With calendar year 2015 close out in the books and 2016 rapidly unfolding, it’s not unreasonable to expect more turbulence and ensuing challenges for the practice. While there are numerous issues, the evolving Value-Based Payment Modifier (VBPM) is generating increasing interest. The reason is simple – it is setting the stage for future payment models, both incentives and penalties. Rest assured the practice management environment remains, at best, a challenge with growing minefields. However we continue to see an increasing understanding at the practice level that to survive requires defining critical issues and innovative team driven business solutions. Below is a brief summary of key points to assist with successfully navigating the developments.
- Value-Based Payment Modifier (VBPM)
- VBPM Program, created as a part of the Affordable Care Act (ACA) introduces value-based reimbursement for physician services in the Medicare program. Key incentives rewarding providers who delivered high-quality care at lower costs, and leveling penalties to other providers for delivering what CMS defines as low-quality care at higher costs.
- Similar to PQRS, VBPM adjustments will affect future Medicare payments two years after the reporting year. The current 2016 reporting will determine payment adjustments under the 2018 VBPM. Since the 2015 implementation, VBPM has been phased in by practice size and provider type.
- For 2016 reporting year, VBPM applies to all physicians and certain non-physician providers (NPPs) for the first time. This includes physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists.
- VBPM payment adjustments will be determined, evaluated and applied at the group practice level, using the group’s tax ID number (TIN).
- CMS will determine whether the group satisfactorily reported PQRS data for the reporting year. If not the group a will face a VBPM penalty ranging from -2%-4% based on the size of the practice. A key point: this penalty is in addition to the -2% PQRS penalty assessed for not successfully reporting quality data.
- If the group practice is determined to be a satisfactory PQRS reporter, because: 1) group successfully reported through the GPRO, or 2) at least 50% of practice providers successfully reported as individuals, the entire practice will avoid the VBPM penalty, and its payment adjustment will be determined using CMS’s quality-tiering methodology which is still under review.
- VBPM is fundamentally comprised of two equally-weighted components: 1) Quality composite score and 2) Cost composite score.
- The quality composite score is predicated on PQRS quality measures and quality outcomes measures related to preventable hospital admissions rates for certain chronic and acute conditions, and all-cause hospital readmissions.
- The cost composite score is based on total per capita Medicare Part A and Part B costs; Medicare costs per beneficiary and per capita costs for certain other conditions.
- Cost measures are calculated from claims submitted during the reporting year.
- Based on how the group’s score compares to national benchmarks, practices will be classified as having provided 1) high quality-low cost care, 2) average quality-average cost care, or 3) low quality-high cost care.
- Groups will see an upward, neutral, or downward payment adjustment applied to their 2018 Medicare payments. Ranges from -4% to +4x depending on size and composition of providers in the practice
- ‘X’ represents an additional upward adjustment of 1.0 groups determined to have provided the highest quality of care at the lowest costs may potentially earn.
- Due to the budget-neutral nature of the VBPM Program, 1.0x will be determined by CMS based on cumulative 2016 VBPM penalties.
- Will Medicare penalties apply to providers who switch practices?
- Beginning in 2015, incentive payments for successful participation in PQRS are no longer available.
- Instead, EP and group practices will focus solely on avoiding penalties. Additionally, EPs’ and group practices’ participation in PQRS will be used to determine whether they avoid an automatic VBPM penalty for not participating. Simply if an EP or group practice does not successfully participate in PQRS, the EP or group practice could potentially be subjected to a double penalty under PQRS and the VBPM.
- As practices recruit new physicians and practitioners, and the PQRS and VBPM programs shift into the dual penalty phase, a number of what if’s surface including:
- What if a provider leaves a practice in between the performance and penalty year?
- Does the penalty follow them to their new practice?
- How will you manage new providers bringing penalties to the practice?
- Yes, for now, there are more questions than clearly defined rules of engagement
- Quick Review of PQRS and VBPM penalties:
- PQRS: PQRS penalties are tied to an EP’s unique tax identification number (TIN)/national provider identifier (NPI) combination, regardless of whether the EP reported PQRS quality measures individually or as group practice via the Group Practice Reporting Option. The PQRS penalty applies to all of the individual EP’s or group practice’s Part B covered professional services under the Medicare Physician Fee Schedule (MPFS). The PQRS penalty applies if an individual EP or group practice either does not participate in PQRS or does not successfully meet the reporting criteria for PQRS during a defined performance year.
- VBPM: CMS will apply any VBPM penalty at the group practice level based on the group’s TIN. Any VBPM adjustment is applied at the TIN level to the MPFS items and services billed by physicians under the TIN. The VBPM is determined partly on an EP’s or group practices’ performance in PQRS.
- Both programs: Have a two year look back between the penalty year and the performance year i.e., EPs are subject to a negative 2% PQRS penalty in 2017 based on their 2015 performance. Similarly, EPs’ PQRS participation in 2015 will be used to determine their 2017 VBPM penalty. These policies currently raise a number of questions and we can expect future final rules.
While we continue to see unprecedented change, one thing remains constant – The financial health of the practice is essential to maintain quality care delivery and desired income levels.
In closing successful practice management is at best not easy and growing more demanding and more complicated each day.
If you would like to discuss these or other practice issues, please contact us direct at 800-972-9298 extension 129 or e-mail me at lkemp@prsdata.com
