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Value-Based Payment Modifier

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.  The Value Modifier is an adjustment made 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 certain non-physician eligible professionals (EPs) billing under the TIN.

Quality and Cost Measures Used in the Value Modifier

We align the Value Modifier 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 up to three outcome measures that CMS calculates from Medicare fee-for-service 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 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 (beginning with the 2016 Value Modifier).

 

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

In calendar year (CY) 2015, Medicare applied the Value Modifier to payments under the Medicare PFS for physicians in groups of 100 or more EPs.  CY 2013 was the performance period for the Value Modifier that was 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 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.

Visit the 2013 QRUR and 2015 Value Modifier webpage for detailed information about the 2015 Value Modifier.

 

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

In CY 2016, Medicare applies 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 is 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.

Visit the 2014 QRUR and 2016 Value Modifier webpage for detailed information about the 2016 Value Modifier.

 

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

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.

Visit the 2015 QRUR and 2017 Value Modifier webpage for detailed information about the 2017 Value Modifier.

 

CY 2018 Payment Adjustment - Physicians, Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists Who Are Solo Practitioners or in Groups of 2 or More EPs

In CY 2018, Medicare will apply the Value Modifier to payments under the Medicare PFS for physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists who are solo practitioners and physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists in groups with 2 or more EPs. CY 2016 is the performance period for the Value Modifier that will be applied in CY 2018. Avoiding the CY 2018 PQRS payment adjustment by satisfactorily reporting via a PQRS GPRO is one of the ways groups can avoid the automatic downward payment adjustment (-2.0% or -4.0% depending on the size and composition of the group) and qualify for adjustments based on performance under the Value Modifier in CY 2018. Alternatively, groups can also avoid the automatic downward payment adjustment and qualify for adjustments based on performance in CY 2018, if the EPs in the group participate in the PQRS as individuals in CY 2016 and at least 50% of the EPs meet the criteria to avoid the CY 2018 PQRS payment adjustment. Solo practitioners can avoid the automatic downward payment adjustment and qualify for adjustments based on performance in CY 2018 meeting the criteria to avoid the CY 2018 PQRS payment adjustment as individuals. Visit the PQRS GPRO Registration webpage for detailed information about participating in the PQRS in CY 2016.

CY 2018 will be the final payment adjustment period under the Value Modifier.