VBMs: Coming Soon to Either Increase or Lower Your Income

Kenneth J. Terry, MA


February 06, 2014

In This Article

How Much Should You Worry?

Smaller groups won't have a reprieve for very long. Under new regulations in the CMS 2014 physician fee schedule, the VBM will be applied to all groups of 10 or more EPs in 2016, on the basis of 2014 performance. The agency estimates that this change will make 17,000 groups and 60% of physicians subject to the VBM in 2016.[3]

Quality tiering will become mandatory that year. However, groups of 10-99 EPs that report to PQRS will receive either a bonus or no change in their reimbursement; no penalties will be applied to them in 2016, regardless of performance.

How much do you have to worry about when CMS starts penalizing what it calls "poor performers"? A CMS analysis of 2012 quality and resource use data showed that if quality tiering methodology had been applied, about 80% of groups with 25 or more EPs would have been judged "average" and would have no seen no adjustment in their reimbursement. Just over 8% would have earned a bonus, and 11% would have been penalized.[3]

AMA's Reaction to VBMs

The AMA opposes the rapid introduction of the VBM and also objects to key portions of CMS's latest regulations. In its comments on the 2014 fee schedule, the AMA said that with nearly 500,000 doctors subject to the VBM in 2016, "a very large percentage of physicians are likely to see both a 2% PQRS and a 2% VBM penalty." When added to sequester-related and meaningful use penalties, the AMA added, "this could push some older physicians to retire or close their practices to Medicare beneficiaries."[6]

Among other things, the AMA pointed out that:

Proper attribution of patients will be very challenging. CMS has had difficulty attributing Medicare patients correctly even to large multispecialty groups for VBM purposes;

Quality tiering is being mandated before there has been any experience with voluntary quality tiering;

Some VBM quality measures have not been validated for clinical level reporting;

The new cost measure for hospitalizations will penalize physicians whose practices are focused on post-acute care; and

The risk adjustment methods used in the VBM are weak. For example, they don't recognize the impact of multiple chronic illnesses and comorbidities.

Despite its dissatisfaction with the VBM program, the AMA has praised the Congressional committees' efforts to replace the SGR with a value-based payment system.

In a statement emailed to Medscape, AMA President Ardis Dee Hoven, MD, explained, "Bills approved by Senate and House committees to repeal the flawed SGR formula include important financial and administrative proposals that represent short-term improvements over current law governing quality reporting and pay-for-performance programs, which include value-based modifiers."

Dr. Hoven continued, "The AMA has repeatedly argued that the value-based modifier is a flawed concept that cannot be equitably applied across the board to all physicians. The AMA will continue efforts to repeal the value-based modifier initiative, while also seeking to limit potential penalties and eliminate the 2-year lag time between quality assessments and payment adjustments."


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