PQRS Medicare Payment Adjustments Waived After ICD-10 Update

December 19, 2016 - Some eligible professionals and group practices will not receive Physician Quality Reporting System (PQRS) Medicare payment adjustments in 2017 and 2018 because of the recent ICD-10 update, CMS recently announced in an email.

The announcement (via AHA News Now) stated that the addition of 5,500 new ICD-10 codes will affect the federal agency’s ability to process some quality measure data for the last quarter of 2016. Therefore, CMS will not administer Medicare payment adjustments for PQRS participants who fail to satisfactorily report because of IDC-10 coding updates.

CMS updated ICD-10 on Oct. 1 by thawing the freeze on adding new codes and eliminating coding flexibilities. On top of over 5,000 new codes, the federal agency enforced a rule that would allow review contractors to deny a claim if a submitted ICD-10 code is not specific enough.

The recent ICD-10 update was the first major change to the system since its implementation in 2015. Coding updates usually occur every year, but CMS halted the addition of new codes in the immediate years before ICD-10 implementation to ensure a smooth transition for providers.

However, the recent update caused 2017 fiscal year updates and revisions to contain ICD-10 coding changes since the last complete overhaul of the system on Oct. 1, 2013.

As a result, CMS anticipates data processing challenges at the end of 2016 for certain quality measures, which will impact PQRS and Value Modifier payment adjustments.

Under PQRS, the 2016 calendar year is the performance period for both 2018 PQRS and Value Modifier Medicare payment adjustments. The past year was also the performance period for eligible professionals who were included in a Medicare Shared Savings Program accountable care organization (ACO) participant Taxpayer Identification Number in 2015 and are reporting apart from their ACO for the special secondary reporting period.

To resolve some of the quality data processing challenges, CMS will not negatively adjust Medicare reimbursement to PQRS eligible professionals and group practices based on quality performance reporting requirements for 2016.

Generally, PQRS participants that fail to report quality performance or do not report according to program requirements automatically face a negative Medicare payment adjustment. In 2017, CMS plans to penalize non-reporting participants up to two percent of their Medicare reimbursement.

In terms of the Value Modifier program, CMS plans to “consider solo practitioners and groups, as identified by their taxpayer identification number (TIN), who meet reporting requirements in order to avoid the PQRS payment adjustment (either as a group or by having at least 50 percent of the individual eligible professionals in the TIN avoid the PQRS adjustment) to be ‘Category 1,’ meaning they will not incur the automatic downward adjustment under the Value Modifier program.”

Only 59 eligible group practices out of 8,395 in the Value Modifier program received a negative Medicare payment adjustment between one and two percent in 2016, CMS reported in March. The majority of groups (8,208) did not see any change in Medicare reimbursement because of neutral performance of insufficient data.

CMS added in the recent announcement that eligible professionals should submit electronic clinical quality measures (eCQMs) corresponding to the 2015 versions of the measure specifications and value sets for the last quarter of 2016.

Additionally, CMS plans to release an addendum for the 2017 PQRS performance period including updates to ICD-10 value sets for eCQMs in the Merit-Based Incentive Payment Systems. Providers should expect more information on PQRS later this year.

Dig Deeper:

• How to Participate in the Physician Quality Reporting System

• What Is Value-Based Care, What It Means for Providers?