Medicare Payment Adjustment Summary, re: Meaningful Use

CMS Medicare Payment Adjustment Summary

Now that most of my customers have their EHR-S up and running, I have been working lately with a few to determine the feasibility and best practices for drawing down the available EHR-S Meaningful Use Incentive dollars.

Although the effort to comply with the Incentive requirements annually may be high, I have learned that the Medicare Payment Adjustments, a.k.a. penalties may be more significant and warrant another look at the return on investment.

Here is the result of my research, which was no easy task and tool many hours I might add, to determine the total payment adjustments to your Medicare claim reimbursements, if you do not participate in any of these meaningful use programs.

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Physicians who do not participate in any of these Medicare / Medicaid incentive programs could face up to a 9% reimbursement reduction in 2017. Overall, the key take-away here is that it’s becoming more important to report successfully for PQRS, and for Meaningful Use as well, due to the cumulative effect of these penalties. It’s no longer a matter of 1% or 2%; it’s becoming a serious total annual penalty.

1.     Penalty #1 / EHRS -  If a provider is eligible to participate in the Medicare EHR Incentive Program, and they do not demonstrate meaningful use in either the Medicare EHR Incentive Program or in the Medicaid EHR Incentive Program, there will be payment adjustments beginning at 1% in 2015 for year the 2013 reporting period (RP), and increases by +1% each year for a max of 5% annually. EHR payment adjustment applies to all Medicare EPs (if not a meaningful user) as a percent of Medicare Physician Fee Schedule (MPFS).
http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/Downloads/PaymentAdj_HardshipExcepTipSheetforEP.pdf

2.     Penalty #2 / PQRS - Beginning in 2015, EPs are subject to a Physician Quality Reporting System 1.5% penalty for unsatisfactory reporting or non-participation in the 2013 RP, and a 2% penalty in 2016 for 2014 RP and beyond. PQRS payment adjustment applies to all Eligible Physicians (EPs) (Medicare physicians, practitioners, therapists), as a percent of MPFS.
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Payment-Adjustment-Information.html

3.     Penalty #3 / VM aka VBM – The Value Modifier (VM) program assesses both quality of care furnished and the cost of that care under the MPFS. Implementation of the VM is based in part on participation in PQRS. The VBPM will be applied in 2015 to group practices of 100+ EPs, and is based on 2013 RP PQRS performance. Unsatisfactory reporting or non-participation, for groups of 100+ EPs will be subject to a 1% penalty in 2015, which would be in addition to the 1.5% PQRS payment penalty. Therefore, these groups are subject to a total 2.5% payment penalty in 2015. The VBM payment adjustment will be increased to 4% in 2017.

If the Group reported PQRS data, then for Groups with 10-99 EPs: An upward or neutral VM adjustment will be applied based on quality tiering for applicable year; and for Groups with 100+ EPs: An upward, neutral, or downward VM adjustment will be applied based on quality tiering for applicable year.

VM phase-in will be completed in 2017 when the VM will be applied to solo practitioners and groups of 2+ EPs. Payment adjustments may be applied if eligible providers (EPs) do not successfully report PQRS or through quality-tiering for those who do report PQRS. However for the 2015 reporting year/2017 payment adjustment year, solo providers and groups with 2-9 providers will not receive a VM penalty under quality tiering, but may have a VM penalty if not reporting PQRS.
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/ValueBasedPaymentModifier.html

4.       Penalty #4 eRX – The Medicare Electric Prescribing (eRX) incentive program ended in 2013, and is no longer active. If the EPs did not participate in the 2012 - 2013 eRx Incentive Program and meet the requirements to avoid the 2014 eRx Payment Adjustment they would have received the 2% adjustment for all of 2014 RP. After the 2013 eRx Program year, the program went inactive and no more penalties (after 2014 – for not meeting 2012 or 2013 minimum program requirements) or incentive were applicable.
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ERxIncentive/20_Payment_Adjustment_Information.html

Adjustment Table for non-participation:

Total Max penalty applied in year:	*EHRS (for lack of participation in year) – Remittance code	PQRS (for lack of participation in year) – Remittance code	**VBM (tied to PQRS) (based on quality and costs data for this year) – Remittance code	eRx (for lack of participation in year) – Remittance code	Potential Max Medicare Payment Adjustments
Applicable to:	Medicare Physicians, Nurse Practitioners, Physicians Assistants.	Medicare Physicians, and Practitioners (including Clinical Social Workers and Psychologists)	Medicare Physicians, and Practitioners (including Clinical Social Workers and Psychologists)	Medicare Physicians, Nurse Practitioners, Physicians Assistants.
2012	NA	NA	NA	NA	NA
2013	NA	NA	NA	NA	NA
2014	NA	NA	NA	2% (2012 or 2013) - N545	2%
2015	1% (2013) – N700	1.5% (2013) - N699	1% (2013) – N701 Groups of 100+ EPs	NA	3.5%
2016	2% (2014)– N700	2% (2014) - N699	2% (2014) – N701 Groups of 10+   EPs	NA	6%
2017	3% (2015) – N700	2% (2015) - N699	4% (2015) for Groups of 10+ EPs; 2% (2015) for Groups of 2-9 EPs – N701	NA	9%
2018	4% (2016) – N700	2% (2016) - N699	?% (2016) for solo EP’s and all Groups;	NA	??%
2019	5% (2017) – N700	??	??	NA	??%
2020	5%	??	??	NA	??%
2021	5%	??	??	NA	??%
Future years	5%	??	??	NA	??%

Notes:

*If the EP’s begin participating mid-program, the penalty depends on the year they begin that participation.

**A VM Quality Tiering adjustment may also apply when reporting PQRS data, which may decrease or increase payments by a calculated %, from -4% to +4%.

·         Payment adjustments may be applied if eligible providers (EPs) do not report successfully PQRS or through quality- tiering for those who do report PQRS. However for the 2015 reporting year/2017 payment adjustment year, solo providers and groups with 2-9 providers will not receive a VM penalty under quality tiering, but may have a VM penalty if not reporting PQRS; Groups with 10 or more providers may receive an upward, neutral or downward adjustment under quality tiering.

·         for a great explanation with visual charts, of the VM Quality Tiering and potential payment reductions and increases, see here: http://www.acr.org/Quality-Safety/Quality-Measurement/Physician-Modifier-New

·         For an interactive tool to indicate the penalties applicable, see here:
http://www.mgma.com/government-affairs/issues-overview/medicare-payment-policies/pqri-physician-quality-reporting-initiative/pqrs-assessment/interactive-pqrs-impact-assessment-introduction

The “Medicare Access and CHIP Reauthorization Act of 2015” was introduced on March 24, 2015. This bipartisan bill would permanently repeal the SGR and stabilize Medicare payments for physician services with positive updates from July 1, 2015, through the end of 2019, and again in 2026 and beyond. It would replace Medicare’s multiple quality reporting programs with a new single “MIPS” program that makes it easier for physicians to earn rewards for providing high-quality, high-value health care. see bill summary here:
http://www.cmanet.org/files/assets/news/2015/04/sgr-hr2-bill-summary.pdf