPs in groups and solo practitioners MUST participate in the PQRS and satisfy reporting requirements as a group or as individuals in CY 2015.  Quality-tiering is mandatory for groups and solo practitioners subject to the Value Modifier in CY 2017.  Groups with 10 or more EPs are subject to upward, neutral, or downward adjustment under quality-tiering, and groups with between 2 to 9 EPs and physician solo practitioners are subject to only upward or neutral adjustment under quality-tiering in 2017.

Physician groups with 2 or more EPs can avoid the automatic “-2.0%” (for groups with between 2 to 9 EPs) or "-4.0%" (for groups with 10 or more EPs) Value Modifier payment adjustment in CY 2017 by participating in the PQRS GPRO in CY 2015 and meeting the satisfactory reporting criteria to avoid the “-2.0%” CY 2017 PQRS payment adjustment. Alternatively, physician groups with 2 or more EPs can avoid the automatic “-2.0%” (for groups with between 2 to 9 EPs) or "-4.0%" (for groups with 10 or more EPs) Value Modifier payment adjustment in CY 2017, if the EPs in the group participate in the PQRS as individuals in CY 2015 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 2017 PQRS payment adjustment. 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.

Please refer to the CY 2015 Medicare Physician Fee Schedule Final Rule with Comment Period, for a more complete discussion of the policies for the payment adjustments in CY 2017. Also, see below for additional documents to support the value modifier.

Fact Sheet: 2017 Value Modifier in the CY 2015 Medicare Physician Fee Schedule Final Rule

Video: PQRS/Value-Based Payment Modifier: What Medicare Professionals Need to Know in 2015

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 on Performance and Avoid the Automatic CY 2017 Downward Payment Adjustment under the Value Modifier

What To Do In 2015 For The 2017 Value Modifier [PDF, 110KB]

CY 2018 Payment Adjustment - Physicians and Non-Physicians Who Are Solo Practitioners or in Groups of 2 or More Eligible Professionals.

In CY 2018, Medicare will apply the Value Modifier to all physicians and non-physicians who are solo practitioners or in groups of 2 or more EPs. This policy expands the application of the Value Modifier to include all non-physician EPs and was finalized in the CY 2015 Medicare PFS Final Rule with comment period. We plan to finalize how the 2018 Value Modifier will be applied to all physician and non-physician EP solo practitioners and those in groups 2018 in future rulemaking.