When politicians from both sides of the aisle tell you that they are going to cut Medicare payments, especially to doctors that are not providing “value” to the Medicare program, every provider in the country should listen. Now is not the right time to ignore this issue and hope it will go away. It is not going away; in fact, the Obama administration is accelerating the “value-based purchasing program” that is part of the Patient Protection and Affordable Care Act (PPACA) that was passed by Congress and signed into law by President Barack Obama on March 23, 2010 (a major part of what is now colloquially referred to as OBAMA-CARE).

The Center for Medicare and Medicaid Services (CMS) explains that the value-based purchasing program will transform Medicare from a passive payer to an active purchaser of higher quality, more efficient healthcare. “The Affordable Care Act directs CMS to provide information to physicians and medical practice groups about the resource use and quality of care they provide to their Medicare patients, including quantification and comparisons of patterns of resource use/cost among physicians and medical practice groups.”

Sounds good — information is always helpful, right? Wrong, this is not only about information, it is about payment. “Section 3007 of the Affordable Care Act mandates that, by 2015, CMS begin applying a value-based payment modifier under the Medicare Physician Fee Schedule (MPFS).”

  • Both cost and quality data will be used to calculate payments for physicians
  • Doctors will be compared to their peers
  • Every payment will be adjusted up or down based on a single modifier that CMS chooses for a practice
  • Not just a flat rate 1 or 2 percent change in payment

What the Affordable Care Act Means to You

The way the new law works is, beginning in 2015 some medical practice groups or physicians will be subject to a modifier that will change their payment schedule when compared to their peers. By 2017 every provider will be subject to the value-based payment modifier. CMS has not (and maybe will not) provide data on who will be subject to adjustments in 2015 as opposed to the 2017 deadline.

Now you may be thinking – Perhaps I’ll get lucky and they won’t pick me until 2017, and that is over 5 years from now; why worry about something that is 5 years away?

The Obama administration has one more trick up their sleeve. They want to “influence” physician behavior sooner rather than later; they really want to unilaterally accelerate this part of the Affordable Care Act (how else can we afford to pay for insuring all of the uninsured). Here is their solution: the measurement year for the 2015 value-based payment modifier is now 2013, approximately just one year from now. They anticipate that physicians will “be on their best behavior” during the measurement year. So in effect, since providers don’t know if they will be part of the 2015 group or the 2017 group, every provider must prepare to be profiled in 2013. If you believe in the “sentinel effect” (the theory that productivity and outcomes can be improved through the process of observation and measurement), then the Obama administration has accelerated the anticipated savings built into the Affordable Care Act by way of a creative, but not necessarily fair, implementation of the law.

Most of the large medical associations are pushing back against this acceleration, and with good reason. It has become the habit of CMS to de-couple measurement from payment, as they have done with the eRx initiative (measure in 2011 and penalty in 2012). Now this de-coupling has been stretched to a 2-year lag.

The question we are all asking, how is CMS going to profile a doctor? The specifics of how Medicare will calculate payment adjustment modifiers are due in 2012, just months before the measurement period begin. CMS has been piloting some of the value based reporting with medical groups over the past 2 years. Below is a sample summary of data that CMS has used to demonstrate their “physician report card”. The full sample can be viewed on the CMS website.

An Example of Medicare’s Physician Report Card

Medicare Physician Report Card

Practice for the Future

For the past several years the government has been experimenting with quality reporting via the PQRS program. PQRS has had very little impact on physician incomes. Change is coming. It is time to get ready. This year we advise all of our doctors to “practice for the future with PQRS”. Get ready to get measured in ways that you could have never envisioned when you applied to medical school. Get your workflows in place now, monitor your chronic care patients closely, and report to PQRS – you won’t be sorry in a year or two.