Policy & Regulation News

How Will the Value-Based Payment Modifier Impact Quality

By Jacqueline DiChiara

The Centers for Medicare & Medicaid (CMS) posted results this week from first-year implementation of the Value-based Payment Modifier (VM), which rewards physicians who provide economical and valuable care. The Value Modifier – part of the Affordable Care Act (ACA) – also uses financial incentive for physicians and groups of physicians who fail to report quality measures to begin doing so.

In 2015, Medicare payment increases will be granted to 7,000 physicians among 14 group practices nationwide, write Sean Cavanaugh, CMS Deputy Administrator & Director, and Patrick Conway, MD, Deputy Administrator for Innovation and Quality & CMS Chief Medical Officer.

The methods in which payers are paid are in the midst of revision. Value over volume is an essential focal point as new healthcare improvements are implemented.

The most common type of group practices receiving Medicare payment increases under the Medicare Physician Fee Schedule are those recognized as providing high quality care with costs on par with national benchmarks, Cavanaugh and Conway maintain. The other type is low-cost groups recognized as meeting the average quality performance in comparison with national benchmarks.

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  • Physician groups that failed to meet the requirements of quality reporting generally experienced a decrease in Medicare payments. The majority of physician groups’ Medicare payments will not be affected, they add.

    According to Cavanaugh and Conway, VM is focused on three specific areas: improving payment for providers, revolutionizing care delivery, and supporting better consumer and provider decisions.

    VM’s objectives to generate excellent, cost-effective care via shared accountability along with similarly adapted programs directly align with HHS Secretary Sylvia M. Burwell’s recent announcement of a goal and timeline to tie 85 percent of traditional Medicare payments to quality or value by 2016 and 90 percent by 2018.

    These recent HHS developments, as RevCycleIntelligence.com reported last week, demonstrate value-based care plays a meaningful role in the federal agency’s future plans.

    There will be many upcoming changes related to the VM within the next several years, say Cavanaugh and Conway. Next year, quality-tiering subject will automatically apply to groups with at least ten eligible professionals. In 2017, the VM will apply to all groups, including physician solo practitioners. In 2018, CMS will also begin applying it to non-physician eligible professionals.

    “The Value Modifier is being phased in, and beginning with the 2016 Value Modifier, quality-tiering will be mandatory for all groups and solo practitioners when they become subject to the Value Modifier (although small groups and solo practitioners will initially be held harmless from downward adjustments under the quality tiering methodology during the first year in which it applies to them),” as concluded within the VM results.