Kimberly J. Rask, M.D., PhD is the chief data officer at Alliant Health Solutions, which is a nonprofit companythat supports quality improvement in public sector health care programs under Medicare, Medicaid and End-Stage Renal Disease (ESRD) Networks across the Southeastern U.S. Dr. Rask is a primary care physician andhealth economist.

She also holds joint appointments in health policy and management and medicine at EmoryUniversity. Dr. Rask has published book chapters and peer-reviewed articles on primary care practice, quality improvement, and outcomes measurement.  With more than 20 years of experience in quality research and practice, she also serves on national expert panels on value-based purchasing programs and quality measurement.

The Value-based Payment Modifier (VM) is a relatively new pay-for- performance program that is being used by CMS to pay physicians in part based on how their quality and cost compare to other physicians. It is similar to other pay-for- performance initiatives for hospitals, nursing homes, and home health agencies – and it is part of a larger effort by public and private payers to control health care costs.

Although the VM started as part of the Affordable Care Act (ACA), more recent federal legislation has expanded its reach.  Medicare uses the VM program to adjust physician pay based on quality and cost measures, which vary by specialty. The reimbursement rates for 2016 are based on 2014 Physician Quality Reporting System (PQRS) data.

There are more than 250 quality metrics. Eligible providers are required to select a number of metrics –typically nine – to report. Failure to report PQRS measures can result in a penalty that is applied to all Medicare payments for the entire year. The program is revenue-neutral, so physicians who score well receive higher payments while physicians who have relatively lower scores receive lower payments.

In 2016, only medical groups with 10 or more eligible professionals will be subject to the program. In 2016, all eligible groups could receive a bonus – but only groups with 100 or more eligible professionals face a penalty in 2016. By 2017, the program is scheduled to apply to all Medicare physicians.  Of the nearly 14,000 physician groups that will subject to the VM program in 2016, less than one percent – only 128 groups that include about 4,300 physicians – will receive Medicare bonuses of either 16 or 32 percent; the higher increase will go to the practices with the most high-risk patients.

Meanwhile, more than 5,400 groups that include more than 130,000 physicians will see a two percent pay cut for failing to submit their data. And nearly 60 groups that include more than 10,000 physicians will see a pay cut of one percent or two percent because their quality measures were too low.  Under the MACRA legislation that passed in 2015 that permanently replaced the Medicare sustainable growth rate (SGR) formula, the VM will become one component of a new consolidated performance score.  There will be two payment options for physicians.

Physicians who participate in Alternative Payment Models (e.g., some types of ACOs) will be eligible for an automatic five percent incentive payment every year. Physicians who are not participating in an APM will receive incentives or be subjected to penalties of up to nine percent based on how they perform relative to other physicians on PQRS measures, their use of EHR, quality improvement efforts, and the cost of care for their patients. Since this “new” payment program is similar to the existing VM program, preparing physician practices for success with today’s VM will position practices for success in the future.

There are several programs that available to assist physician practices with accurate quality reporting and quality improvement, which includes Alliant Quality (www.alliantquality.org) in Georgia.