Physician Practice

Quality reporting programs no longer voluntary for many physicians, penalties increase

Physician Practice Insider, June 30, 2015

by John Castelluccio, Editor
Physicians will see some significant penalties on Medicare Part B covered payments in 2017 if they don’t get on board with CMS’ major quality reporting programs this year.
The Physician Quality Reporting System (PQRS) operates on a two-year review cycle and physicians who didn’t satisfactorily report data on quality measures in 2013 have already seen penalties in 2015. For those physicians, the situation is about to get worse—eligible professionals and group practices face 2% negative payment adjustments in 2017 just for non-participation.
Large physician groups with 100 more eligible professionals will also face separate automatic penalties under a related program for value-based care and further reductions in payments if they don’t meet national averages on quality and cost.
In addition to PQRS, the Affordable Care Act (ACA) introduced a value-based payment modifier (VBPM) to the Medicare Physician Fee Schedule for Part B payments to eligible professionals. The modifier is based on participation in PQRS and calculates either positive or negative payment adjustments for physicians depending on how they perform on quality and cost metrics.
The VBPM was introduced only to large physician groups in 2015, but will be rolled out to everyone else by 2017. Ultimately, group practices of 10 or more eligible professionals could see adjustments as low as -4%—CMS hasn’t set a positive adjustment factor yet—while solo practitioners or groups of nine or fewer would be held harmless from penalties but be eligible for up to 2% bonuses. Non-participation in PQRS or a group reporting system automatically equals a separate 1% penalty.
Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs are another major avenue for awarding bonuses or penalties to eligible professionals based on Meaningful Use (MU) of electronic patient records. The programs operate hand-in-hand with PQRS. Elements of PQRS involve use of EHR for reporting and those systems can also incorporate support and guidelines based on CMS requirements.
In general, eligible professionals include physicians, practitioners, and physical or occupational therapists.
Pros and cons of participation
Jennie Hitchcock, CMPE, COO, president of Compass International Resources, Inc., a consulting firm in Knoxville, Tennessee, says the relative success of the programs really depends on which physicians you ask and how you define quality.
“In my opinion, most of the PQRS measures reflect care that is necessary to reduce preventable healthcare costs,” she said. “For example, we all know that diabetes is a very costly disease, particularly if left untreated. Tracking to ensure that diabetics get the right monitoring and examinations can help prevent future complications.”
Hitchcock said physicians she’s worked with to monitor their frequency of various elements of diabetic care are often “shocked” to discover they aren’t providing all testing and care necessary to prevent future complications—services such as eye and foot exams and regular blood sugar monitoring.

“Once they started getting reports about these elements of care, practices were motivated to put systems in place to make sure patients get all of the services they needed to manage the disease,” she said.

On the other hand, Jeffery Daigrepont, EFPM—a senior vice president at The Coker Group, a national healthcare consulting firm based near Atlanta—says the sentiment he’s most often heard from clients who volunteered for the program the past several years is that it’s a lot of extra work for very little reward.

For the past few years, PQRS incentive payments were gradually scaled from 2% in 2010 down to 0.5% by 2012. As a result of President Barack Obama’s sequestration order in 2013, spending on program incentives was cut by 2% and led to the expiration of bonus payments after 2014. Incentives still exist under VBPM and MU.

“Most of my clients have mixed feelings about this, with most feeling like the return of effort is not worth it,” said Daigrepont, but noted that rationale may change if penalties increase significantly in the future. Now, physicians may just weigh the pros and cons and decide to take the hit, he said.

“If the amount of extra work takes away from productivity this will be very hard to justify [participation],” he said. “Some may even argue that the extra time would be more financially rewarding to just spend it seeing more patients and skipping PQRS altogether.”
Some are prepared, some aren’t

The progression to mandatory reporting was predictable, said Hitchcock, who’s worked with physician groups since CMS first proposed the Physician Voluntary Reporting Program in 2006.

Those who started early are well prepared for the current environment, she said, but there are other physicians—particularly solo practitioners or small practices—who have never participated in any quality reporting program and don’t have EHRs. They’re struggling, she said, not to mention these practices are already often struggling financially as well.

Hitchcock said some of her clients are experiencing negative PQRS adjustments this year, and that typically gets their attention to seriously think about participating.

Noteworthy are the 2015 VBPM results CMS just released on June 16. The report’s key findings show that of 1,010 large physician groups subject to the value modifier, only 14 will see upward payment adjustments based on quality-tiering, while 330 groups are penalized for unsatisfactory reporting or non-participation, and 666 groups receive no adjustments. The report said 288 groups were penalized for not registering for a Group Program Reporting Option.
Incentives continue to evolve

If that convoluted interplay of programs wasn’t challenging enough for physicians to navigate, Joel Brill, MD, AGAF, FASGE, FACG, CHCQM, Chief Medical Officer at Predictive Health, LLC, in Phoenix, points out those programs will likely be absorbed into a new incentive-based payment program under the Medicare and CHIPS Reauthorization Act (MACRA), which was signed into law in April 2015.

The MACRA legislation replaces the Sustainable Growth Rate reimbursement formula with a new Merit-Based Incentive Payment System (MIPS) that rolls in existing public reporting programs and uses bigger incentives to push physicians toward alternative payment models, such as Accountable Care Organizations (ACO).

When MIPS payments begin in 2019, eligible physicians could see 4% positive or negative adjustments on Part B payments based on their scores across four reporting categories. That figure increases to 9% in 2022, and meanwhile, physicians who participate in performance-based contract ACOs could see an additional 5% bonus.

PQRS, VBPM, and MU are slated to continue as separate programs for the next few years, but Brill points out CMS may modify those programs in anticipation of MIPS. He wonders if physician groups will continue to use PQRS in the meantime to avoid the penalty or just focus on developing alternative payment models.

“Collecting data and reacting to it is a big change in the way doctors and hospitals do business and the entire healthcare industry is still adjusting,” Hitchcock said. “But if we can find the right things to measure to improve health and healthcare costs, it will be worth all of the effort.”

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