Published June 27, 2013

The PQRS Train HAS NOT Left the Station

Whatever you call it – quality initiatives, pay-for-performance, or value-based payments – the concept of paying providers based on quality instead of straight fee-for-service is a growing and likely permanent change to the healthcare reimbursement landscape.

The Physician Quality Reporting System ( PQRS ) (formerly known as the Physician Quality Reporting Initiative or PQRI ) was one of the first efforts at measuring and rewarding quality. It began in 2007 with 74 available measures and a potential incentive of 1.5% of allowed Medicare payments. Six years later, PQRS has morphed into 328 individual measures, 22 measure groups, a potential incentive of 0.5%, and a potential penalty of -1.5% (assessed in 2015) for nonparticipation.

Early participants experienced hurdles in achieving successful reporting and a very slow payment process when they were successful. While still evolving, the Centers for Medicare & Medicaid Services ( CMS ) has made it much more user-friendly as reflected in the just-released 2011 PQRS results. More than 280,000 eligible professionals participated individually, and PQRS incentive payments totaling $261,733,236 were paid.

While it may be tempting to hold off on PQRS implementation, it is important to consider the following:

  • Incentive payments are available for 2013 and 2014 participation. Eligible providers must successfully report on selected measures/measure groups during these years to obtain the incentive payment of 0.5% of allowed Medicare payments.
  • 2015 penalties are based on participation in the 2013 calendar year. In order to avoid these penalties, eligible providers must successfully report at least one PQRS measure in 2013. (Note that the standard to avoid future penalties is different than the standard to gain incentives.)
  • For groups with 100+ providers, successful participation in PQRS can positively affect your 2015 Value-Based Payment Modifier ( VBPM ). Groups may receive increased (up to +1%) or decreased (to -1%) Medicare payments based on performance of quality measures. These adjustments are in addition to other PQRS adjustments and meaningful use adjustments. For groups with less than 100 providers, these adjustments will begin in 2017.
  • The financial impact of penalties can add up. On an individual basis in a private practice or even a per location basis within a hospital-affiliated physician network, the penalties may seem financially immaterial. However, when totaled for the practice or the entity, they may become material.
  • The “court of public perception” will weigh in. As patients become more educated about their healthcare, they will come to understand that quality reporting is available on their personal physicians. For instance, Medicare already identifies providers that successfully participate in PQRS on its Physician Compare website, https://www.medicare.gov/physiciancompare/search.html. Commercial carriers are also sharing quality information about the physicians.
  • Where Medicare goes, so go the private insurers. This is not solely a Medicare consideration, though PQRS is specifically a Medicare program. Commercial carriers are developing and instituting their own quality measures and reporting the same to patients and other consumers. As this wave grows, failing to participate can cause even greater negative financial consequences.

A successful PQRS program will not just meet CMS requirements; it will become a part of the practice operations on a daily basis and should result in quality improvement for all patients and disease states. It is not too late to get started.

For more information on PQRS or would like to request a speaker on this topic, contact one of our executives listed below, (800) 270-9629.

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