Earlier this month, the Centers for Medicare & Medicaid Services (CMS) released the 2016 results for the Value-based Payment Modifier (VBP Modifier) Program which provides for differential payment to physicians and physician groups under the Medicare Physician Fee Schedule (PFS) based on certain quality and cost metrics.
The Affordable Care Act directed CMS to begin providing feedback to physicians and physician groups about the quality of care they provide and their use of resources, including comparisons against other physicians and physician groups. CMS uses this data to, among other things, determine and apply a VBP Modifier to payments made to physicians and physician groups based on the quality and cost of care furnished to Medicare beneficiaries. The VBP Modifier is an upward or downward adjustment made on a per claim basis to Medicare payments for items and services under the PFS. Because the program is required to be budget neutral, the amount of the upward adjustments are calculated based on the anticipated savings from physicians and groups that receive a downward adjustment for poor performance or failure to adhere to the program requirements.
CMS began by applying a VBP Modifier in 2015 to physician payments for groups of 100 or more eligible professionals, based on the performance data collected from the Physician Quality Reporting System (PQRS) for calendar year 2013. Physicians subject to the VBP Modifier were required to register for the PQRS in 2013 and meet minimum reporting requirements. Groups that did not meet these requirements received an automatic 1.0% downward adjustment to their Medicare PFS payments in 2015. Of the 1,010 large groups that were subject to the VBP Modifier in 2015, only 14 groups received increased payments (a roughly 5% increase per group) and 11 groups received payment reductions of up to 1% due to poor performance. 319 groups received an automatic payment reduction of 1.0% for not adhering to Medicare's reporting requirements.
This year, the VBP Modifier applies to groups of physicians with 10 or more eligible professionals and is based on 2014 performance data. CMS has determined the upward payment adjustment factor this year is 15.92%. Of the 13,813 physician groups subject to the program this year, 128 groups exceeded the program’s benchmarks in quality and cost efficiency, and physicians in these groups will receive an increase of 15.92% or more in their payments under the PFS. 59 groups will see a 1.0% or 2.0% decrease in their 2016 Medicare payments for poor performance and 5,418 groups failed to meet minimum reporting requirements and thus will automatically receive a 2.0% decrease in their 2016 Medicare payments. For 8,208 groups that met the minimum reporting requirements, payments will remain unchanged in 2016.
In 2017, the VBP Modifier will be applied to all physicians, and in 2018 the VBP Modifier will also apply to payments made to non-physician eligible professionals. In 2017, individual physicians and groups with two or more eligible professionals will receive an automatic 2.0% downward adjustment in PFS payments for failing to participate in the PQRS program in 2015. Groups with 10 or more eligible professionals that failed to report in 2015 will receive an automatic 4.0% downward adjustment in their 2017 payments.
Although it appears that receiving an upward payment adjustment to PFS payments for exceeding CMS’s quality and cost benchmarks is a long shot, the cost for failing to participate in the program continues to escalate. CMS has not yet published the details on how the VBP Modifier will be applied in 2018.