Experience. Integrity. Advocacy.
Experience. Integrity. Advocacy.

Overview of Upcoming Medicare Penalties

As the Centers for Medicare and Medicaid Services (CMS) moves deeper into penalty phases for many of its quality programs, many physicians face significantly reduced Medicare income in the coming days, especially when considered in aggregate.

The chart below outlines the coming Medicare payment adjustments, including the ongoing 2 percent sequestration adjustment applied broadly to many federal government programs. As you can see, physicians who do not participate in the Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier (VBPM), and Meaningful Use (MU) of Electronic Health Records can expect a 13 percent reduction in Medicare payments by the year 2019.

 Reporting Year


2014 2015 2016


 Payment Year


2016 2017 2018




2.00% 2.00% 2.00%


 Value-Based Payment Modifier*


2.00% 4.00% 4.00%


 Meaningful Use**


2.00% 3.00% 4.00%




0.00% 0.00% 0.00%




2.00% 2.00% 2.00%




8.00% 11.00% 12.00%


Participation in each program varies, and though incentives are no longer available for PQRS or eRx, providers can still take advantage of Medicare EHR incentive programs (if you began by 2014) and VBPM. Also, successfully participating in PQRS ensures providers don’t receive automatic payment adjustments in the VBPM program. Visit http://www.cms.gov/Medicare/Medicare.html for more information about these programs, or contact CIPROMS today and let us help you navigate these programs and avoid reduced Medicare payments.


*The VBPM program is ramping up. Only groups of physicians with more than 100 physicians were affected for 2013/2015, and only groups with more than 10 physicians, for 2014/2016. Also, since 2015/2017 is the first year for participation for solo practitioners or groups of physicians up to 10, those physicians are limited to a maximum of 2 percent penalty for non participation. Penalties for this program have not been specified after 2017, but the program is intended to continue.

**The Meaningful Use program reporting periods vary by year and according to adjusted guidelines to allow for technology variations. Also, payment adjustments will stop at 3 percent for 2017 and following if more than 75 percent of eligible providers are meaningful users by that time.

***The eRx Incentive Program concluded in 2013, with final payment adjustments applied in 2014. The eRx guidelines were included as an add-on to Meaningful Use for the 2013/2015 program year.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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