Monday Musings

Last week I talked about the announcement by the Obama administration that CMS intends to tie 50% to 90% of physician reimbursement to some sort of quality based system by 2018. It’s no secret that we are being waved off the highway we’ve been on for many years onto the unfinished exit ramp of a new payment system. They are still working it out, but it has already started. CMS is in a hurry because Medicare is bankrupt.

The Physician Quality Reporting System (PQRS) was actually the first phase of US healthcare payment reform efforts focused on shifting reimbursement away from volume based pay to one based on value and quality. It began as a voluntary bonus program in 2008 called the Physician Reported Quality Initiative (PQRI) but this year (2015) bonuses end for reporters and penalties begin for non-reporters. Clinicians who do not satisfactorily report data on quality measures on Medicare patients will be subject to a “negative payment adjustment”. How much of a financial penalty are we talking about?

Clinicians who did not participate in PQRS in 2014 will lose 1.5% of their Medicare revenue in 2016. So, if you did not participate last year, you cannot avoid a financial penalty next year. However, if you do NOT participate again in 2015, the penalty for not reporting increases to 4%. Maybe 4% is still not enough money at stake to get your attention. Clinicians who have not adopted a certified electronic health record (EHR) and demonstrated “Meaningful Use” face a potential reduction of another 1.0% of Medicare payments. That penalty increases 1% annually to 3% in 2017 and beyond. Electronic prescribing (eRx) is a requirement for EPs to achieve Meaningful Use. There is an additional 2% reduction in Medicare payments for not using eRx. Depending on when and what you might have attested to, you could be facing a 6% to 8% reduction in your 2016 payments for not successfully participating in any of these programs in 2015.

In fact, a much higher percentage of your revenue is actually at stake. Under The Affordable Care Act (ACA), otherwise known as Obamacare, CMS is required to begin applying a value modifier (VM) to the Medicare Physician Fee Schedule. Both cost and quality data are to be included in calculating payments for physicians. In 2015, the only practitioners to experience the VM are those in group practices of 100 or more. In 2016, CMS intends to apply the value modifier to solo practitioners. The maximum potential “payment adjustment” is 4%. Just to be clear, whether you pay a VM penalty as high as 4% or receive a bonus (of a maximum of 2%) is determined by your PQRS performance. It’s hard to keep up with the math, but the penalties begin to add up quickly—easily beyond 10% of your Medicare payments in 2016, BEFORE the announcement by HHS that it intends to tie at least 30% of payment to quality by 2016. In the simplest terms, if you have participated in no quality programs to date and done note meaningful use attestation, you are likely to lose about 10% of your billing in 2016. You might want to pay attention to future posts about PQRS.

Here’s a link to my most recent article on the subject in “Today’s Wound Clinic”