The stage is set for a new era of Medicare payment modification using data self-reported by physicians that measures the quality of their work.  The two programs already in place are the Physician Quality Reporting System (PQRS) and the Value-Based Payment Modifier (VM).  These two will work in concert to determine either a positive, neutral or negative payment adjustment to the basic Medicare fee schedule, generally two years following the reporting year.  Note that the rewards and penalties for these programs are cumulative; failure to meet the PQRS reporting requirements will invoke a penalty under both the PQRS and the VM programs.

Medicare fee schedule payment adjustments in 2015 were already determined by PQRS submission performance in 2013; similarly, 2016 adjustments will be determined by data that was submitted for 2014.  Let’s look at what can be done now, in 2015, to maximize your radiology practice’s Medicare reimbursement for 2017.

Physician Quality Reporting System (PQRS)

The incentive payment phase of PQRS ended with 2014 reporting, and physicians who successfully participated will receive their final 0.5% lump sum incentive payment in 2015.  That same 2014 reporting period will be used to determine whether or not a penalty of 2% will be applied to Medicare payments in 2016.

In order to avoid a 2% negative fee schedule adjustment in 2017, PQRS requirements must be satisfied this year.  Generally 9 measures covering 3 National Quality Strategy (NQS) domains for healthcare quality improvement must be reported for at least 50% of your Medicare patients.  In addition, beginning in 2015, physicians who see at least one Medicare patient in a face-to-face encounter must report on at least one measure from a newly established pool of 19 cross-cutting measures.   Watch for our upcoming article with full details on how to maximize your Medicare reimbursement using PQRS reporting.

Radiologists generally have a smaller pool of PQRS measures to consider based on their specialty.  The American College of Radiology (ACR) provides an updated list of measures and measures groups most used by radiologists.  In 2015, 12 of the most commonly used measures are available through claims-based reporting and 19 are available through registry reporting.  Interventional radiologists and nuclear medicine physicians will need to consider additional cross-cutting measures to support any evaluation and management visits occurring in 2015.  

Value-Based Payment Modifier (VM)

Successful participation in the PQRS program will also allow practices to avoid an automatic negative fee schedule adjustment under the Value-Based Payment Modifier program, and may provide a positive adjustment under the right circumstances.  The VM adjustment is based upon the quality of care furnished by the physician or group, compared with the physician or group’s cost to the Medicare program during the measurement period.  

Similar to the PQRS methodology, the VM will be applied beginning in 2015 for groups of 100 or more physicians based on PQRS reporting in 2013.  In 2016, the VM will additionally be applied to groups of 10 or more physicians based on 2014 PQRS participation.  The VM will apply to all physicians receiving Medicare payments beginning in 2017 based on performance in 2015. 

Since the VM adjustments will be budget-neutral to the Medicare program, they will be upward, neutral or downward using quality-tiering criteria based on industry benchmarks for provider quality and cost performance.  Identifying the appropriate criteria for your radiology practice will be essential to maximizing revenue under this program.  We will have more information about this topic in a subsequent blog article.

In order to apply the value modifier in 2017, physicians and group practices will be divided into two categories based on whether or not they have satisfactorily reported under the PQRS program in 2015:

Category 1 includes those who have met the PQRS requirements. 

• Groups with 10 or more physicians will be subject to quality-tiering methodology making them eligible for an upward, neutral or downward fee schedule adjustment.

• Practices with 1 to 9 physicians will be subject to quality-tiering methodology making them eligible only for an upward or neutral fee schedule adjustment.

• Tables 1 and 2 below show the potential quality-tiering adjustments under Category 1. 

 Category 2 includes those who have not met the PQRS requirements.

• Groups with 10 or more physicians will receive a 4% downward fee schedule adjustment in addition to the 2% fee schedule reduction for PQRS.

• Practices with 1 to 9 physicians will receive a 2% downward fee schedule adjustment in addition to the 2% fee schedule reduction for PQRS.

Meaningful Use of Electronic Health Records (MU-EHR)

The other Medicare program affecting fee schedule reimbursement beginning in 2015 is Meaningful Use of EHR.  This program has been problematic for radiologists who generally do not have control over the electronic health records system in use at their hospitals.  Recognizing this, Medicare has granted an automatic, though temporary, exemption from the penalty for any physician who is enrolled in the Medicare program as a radiologist.  This exemption is currently available through 2019, although it could be reduced, revoked or extended at Medicare’s discretion.  However, a radiology practice that is successfully using a certified EHR may be able to use the EHR to comply with their data submission for PQRS.

Conclusion

In order to avoid any Medicare payment reductions under PQRS and VM for 2017, practices must satisfactorily submit PQRS data for 2015.  Failure to do so will result in a 2017 fee schedule reduction of 4% (2% PQRS plus 2% VM) for practices with fewer than 10 physicians, or a reduction of 6% (2% PQRS plus 4% VM) for groups of 10 or more physicians.  Successful PQRS submission could mean fee schedule increases under the right circumstances.In upcoming articles, Healthcare Administrative Partners will explain the information available in the Quality and Resource Use Report (QRUR), and also provide you with information to select the best reporting method for your practice.  Subscribe to our blog to receive the next in our series of PQRS and VM articles aimed at helping radiology practices maximize reimbursement in this new healthcare economy.

2017 Value-based Modifier Quality-Tiering Adjustments for Category 1
(Practices that have successfully met PQRS requirements in 2015)

• Downward adjustments are fixed percentages that will reduce payments under the Medicare fee schedule.  Upward adjustment percentages will be established after the performance period has ended, and will replace the factor ‘x’ shown in these tables. 
• Practices that have beneficiary risk scores in the top 25% of all beneficiary risk scores will be eligible for an additional 1x in the categories indicated by * in these tables.
• Practices without cost measure scores will be considered to have ‘average’ cost scores for purposes of the 2017 VM adjustments.  The American College of Radiology has reported that there are no cost measures likely to be attributable to diagnostic radiology in 2015, however interventional radiologists who provide Evaluation and Management services might have beneficiary costs attributed to them.

Related Articles:
An Overview of the Medicare Quality Reporting Provisions Affecting Radiology Practice Reimbursements