Medicare pay-for-reporting: How to get your 1.5%

Next month, Medicare will take a big step toward becoming a more active health care purchaser, by launching its first program-wide quality reporting initiative for physicians.

Doctors who join the effort will be eligible for a 1.5% bonus on all of their Medicare reimbursements for the last six months of this year.

Not every physician will decide that participating in the Physician Quality Reporting Initiative is worth the money. Collecting data for the quality measures and passing it on to the government, for instance, will require extra work by doctors and their staff.

The Centers for Medicare & Medicaid Services wants physicians to understand how the program will operate so Medicare can get the data it needs and doctors can get the bonuses they deserve.

Choose your measures wisely

First, physicians must consult the CMS-approved list of 74 quality measures to decide how many to report and determine how many of their Medicare patients fit into those categories. To be eligible for the bonus, doctors must report on at least three measures and apply each one to at least 80% of the patients who fit that category.

Physicians who see a significant number of diabetic patients, for example, might decide to keep special tabs on whether these patients maintain their blood pressure control -- one of the CMS quality measures. To meet this requirement, a doctor would have to share with the government the individual blood pressure ranges of at least 8 out of 10 under-control diabetic patients during one or more of their follow-up office visits in the last half of the year.

Some measures require reports only once during the six-month period, while others must be logged each time the test or procedure in question is performed.

Some physicians, particularly specialists treating a very narrow range of patient conditions, might be unable to find three measures that apply to their Medicare population. In these cases, doctors who report one or two measures will be able to claim their bonuses as long as CMS determines that nothing else on the list of 74 measures applied to their senior or disabled patients. The agency does not have a process for physicians with zero applicable measures to apply for the bonus.

"In no case is any participating professional required to report more than three measures, although that professional may choose to do that," said Thomas Valuck, MD, director of the CMS Special Program Office for Value-Based Purchasing. "But in case there are only one or two, that's still very possible to be successful by reporting just one or two."

Although choosing measures that apply to fewer patients in the practice would likely require less work, physicians might want to avoid taking the easier path. CMS officials warned they will limit the bonus for physicians who have relatively few patients to whom one or more of the three chosen measures apply. For example, if a doctor picks three osteoporosis measures despite having few osteoporosis patients and many more diabetic patients, the physician might find that his or her bonus ends up being less than 1.5%.

Get your numbers in order

Before physicians can start reporting the quality data, they need to make sure they have all of the right identifiers and claims numbers within easy reach.

Every doctor who bills Medicare must obtain and start using a National Provider Identifier on his or her claims. Although Medicare recently implemented a contingency plan that gives doctors some extra time to start using the new identifier, any physician who wants to participate in the PQRI must be using his or her NPI by the time the reporting period starts in July. When it comes time to send out bonus checks, federal officials will use the NPI as a reference to credit individual physicians, even in cases in which a single patient has seen multiple doctors in the same practice.

The NPI is not the only number participating physicians will need to know. Reporting quality measures will also involve learning a potentially new set of CPT-II or temporary G-codes that apply to a particular test result, outcome or procedure. The ICD-9 and evaluation and management codes that physicians already use on claims to list patient diagnoses and types of services rendered will allow the government to determine whether a particular measure applies to a patient.

The second layer of coding -- the CPT-II or temporary G-codes -- will identify the actions physicians took to satisfy the measure requirements, said Susan Nedza, MD, chief medical officer at the CMS Chicago office.

Take the example of a physician who opted to track blood pressure control for diabetics. The doctor would monitor and report whether patients whose blood pressure was under control at the last visit still had it under control when they came in for a checkup. The doctor would use the appropriate ICD-9 and E&M codes as usual to identify members of that patient subset and to bill Medicare for the visit but would also include two additional CPT-II codes -- one applying to the systolic pressure range and another applying to the diastolic pressure range. Using the latter two codes, CMS would be able to determine what percentage of these diabetic patients maintained good blood pressure.

Stake your claim

Physicians do not need to inform Medicare that they will be participating in the project. As long as they start using the right combination of identifiers and codes on their claims starting in July, CMS will automatically record that they are submitting quality data and striving for the bonus.

Doctors will pass along the necessary quality information in the same way they do the details about other Medicare services they perform. A physician who reports the systolic and diastolic blood pressure ranges of a diabetic patient, for instance, would do so as line items underneath the claims form entry where he or she lists the office visit for reimbursement.

The difference with quality reporting is the physician will not receive any extra payment right away for recording the information. So for each quality entry, the doctor will list a charge of $0.00 and file the claim as usual. Although the Medicare carrier will reject all of the line items containing a zero charge, CMS will still record the information and credit the NPI-holder with quality reports.

Although the project officially runs from July 1 through Dec. 31, participants will have some extra time to complete all of their reporting on 2007 quality measures. As long as all claims that contain quality measures are submitted, processed by the Medicare carrier and logged by CMS by the end of February 2008, they will count. Still, officials are urging doctors to file their claims as promptly as possible to avoid falling victim to any unforeseen delays.

Don't spend the money yet

Although the 1.5% bonus will come on top of a physician's total Medicare reimbursements for the bottom half of 2007, physicians who qualify will need to wait until well into 2008 before they receive the cash.

Rather than pay out the bonus over time, CMS will distribute the money in one lump-sum payment at a yet-to-be determined point in the middle of next year. Before it can do that, it must process all the claims from the six-month period to determine which physicians met the requirements. It will also apply a mathematical formula to determine if those who participated chose measures that encompassed enough relative numbers of patients for the physicians to receive full bonuses.

Although eligibility for the extra pay will be judged at the individual level using the NPI, group practice physicians who bill Medicare under a single taxpayer identification number will receive one check that aggregates all of the bonuses earned by the practice members.

Physicians will not be judged on how well they or their patients did on the quality measures. A doctor can still receive the full bonus, for example, even if many of his or her diabetic patients didn't control their blood pressures. Although CMS hopes to use the information to improve the initiative and perhaps to convert it some day into a bona fide pay-for-performance program, the project is strictly a pay-for-reporting exercise.

Doctors will be able to benefit from the six-month results in a way that goes beyond the bonus. The government plans to make available to each participating physician a confidential final report that shows how he or she did on each reported quality measure, but it will not publicize these results.

Get things right the first time

CMS officials say they are trying to make sure the project's collection and reporting requirements aren't too burdensome for physicians. But doctors must make sure they dot all their I's and cross all their T's before they send in their Medicare claims.

The agency announced that it is barred by Congress from implementing any kind of formal complaint or appeals process for doctors who are denied the 1.5% bonus or who receive a lesser amount. This means that participants who do not meet all of the requirements will risk taking on six months' worth of extra work for little or no additional compensation.

Still, CMS said it will take another look at reduced or denied bonuses, even though no official recourse will be in effect.

"We're excluded under the statute from any formal administrative or judicial review of our decisions under this program, but in order to meet our due process requirements, we will have some sort of inquiry process to handle appeals about payment amounts and that sort of thing," CMS' Dr. Valuck said.

The agency did not confirm whether it would have authority to reverse a bonus decision following such an inquiry. But the physicians who choose the right measures and fill out their Medicare claims correctly won't likely need to take such an unofficial, untested route to obtain their full bonus.