Fact Sheets

Proposed changes for the Physician Value-based Payment Modifier in the CY 2015 Medicare Physician Fee Schedule Proposed Rule

Proposed changes for the Physician Value-based Payment Modifier in the CY 2015 Medicare Physician Fee Schedule Proposed Rule

Overview

On July 3, 2014 the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update payment policies and payment rates for services furnished under the Medicare Physician Fee Schedule (MPFS) on or after Jan. 1, 2015. The proposed rule includes proposals for implementing the value-based payment modifier (Value Modifier) required by the Affordable Care Act that would adjust payments to physicians, groups of physicians, and other eligible professionals based on the quality and cost of care they furnish to beneficiaries enrolled in the traditional Medicare Fee-for-Service (FFS) program.

This fact sheet discusses the proposals for implementing the Value Modifier. Separate fact sheets, also issued today, discusses the proposed changes to payment policies for services furnished under the PFS, and the proposed changes to these quality reporting programs and other proposals included in this rule.

Value Modifier for items and services paid under the PFS

The Affordable Care Act establishes a value-based payment modifier (Value Modifier) that provides for differential payment to a physician or group of physicians under the Medicare Physician Fee Schedule based upon the quality of care furnished to Medicare FFS beneficiaries compared to the cost of that care during a performance period. Further, the statute requires that we begin applying the Value Modifier on January 1, 2015, with respect to items and services furnished by specific physicians and groups of physicians (as determined by the Secretary) and to apply it to all physicians and groups of physicians beginning not later than January 1, 2017. The statute requires that the Value Modifier must be implemented in a budget neutral manner, generally meaning that upward payment adjustments for high performance must balance the downward payment adjustments applied for poor performance.

In this rule, we propose additions and refinements to the existing Value Modifier policies. These proposals continue our phased-in implementation of the Value Modifier by reinforcing our emphasis on quality measurement, alignment with the Physician Quality Reporting System (PQRS), physician choice, and shared accountability.

Proposed group size and application of the Value Modifier to non-physician EPs

We propose to apply the Value Modifier beginning in calendar year (CY) 2017 to physicians in groups with two or more eligible professionals (EPs) and to physicians who are solo practitioners. This proposal completes the phase-in of the Value Modifier to all EPs as required by the statute.

The statute provides discretion to apply the Value Modifier beginning in CY 2017 to EPs (as defined in section 1848(k)(3)(B) of the Social Security Act) as the Secretary determines appropriate, which includes EPs who are not physicians. We propose to apply the Value Modifier beginning in CY 2017 to non-physician EPs in groups with two or more EPs and to non-physician EPs who are solo practitioners.

We estimate that our proposals to apply the Value Modifier to all groups with two or more EPs and to all solo practitioners in CY 2017 would affect approximately 83,500 groups and 210,000 solo practitioners (as identified by their Taxpayer Identification Numbers (TINs)) that consist of approximately 815,000 physicians and 315,000 non-physician EPs.

Proposed Value Modifier payment adjustments

We propose to increase the downward adjustment under the Value Modifier from -2.0 percent in the CY 2016 payment adjustment period to -4.0 percent for the CY 2017 payment adjustment period. That is, for CY 2017 payments, a -4.0 percent Value Modifier would apply to groups and solo practitioners subject to the Value Modifier that do not meet satisfactory quality reporting requirements for the Physician Quality Reporting System (PQRS). In addition, we propose to increase the maximum downward adjustment under the quality-tiering methodology to -4.0 percent for groups and solo practitioners classified as low quality/high cost and to set the adjustment to -2.0 percent for groups and solo practitioners classified as either low quality/average cost or average quality/high cost. We also propose to increase the maximum upward adjustment under the quality-tiering methodology in the CY 2017 payment adjustment period to +4.0x (‘x’ represents the upward payment adjustment factor) for groups and solo practitioners classified as high quality/low cost and to set the adjustment to +2.0x for groups and solo practitioners classified as either average quality/low cost or high quality/average cost.

Proposals for setting the Value Modifier adjustment based on PQRS participation

Similar to the approach established for the CY 2016 Value Modifier and in a continued effort to align the Value Modifier with PQRS, we propose to classify groups and solo practitioners subject to the CY 2017 Value Modifier using a two-category approach that is based on whether and how groups and solo practitioners participate in the PQRS. We previously established CY 2015 as the performance period for the CY 2017 payment adjustment period for the Value Modifier. The implications of being in either of the two categories are described below. We propose that Category 1 would include those groups with two or more EPs that meet the criteria for satisfactory reporting of data on PQRS quality measures via the PQRS Group Practice Reporting Option (GPRO) (through use of the web-interface, electronic health record (EHR), or registry reporting mechanism) for the CY 2017 PQRS payment adjustment. We also propose to include in Category 1 groups that do not register to participate in the PQRS GPRO in CY 2015 and that have at least 50 percent of the group’s EPs meet the criteria for satisfactory reporting of data on PQRS quality measures as individuals (through the use of claims, EHR, or registry reporting mechanism) for the CY 2017 PQRS payment adjustment, or in lieu of satisfactory reporting, satisfactorily participate in a PQRS-qualified clinical data registry for the CY 2017 PQRS payment adjustment. We would maintain the 50 percent threshold for the CY 2017 Value Modifier as we expand the application of the Value Modifier to all groups and solo practitioners in CY 2017. Lastly, we propose to include in Category 1 those solo practitioners that meet the criteria for satisfactory reporting of data on PQRS quality measures as individuals (through the use of claims, registry, or EHR reporting mechanism) for the CY 2017 PQRS payment adjustment, or in lieu of satisfactory reporting, satisfactorily participate in a PQRS-qualified clinical data registry for the CY 2017 PQRS payment adjustment.

We propose that Category 2 would include those groups and solo practitioners that are subject to the CY 2017 Value Modifier and do not fall within Category 1. As discussed below, for CY 2017, we are proposing to apply a -4.0 percent Value Modifier downward payment adjustment to groups with 2 or more EPs and solo practitioners that fall in Category 2.

In addition, we propose to apply the quality-tiering methodology, which is used for evaluating performance on quality and cost measures for the Value Modifier, to all groups and solo practitioners in Category 1 for the CY 2017 Value Modifier. However, we also propose that groups with between two and nine EPs and solo practitioners would receive only upward or neutral adjustments as determined under the quality-tiering methodology and groups with 10 or more EPs would receive upward, neutral, or downward payment adjustments as determined under the quality-tiering methodology. In other words, groups with between two and nine EPs and solo practitioners that are in Category 1 would be held harmless from any downward adjustments derived from the quality-tiering methodology for the CY 2017 Value Modifier. We believe this proposed approach would reward groups and solo practitioners that provide high-quality/low-cost care, reduce program complexity, and would also fully engage groups and solo practitioners into the Value Modifier as we complete its phase-in implementation in CY 2017.

We also propose to use for the CY 2017 Value Modifier all of the PQRS quality measures that would be available to be reported under the various PQRS reporting mechanisms in CY 2015, including quality measures reported through PQRS-qualified clinical data registries. In addition, we propose that groups with two or more EPs would be able to elect to have the patient experience of care measures collected through the CAHPS for PQRS survey in CY 2015 included in their quality of care composite for the Value Modifier for CY 2017.

Proposals to apply the Value Modifier to groups and solo practitioners that participate in the Shared Savings Program, the Pioneer ACO Model, the CPC Initiative, or other similar Innovation Center models or CMS initiatives

Beginning with the CY 2017 payment adjustment period, we propose to apply the Value Modifier to physicians and non-physician EPs in groups with two or more EPs and to physicians and non-physician EPs who are solo practitioners that participate in an Accountable Care Organization (ACO) under the Medicare Shared Savings Program (Shared Savings Program) during the payment adjustment period. We propose to use the PQRS GPRO web-interface measures in determining the quality of care composite for groups and solo practitioners participating in ACOs under the Shared Savings Program in CY 2017. We also propose to use the all cause hospital readmissions measure as calculated for ACOs under the Shared Savings Program for inclusion in the quality composite for the Value Modifier for these groups and solo practitioners. Please refer to the proposed rule for additional details on our proposals.

Beginning with the CY 2017 payment adjustment period, we propose to apply the Value Modifier to physicians and non-physician EPs in groups with two or more EPs and to physicians and non-physician EPs who are solo practitioners that participate in the Pioneer ACO Model, the Comprehensive Primary Care (CPC) Initiative, or other similar Innovation Center models or CMS initiatives during the relevant performance period. Please refer to the proposed rule for additional details on our proposals.

Methodological refinements to address NQF issues regarding the total per capita cost measure

We propose, beginning with the CY 2017 Value Modifier, to address two of the major issues that the National Quality Forum (NQF) Cost and Resource Use Committee raised in its review of the total per capita cost measure. First, we propose to modify the beneficiary attribution methodology used for the Value Modifier to allow for more consideration of primary care services furnished by non-physician eligible professionals while maintaining general consistency with the assignment methodology used for the Shared Savings Program. Second, we propose to reverse the current exclusion of certain Medicare beneficiaries during the performance period.

Proposed expanded informal inquiry process

We propose to expand the informal inquiry process for the Value Modifier starting with the CY 2015 payment adjustment period. We propose to establish a brief period for a group or solo practitioner to request correction of a perceived error made by CMS in the determination of its Value Modifier payment adjustment. These errors could include errors made by CMS in assessing the eligibility of a group or solo practitioner for the Value Modifier based on its participation in a Shared Savings Program ACO, computing standardized scores, computing domain scores, computing composite scores, and/or computing additional outcome or cost measures. We are currently working to develop and operationalize the necessary infrastructure to support a process for correcting errors related to quality measure data, and in the interim, we propose to classify a group as “average quality” to the extent we determine that we have made an error in the calculation of the quality composite.

Physician Feedback Program

For the last three years, we have provided annual Quality and Resource Use Reports (QRURs) to groups of physicians to provide feedback on the quality and cost of care furnished to Medicare beneficiaries. We will continue to use the annual QRURs to explain how the Value Modifier would affect payment under the PFS. In the late summer 2014, we plan to disseminate QRURs based on CY 2013 data to all groups of physicians and solo practitioners. These QRURs will contain performance information on the quality and cost measures used to calculate the quality and cost composites of the Value Modifier and will show how TINs would fare under the policies finalized for the CY 2015 Value Modifier. For groups of physicians with 100 or more EPs, the CY 2013 QRUR will also show how a group’s payments will be affected by the CY 2015 Value Modifier, including any upward, neutral or downward payment adjustment if the group elected the quality-tiering option. The QRURs will also include additional information about the TIN’s performance on the Medicare Spending per Beneficiary (MSPB) measure, individually-reported PQRS measures, and the specialty-adjusted cost measures. During the summer of 2015, we intend to disseminate QRURs based on CY 2014 data to all groups and solo practitioners, and the reports would show how TINs would fare under the policies finalized for the CY 2016 Value Modifier. We encourage groups to access their CY 2013 QRURs once they are available later this summer in order to help them understand their current performance levels and how to use the information provided in the QRURs to improve their performance on quality and cost measures. The reports will be available via the following link in late summer 2014: https://portal.cms.gov.

The proposed rule will be published in the Federal Register on July 3, 2014. CMS will accept comments on the proposed rule until Sept. 2, 2014.

For more information, visit: https://www.federalregister.gov/public-inspection

For more information on the Value Modifier and Physician Feedback Program, visit: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/index.html

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