The Centers for Medicare and Medicaid Services (CMS) Value-Based Payment Modifier (VBPM) Program was developed to encourage eligible professionals to improve both quality and efficiency in providing medical care. As such, the program provides incentive payments and payment adjustments based on a medical group’s quality-to-cost ratio. The program began in 2013 for the 2015 payment adjustment year, and only groups of 100 or more eligible professionals were required to participate. In 2014 for the 2016 payment adjustment year, groups of 10 or more eligible professionals were required to participate. In 2015 for the 2017 payment adjustment year, all physicians—whether in groups of 2 or more or solo practitioners—are required to participate.
There are several key components of the program to understand.
As a first step, all solo practitioners or groups of two or more physicians will be placed into one of two categories based on their PQRS performance.
Category I includes physician groups and individual physicians who are successful PQRS reporters. More specifically, the following groups fall into this category:
- Physician groups who register for GPRO Web Interface, Registry, or EHR and meet the criteria to avoid the 2017 PQRS payment adjustment,
- Physician groups with at least 50 percent of eligible physicians in the group who report PQRS measures as individuals and meet the criteria to avoid the 2017 PQRS payment adjustment, and
- Physician solo practitioners who report PQRS measures as individuals and meet the criteria to avoid the 2017 PQRS payment adjustment.
Physicians in this category will be subject to quality tiering with the potential to earn incentives or be subject to negative payment adjustments. (Quality tiering is discussed in more detail below.)
Category II includes physician groups and individual physicians who are not successful PQRS reporters who will receive an automatic negative payment adjustment for all 2017 Medicare Part B claims in addition to the 2 percent PQRS payment adjustment. Providers who fall into this category are as follows:
- Physician groups who do not meet the minimum reporting requirements to avoid the 2017 PQRS payment adjustment through GPRO reporting methods,
- Physician groups who do not have at least 50 percent of their eligible professionals who meet the minimum reporting requirements to avoid the 2017 PQRS payment adjustment through individual reporting methods, or
- Individual physicians who do not meet the minimum reporting requirements to avoid the 2017 PQRS payment adjustment.
The negative payment adjustments for physicians in this first category are calculated as follows:
- Groups of 10 or more physicians will automatically receive a 4 percent payment adjustment in addition to the 2 percent PQRS payment adjustment, and
- Solo practitioners and groups of 2-9 physicians will receive an automatic 2 percent payment adjustment in addition to the 2 percent PQRS payment adjustment.
Quality tiering is the ratio of quality versus cost composite scores calculated for each group in Category I based on the group’s standardized performance among all groups in the cost and quality reporting measures.
The VBPM program seeks to reward high quality/low cost groups with incentive payments up to 4.0x the payment factor and penalize low quality/high cost groups with payment adjustments up to 4.0%. (The incentive factor is determined annually based on the total payment adjustments since the program is mandated as “budget neutral.”)
According to CMS, most Category 1 groups will have “neutral tiering” and receive neither incentives nor payment adjustments. Also, for the 2015 reporting year, solo practitioners and groups of between 2 and 9 eligible physicians are not subject to payment adjustments through VBPM since this is the first year for these providers to qualify for the program. Those groups and individual practitioners will receive either neutral tiering or incentive payments of up to a factor of 2.0x. Physician groups with 10 or more physicians are eligible for incentives of up to 4.0x the factor for high quality and low cost and will be subject to payment adjustments of as much as 4.0 percent for high cost and low quality.
Both the payment adjustments and the incentive payments for the VBPM are applied as downward or upward adjustments on Part B payments for the year affected (unlike PQRS incentive payments which were paid in total based on allowed amounts from the reporting year.)
Quality and Cost Measures
As in previous years, VBPM quality reporting is compiled from the group’s performance on PQRS measures and certain outcome measures calculated by CMS from claims submitted for Medicare beneficiaries. Cost reporting is based on total per capita costs (plus Medicare Spending per Beneficiary) and per capita costs for beneficiaries with specific conditions.
As in years past, for cost reporting for the 2015/2017 VBPM program, CMS will adjust for the specialties represented in each group and will assign each beneficiary to only one group based on who performed the plurality of primary care or Part B services during hospitalization. However, CMS has changed the attribution methodology for the some of the per capita cost measures, as well as the claims-based outcome measures, to include NPs, PAs, and CNSs. Even with this change, CMS has acknowledged that “certain large single specialty groups — such as those limited to emergency medicine, diagnostic radiology, pathology, and anesthesiology — will not be attributed any beneficiaries under this attribution methodology.” In past years, if fewer than 20 patients are attributed to a group or solo practitioner, that group or solo practitioner would be classified as average cost for purposes of quality tiering.
What You Should Do
For solo practitioners and physicians in groups of 2-9, the most important action point is to ensure you qualify for Category 1 by avoiding the 2017 payment adjustment during the 2015 reporting year. Being in Category 1 will allow you to avoid the automatic 2 percent payment adjustment for VBPM. And since the program is new for you, you will not be subject to any negative payment adjustments through quality tiering.
For physicians in groups of 10 or more, step one is to qualify for Category 1 by avoiding the 2017 payment adjustment. Step two is to begin evaluating your costs through the Quality and Resource Use Reports disseminated by CMS. These reports provide a look at how you are doing in terms of per capita Medicare costs and spending per Medicare beneficiary. These reports are tabulated based on previous years’ data, but they will give you some idea of where you will stand for the coming year.
What Else is New
For the first time, physicians in TINs that participate in the Shared Savings Program, Pioneer ACO Model, CPC Initiative, or other similar innovation center models or CMS initiatives will be part of the 2015 for 2017 VBPM program.
Coming up in 2016 for the 2018 payment adjustment year, the VBPM program will be applied to non-physician eligible providers in groups with two or more eligible providers and to non-physician eligible providers who are solo practitioners.
For more information about the 2015/2017 VBPM Program, visit the CMS website where updated materials are being added regularly. Also, you can review the slides from a recent MLN Connects National Provider Call on the PQRS and VBPM Programs.
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