Value-Based Modifier Is Coming: What You Need to Know

These days, no practice can afford to take a financial hit. That’s why it’s important to understand the importance of the Value-Based Payment Modifier, a CMS-imposed qualifier that provides a differential payment to a physician or group of physicians under the Medicare Fee Schedule based on the quality of care provided compared to cost during a performance period.

Medicare will begin to apply this modifier in calendar year 2015 to payments for physicians in groups of 100 or more eligible professionals (EP) who submit claims under a single tax identification number. But this doesn’t mean smaller practice providers shouldn’t stay up on what is going on. Eventually, it will apply to them too.

In its attempt to promote value rather than volume, CMS will essentially use the modifier to either penalize physicians for low quality of care or reward them for providing high quality care, Glade B. Curtis, MD, MPH, FACOG, CPC, CPPM, CPC-I, COBGC, said during the AAPC 22^nd annual HEALTHCON conference in Nashville, TN earlier this month.

“Many or most physicians are probably not aware of the Value-Based Modifier at this point in time,” Curtis said. “However, it’s likely that this modifier will impact all physicians by the year 2017 even if they don’t know about it now.”

What exactly must physicians know about this modifier?

First and foremost, know that the modifier is not optional. Everyone must get on board, Curtis urged attendees. Physicians cannot avoid the Value-Based Modifier by simply electing not to participate in the Physician Quality Reporting System (PQRS).

“If you don’t report [PQRS measures], then you will be assigned a negative value modifier,” he said.

The best way to prepare for the Value-Based Modifier is to get involved in the PQRS as soon as possible, Curtis told attendees. This is particularly true for solo practitioners and smaller groups.

Why? CMS used 2013 PQRS data when determining 2015 payment impact for groups of 100 or more EPs, and there’s no doubt that they will do the same for all other EPs eventually, Curtis said. If EPs in groups of 100 or more did not participate in PQRS in 2013, these providers will receive a 1% decrease in Medicare in 2015. If these groups don’t report in 2014, their Medicare payment rate will decrease by 2% in 2016. These percentages will likely increase over time, he added.

Curtis noted that PQRS measures change annually and generally vary by specialty. Although PQRS and the Value-Based Modifier attempt to qualify and quantify quality of care, doing so often only raises more questions than answers, Curtis said.

“One of the criticisms is that primary care physicians manage a lot of different conditions—up to 400 or more different conditions in a given year,” he said. “These doctors may report to PQRS about only a couple of things, but still they are required to treat many, many different conditions. Many of the PQRS measures, especially for specialists, have little relevance to the competence of the individual doctors.”

There are other concerns, too. Physicians who are labeled as ‘low performers’ may have legal risk during a deposition, for example. “Attorneys and insurers already use reports of federal reimbursement to make decisions in medical malpractice cases to support claims of negligence, so I think it’s a real concern,” he said.

The Value-Based Modifier may also affect patient care—and not in a positive way, Curtis said. Physicians may only respond to incentives and not necessarily make decisions based on the patient’s best interests.

Rather than strive for quality, some professional organizations are instead focusing on how to avoid services that have no value or low value. Curtis cited the Choosing Wisely Campaign, sponsored by the American Board of Internal Medicine Foundation, which encourages physicians, patients, and other healthcare stakeholders to talk about medical tests and procedures that may be unnecessary or even cause harm.

Rather than penalize physicians for low quality care, Curtis said physicians may respond more effectively to value-based relative value units (RVU) that promote quality. These RVUs would reimburse physicians more for cognitive level work rather than procedures.

“I think this is already happening to some degree,” he said. “As we see the reimbursement for procedures go down, we see the reimbursement for office-based activities go up.”

Regardless of how the healthcare industry moves forward with pay-for-performance, Curtis said a comprehensive approach to defining quality is necessary. He urged attendees to consider these questions:

• How do patients perceive quality of care, and how might this affect patient satisfaction scores?
• Will practices cherry pick certain patients who are likely to have better outcomes? For example, might they avoid patients who don’t fill prescriptions or attend follow-up appointments? “Are physicians going to be likely to take on these patients if it’s going to affect their quality evaluation and the money you’re receiving from Medicare?” he said. How will physicians perceive patients insured through Medicaid or health exchange products? If they perceive these patients as more likely to have poorer outcomes, might they avoid treating them?
• Will physicians only respond to quality of care incentives and not make decisions based on the best interests of the patient?
• How can practices ensure quality of care on an ongoing basis even despite CMS measures for reporting?

For more information about the Value-Based Modifier, view presentation slides from a CMS National Provider Call held on August 2, 2012.