VBMs: Coming Soon to Either Increase or Lower Your Income

Kenneth J. Terry, MA


February 06, 2014

In This Article

Here Come the First Set of Regulations

According to the VBM regulations included in CMS's 2013 fee schedule, only groups of 100 or more EPs will have their Medicare rates adjusted in 2015, on the basis of 2013 performance. EPs include physicians; dentists; podiatrists; chiropractors; and a wide range of nurses, physician assistants, and other practitioners and therapists.[2]

How groups will be treated depends in part on whether their doctors have reported quality data to the PQRS. Less than one third of physicians have done this so far,[4] but CMS predicts that 40% of doctors who participate in Medicare will report this year.[3] A group may submit clinical data to PQRS through a Web interface or a CMS-qualified registry, or it may choose to have CMS use claims data to measure its physicians' performance.

You can't avoid the VBM simply by not reporting to PQRS. If you don't report, a negative VBM will be ascribed to you. If a practice did not participate in PQRS in 2013, the VBM will cause its Medicare reimbursement rate to drop 1% in 2015.[2] If it fails to report in 2014, its Medicare payment rate will fall 2% in 2016.[3]

In addition, physicians who don't participate in PQRS by 2015 will have their Medicare reimbursement trimmed by 1.5%; the penalty increases to 2% in 2016.[5] So nonreporting practices with 10 or more EPs will see a total cut of 4% in 2016.

Some groups won't be subject to the VBM. It won't apply to groups in which any of the physicians belong to Accountable Care Organizations (ACOs) that participate in the Medicare shared savings program or the Pioneer ACO program. A group is also off the hook if its doctors participate in CMS's Comprehensive Primary Care Initiative.

In the 'first year of VBMs, groups may elect to have CMS apply "quality tiering" to their performance. That means that their quality and efficiency will be compared with national benchmarks. Quality tiering could result in upward, downward, or no payment adjustment. In contrast, groups that don't choose quality tiering will see no change in their reimbursement in 2015.[2]

'The quality tiering option includes 6 per capita cost measures. These include "total per capita cost" and per capita cost for patients with each of 4 conditions: chronic obstructive pulmonary disease, heart failure, coronary artery disease, and diabetes. The 2014 physician fee schedule adds a sixth measure that includes the cost of a hospitalization from 3 days before admission through 30 days after discharge.

These costs, while standardized across geographic areas, will be risk-adjusted to reflect the relative severity of patients' conditions. A physician must have at least 20 patients with a particular condition for a quality or cost measure to be used with that practitioner. Attribution of a patient to a particular group is determined by where the patient receives "the plurality of primary care services," with one exception: For the hospitalization cost measure, the episode of care is attributed to the group whose physicians submitted the plurality of claims.[2]


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