Get on the bus!

From Ben Hohmuth MD, Class of 2012:

PHYSICIAN VALUE BASED PURCHASING

Earlier this week, Kaiser Health News ran a story prompted by the recent delivery of Quality and Resource Use reports (QRUR) to physicians in Kansas, Missouri, Nebraska and Iowa.  This is part of an effort by CMS to link physician pay to the quality and cost of the care that they deliver.  In other words:  physician value-based purchasing.  This is of course consistent with the broader CMS strategy of continuing to move from the role of passive payer to active purchaser of health care services.  By January 1st, 2017 each physician will have a modifier applied to their Medicare claims which will directly impact the dollars that they receive.

There is an evolution and timeline behind this.  The Physician Quality Reporting Initiative (PQRI) began in 2006 and initially rewarded doctors who self reported their performance on a subset of approved measures of care.  How often the proper care was provided did not factor into the incentive payment, only whether you reported it mattered.  PQRI was renamed PQRS (initiative became system as this is now a permanent part of Medicare) in 2011.  PQRS will now publically report physician participation in the program and what began as a carrot will become a stick by 2015 at which point what began as a positive payment adjustment becomes negative.

Percentage of Total Allowable Medicare Charges Applied to PQRS Payment:

  • 2011: 1%
  • 2012: 0.5%
  • 2013: 0.5%
  • 2014: 0.5%
  • 2015: negative1.5% payment adjustment
  • 2016: negative 2% payment adjustment

Another component of physician value based purchasing is the physician feedback program which is slated to apply to all physicians by 2015 and is being rolled out in the four previously mentioned Midwestern states this year.  Essentially CMS will use PQRS and claims data to score doctors on their individual quality and cost of care relative to their peers.  Attribution for quality and cost on the QRURs is based on outpatient office visit fee for service Medicare claims.

The above information is what determines which of four boxes a physician will be placed in:

  • high quality, low cost
  • high quality, high cost
  • low quality, low cost
  • low quality, high cost

Which of these boxes you are in will determine your value-based payment modifier that will be applied to your Medicare charges starting January 1st, 2017.  Of note this will be a zero-sum game with winners and losers.  The “winners” will be the high quality, low cost providers.  The table below uses completely fictional numbers but conveys the basic idea.  Note that the average fee does not change.

MODIFIER 2012 PAYMENT 2017 MODIFIED PAYMENT
High quality, low cost $200 $220
High quality, high cost $200 $210
Low quality, low cost $200 $190
Low quality, high cost $200 $180
AVERAGE FEE $200 $200
  I don’t hear any doctors at my hospital talking about this, and suspect it is not high in the radar for most practicing physicians.  It does seem to be a fairly radical shift that will have a significant impact.  Although I wholeheartedly support the intent and spirit of this effort, I do have concerns about the validity of the measures and the potential impact on individual physicians.  It is not clear to me that the measurements will truly reflect quality or that the attribution model will truly measure the impact of individual providers on a patients care.  That being said, as a provider I think it will be in our best interest to understand what’s coming and consider getting on the bus rather than getting run over. 
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