Value Based Payments and the Physician Quality Reporting System

One of the newest provisions of the Affordable Care Act which went into effect on January 1, 2015 was the provision which ties physician payments to the quality of care that they provide.  The main idea behind this system is to move the physician practice from the model as it was where volume of patients was the focus.  This system had physician practices running to see huge numbers of patients in a day, sometimes double or triple booking to meet this end.  Value-based payments are beginning to be instituted this year to allow these same physicians to slow down and provide more meaningful care to patients than what has been furnished in the past. 

As of 2015, this provision will only apply to practices of 100 or more eligible professionals and is focused only on Medicare providers.  The value based payment model includes an opt-in payment adjustment for those practices which have reported satisfactory measures of quality under the newly instituted Physician Quality Reporting System (PQRS).  The PQRS will quickly become a method by which practices will be able to receive incentive payments, or negative adjustments, over the upcoming years of continued expansion of the Affordable Care Act.  As it stands, the PQRS allows for reporting of different measures by providers such as clinical conditions treated, types of care, settings where care is provided, quality improvement goals for the practice for the year, and other measures yet to be defined.  Physician practice payments will not be affected by this reporting as of this fiscal year, however, they can receive incentives or penalties in the future based upon what they report currently.  As such, those physician practices that do not provide information to the PQRS system in FY 2015 will see only penalty adjustments in the future. 

Forecasting the future is a very important part of what practice managers do.  Realizing the impact of this new system of reporting in current forecasts, budgeting, capital management, and marketing should be at the forefront of operations today.  Doing nothing now will hurt your practice in the future! 

Some important websites with further information:

American College of Physicians. (2013). Value based payment modifier.  Retrieved from: http://www.acponline.org/advocacy/where_we_stand/assets/vii2-value-based-payment-modifier.pdf

Berenson, R.A. (2010). Moving payment from volume to value: What role for performance measurement? Retrieved from: http://www.urban.org/uploadedpdf/412344-moving-payment-volume-value-performance-measurement.pdf

Centers for Medicare and Medicaid Services. (2014). Medicare FFS physician feedback program/Value-based payment modifier.  Retrieved from: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Background.html

Centers for Medicare and Medicaid Services. (2013). Physician quality reporting system (PQRS) overview.  Retrieved from: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/PQRS_OverviewFactSheet_2013_08_06.pdf

Contributed by Dr. Michael Mileski, DC, MPH, MSHEd, LNFA, SJC Faculty