Back in mid-March, the American Medical Association (AMA), the Medical Group Management Association (MGMA), and dozens of other healthcare organizations sent a letter to newly-confirmed Centers for Medicare and Medicaid Services Administrator (CMS) Seema Verma urging the federal government to reduce the burden and penalties associated with EHRs, meaningful use, the Physician Quality Reporting System, and Value-Based Payment Modifier immediately, rather than waiting for the MACRA Quality Payment Program to kick in for 2019 payments.
Suggesting an “administrative hardship” exception category, the group appealed to the Trump administration’s emphasis on “reducing regulatory burdens.”
“Congress recognized when it passed the Medicare Access and CHIP Reauthorization Act (MACRA) in an overwhelming bipartisan vote that the existing Medicare value-based purchasing programs affecting physicians—Meaningful Use (MU), Physician Quality Reporting System (PQRS), and Value-based payment modifier (VM–needed to be streamlined and aligned,” the letter said.
In fact, groups who did not successfully attest to meaningful use or fulfill the reporting requirements of PQRS back in 2015 currently are facing reductions to their Medicare payments of as much as 9 percent in 2017. That number jumps up to 10 percent in 2018 if CMS does not expand its hardship exemption categories, as the various industry groups have requested.
By comparison, in 2019, the first payment year for MACRA QPP, negative adjustments are capped at 4 percent, with the potential for positive adjustments as well. The potential negative and positive adjustments do steadily increase, however, with the highest penalty under the MACRA QPP set to increase to 9 percent in 2022.
But reduced Medicare reimbursement is not the only cost to providers for quality reporting. A 2016 report by Health Affairs estimated that practices spend about 15.1 hours per week, which translates to around $40,000 per physician each year, on quality reporting. According to a Healthcare IT News article about the report, physicians themselves spend about two and a half hours a week documenting quality measures, with the other 12 or so hours picked up by nursing or administrative staff to input the quality information into the medical record.
Of course, that $40,000 per physician per year likely doesn’t include additional administrative costs incurred by billing departments or medical billing companies, who also take on additional work for quality reporting, like entering and submitting claims-based measures, tracking quality reporting through business analytics reports, working with registry vendors to submit quality data on behalf of physician practices, and more. Not to mention, when a physician makes less money for more work (as is the case with most unsuccessful attempts to report quality measures), the percent-based billing company suffers the same fate.
According to the Healthcare Business Management Association (HBMA), when PQRI/PQRS/MU first began, billing companies quickly figured out that the costs associated with their clients participating and reporting exceeded the “reward” of bonus payments made to the practice. “It was income-negative to participate, and the losses from not participating were less for the practice,” writes Robert Burleigh, president of Brandywine Healthcare Services in West Chester, Pennsylvania, and founding member of HBMA. “Of course, if the billing company bore the costs and the providers got the bonuses, the billing company lost money while the practice made a little – even if the billing company’s percentage fee was increased slightly. Practices doing their own billing figured this out, too, and MGMA echoed HBMA members’ findings.”
Burleigh recommends that billing companies consider revisiting their client contracts to account for the increased costs and decreased revenue that often accompany quality reporting programs. At the very least, he recommends making the contract flexible enough in the event Medicare’s program changes significantly impact costs or revenue in the future. “A ‘Material Change’ clause is essential to ensure that either party can propose a modification of the agreement as a result of a regulatory, business, or other meaningful change,” Burleigh writes.
Then, there are the specific costs associated with installing and upgrading an electronic health record, submitting data to qualified registries, performing the new improvement activities under the MIPS program, participating in Advanced Alternative Payment Models, and more.
And none of this takes into consideration the costs CMS and other payers incur to train providers, accept and process data, or report on the results. How much of the potential savings from value-based care is eaten up through the costs of reporting and tracking quality data?
All of this makes up the high cost of quality reporting … not only for physicians but across the industry. Knowing how to alleviate the actual and administrative costs, while still improving quality of care and reducing costs, is the real burden facing healthcare.
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