Massachusetts Medical Society: Medicare's Value-Based Payment Modifier

Medicare's Value-Based Payment Modifier

What is the Value-Based Payment Modifier?

Section 3007 of the Affordable Care Act mandated that, by 2015, CMS begin applying a value modifier (VM) under the Medicare Physician Fee Schedule (MPFS). The agency plans to make payment adjustments in 2015 based on physician performance in calendar year 2013.

Practices included in the initial year of implementation will face a 1% VM reduction in 2015 payments if they do not participate satisfactorily as a group in Physician Quality Reporting System (PQRS) in 2013.

Successful PQRS participants then have the option of participating in a “tiering” process that can result in neutral, positive or negative adjustments. CMS defines the value modifier as differential payment based on the quality of care furnished compared to cost during a designated performance period. Thus, today’s data will impact the 2015 adjustment.

Who will be impacted by the Value Modifier?

Physicians in groups of 100 or more physicians and other PQRS-eligible professionals as of October 15, 2013 who submit claims to Medicare under a single tax identification number will be subject to payment adjustments in 2015 based on their performance this year.

By 2017, CMS plans to extend the Value Modifier to all physicians who participate in fee-for-service Medicare.

My group has 100 or more physicians, what do we have to do?

Groups with 100 or more physicians must register before October 15, 2013 (registration closes on October 15, 2013). Groups will choose one of three PQRS reporting methods (web interface, registry or CMS-calculated administrative claims) in order to avoid a negative 1% payment adjustment in 2015. Groups also can voluntarily choose to participate in a quality tiering option which compares their performance to the national average.

Groups that chose to participate in the quality tiering option could see a positive, negative or neutral payment adjustment depending on performance. For example, performance that is determined to be better than the national average will result in a positive payment adjustment and payment below the national average will result in a negative payment adjustment of up to 1%.

There are three payment adjustment tracks based on Value Modifier registration options

  1. 0% Payment Modifier: Groups register for PQRS GPRO via web interface, registry or CMS-calculated admin claims, and meet the minimum reporting requirement
  2. Potential 1% positive payment adjustment: Groups register for PQRS GPRO via web interface, registry or CMS-calculated admin claims, meet the minimum reporting requirement and elect the quality tiering calculation
  3. 1% negative payment adjustment: Group does not register and does not meet the minimum PQRS reporting requirement

Other Key Considerations

  • If the physicians in your group of 100 or more eligible professionals are currently participating in PQRS as individuals, you must register as a group and elect the Administrative Claims reporting mechanism by October 15, 2013 in order to avoid the 1% payment reduction.
  • CMS will distribute physician feedback reports in September, 2013 at the TIN level to all groups of physicians with 25 or more eligible professionals based on 2012 data. These reports will include a first look at the methodologies for the Value Modifier and how it may impact payment based on reporting mechanism.
  • Physician Feedback reports based on calendar year 2013 data will be disseminated in the fall of 2014 and will serve as the basis of the Value Modifier in 2015. The reports will contain the equality and cost measures, performance and benchmarks and value modifier amount.

MMS Related Actions

The MMS continues to work with the AMA, state medical societies and other national organizations to oppose the VM provision. As part of MMS’ advocacy on the Medicare SGR reform bill, we are urging Congress to coordinate any new quality and efficiency reporting programs with those that already exist.

For additional detailed information visit Medicare’s Summary of 2015 Physician Value-Based Payment Modifier Policies:


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