Do you continue to struggle with the importance of the Physician Quality Reporting System (PQRS) and how it applies to the Value-Based Modifier program (VBM), but more importantly how it affects your practice? PQRS and VBM are inter-related, but distinct programs and where criteria must be satisfied in each separate program. Each of the programs are structured to provide quality care to patients while keeping costs under control. Furthermore, CMS has designed quality reporting under the VBM to reward providers who surpass PQRS measure benchmarks, and penalize those who fall behind.

VBM is designed to assess both quality of care furnished and the cost of that care under the Medicare Physician Fee Schedule. The quality composite score will be calculated based on measures reported through PQRS. This "Quality Tiering," will determine if group performance is statistically better, the same, or worse than the national mean in order to reward or again penalize a group.

Rewards and Penalties
Per CMS, PQRS and the VBM must remain budget neutral, meaning that the penalties taken may not exceed incentives paid. As we know, those who failed PQRS in 2014 were automatically penalized with a negative 2.0% this year, and a corresponding 2.0% penalty for the VBM program; equaling a negative 4.0% total penalty for eligible professionals (EPs). For groups with ten or more, the VBM penalty could be greater for low quality and high cost outcomes. This has a direct impact not only on revenue but the status of the EP on the physician compare site.

Only those EPs who succeed in reporting PQRS and can demonstrate significantly better quality and/or cost then their peers will receive the VBM incentive payment. Sounds easy, but, how does the program handle the distribution of incentives when so many continue to fail PQRS? CMS is required to "adjust" the amount paid in incentives to ensure that all of the penalties have been re-distributed. So, essentially, those that ignore PQRS or continue to fail are not only being penalized but their incentive is being given to their physician counterparts that perform higher quality of care at a lower cost.

In fall of 2015, CMS released its 2015 PQRS measure benchmarks, which is based on its analysis of all 2014 data. The release of this information each year is intended to help EPs and groups understand how the measures they plan to report for PQRS will score compared to others across the country. This will tie to their reimbursement rate, via the VBM. The benchmarks can help you determine the overall health of your practice and can help determine how prepared you are for the next program year.

Ways to Successfully Report PQRS and VBM
The financial health of your practice is affected not only by PQRS but VBM, so what can you do to improve your odds? Be aware of taking the easy way out. In the end, those who succeed under the program are those that exceed the program measures and choose outcome measures that distinguish performance; this will set you apart from your peers. EPs must become more engaged in the process and choose performance measures that not only impact quality scores and tiering but improve how healthcare is delivered to patients.

Additionally, make sure that you are ready and currently engaged in PQRS 2016 reporting requirements and the collection of data for reporting. To help plan, download your latest Quality Resource Use Report (QRUR) and review your results. It's important to identify areas where you not only excel but also areas where you may fall below the CMS mean. This will help you establish important process improvements.

Finally, participate in PQRS. Participation remains voluntary for EPs and groups, however, VBM relies on PQRS measures reported by physicians for quality performance analysis. This also means that those providers who do not participate in PQRS will be further impacted by VBM. As described above, EPs will see a double penalty—one reduction for not participating in PQRS as well as an additional reduction under the VBM for not participating in quality reporting.

Navigating through PQRS and VBM can be a challenge to EPs and group practices. The right vendor partner who has experience and knowledge can help guide you through the challenges of today and the changes that will come in the near future.