Value Based Payment Modifier

What is the Value-Based Payment Modifier?

The value-based payment modifier (VBM) provides for incentives or penalties to physicians based upon the quality of care furnished compared to cost during a performance period. The "modifier" is not a coding modifier that needs to be added to claims.

1.      VBM Origins

 For the past decade, leadership within the Centers for Medicare & Medicaid Services (CMS) has indicated that it is the goal of the agency to transform Medicare from a passive payer to an active purchaser of higher quality, more efficient health care. CMS has worked to make this change through a variety of initiatives that encourage a focus on quality, such as the Physician Quality Reporting System (PQRS). The value based payment modifier is another step in this transformation. Specifically, the VBM was mandated through Section 3007 of the Affordable Care Act. The legislation indicated that by 2015, CMS must begin applying a value modifier under the Medicare Physician Fee Schedule (MPFS).

 2.      VBM and Doctors of Optometry

Physicians (including optometrists) in group practices of 100 or more eligible professionals (EPs) who submit claims to Medicare under a single tax identification number (TIN) will be subject to the value modifier in 2015, based on their performance in 2013. Physicians in group practices of 10 or more EPs who participate in Fee-For Service Medicare under a single TIN will be subject to the value modifier in 2016, based on their performance in calendar year 2014. All physicians who participate in Fee-For-Service Medicare will be affected by the value modifier starting in 2017, based on performance in 2015.

 CMS Process for Assessing "Quality"

To determine whether an automatic VBM payment reduction will be applied, CMS will first review whether a physician or group practice participated in PQRS. To avoid an automatic VBM payment adjustment, physicians must participate in the Physician Quality Reporting System (PQRS) (www.aoa.org/pqrs) If you do not participate in PQRS, you will receive a payment penalty based on practice size:

  • Groups with between 2 to 9 EPs and physician solo practitioners will receive an automatic negative 2 percent payment PQRS penalty AND a 2 percent VBM payment penalty. (4% total)
  • Groups with 10 or more Eps will receive an automatic negative 2 percent PQRS payment penalty AND a 4 percent VBM payment penalty. (6% total) In addition to PQRS reporting, CMS will also evaluate how a physician performs on certain outcomes measures.

 "Quality Tiering"

Quality-tiering is the methodology that is used to evaluate a physician's performance on quality and cost measures for the VBM. For the CY 2017 VBM (based on 2015 performance), qualitytiering is mandatory for physician solo practitioners and physician groups with 2 or more EPs based on their size in CY 2015. Physician and groups that successfully participate in PQRS will be subject to quality-tiering.

 

Quality-tiering and Solo Practitioners

Based on performance on quality and cost measures in CY 2015, solo practitioners could receive a VBM adjustment in 2017 that is:

  • An upward adjustment of 2 times the Value Modifier adjustment factor, or
  • A neutral adjustment (meaning no adjustment)
  • Solo practitioners are held harmless from any downward adjustment derived under the quality-tiering methodology.

    How will quality-tiering impact my practice if I have 2-9 physicians in my practice?

Groups of 2 or More

Based on their performance on quality and cost measures in CY 2015, Groups with 2 or more EPs could receive a value modifier adjustment in 2017 that is:

  • A maximum upward adjustment of 2 times the Value Modifier adjustment factor, or · A neutral adjustment (meaning no adjustment) in CY 2017 These groups are held harmless from any downward adjustment derived under the quality tiering methodology.

Groups of 10 or More

Based on their performance on quality and cost measures in CY 2015, Groups with 10 or more EPs could receive a value modifier adjustment in 2017 that is:

  • A maximum upward adjustment of 4 times the Value Modifier adjustment factor, or · A neutral (meaning no adjustment), or
  • A maximum of -4.0% downward Value Modifier adjustment to Medicare PFS physician payments for CY 2017

How many of my patients will be included in the CMS assessment of my costs and quality of care?

This will depend on the outcome of the CMS analysis to determine which beneficiaries should be attributed to your practice. Beneficiaries are attributed to you through a two-step process. Under Step 1, beneficiaries are attributed to the group who had a plurality of primary care services (as measured by allowed charges). If a beneficiary is non-assigned under Step 1, CMS proceeds to Step 2, which would assign beneficiaries to the group practice whose affiliated non-primary care physicians provided the plurality of primary care services (as measured by allowed charges). What are the quality measures I will be assessed on for the purposes of the VBM? To determine a practice's quality, CMS will evaluate performance based on certain outcomes measures. Specifically: two composite rates of potentially preventable hospital admissions and the all-cause hospital readmission measure. CMS will not evaluate performance on the all cause hospital readmission measure if a group or solo practitioner has fewer than 200 cases for the measure during the performance period.

Need More Information? Contact Kara Webb at:  kcwebb@aoa.org