Most doctors headed for penalty over Medicare quality reporting

Growing numbers of physicians are earning reporting bonuses, but hundreds of thousands still have not participated in a program that turns punitive in 2013.

By Charles Fiegl amednews staff — Posted May 28, 2012

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

Absent a significant change in the trajectory of Medicare’s physician quality reporting system, a large majority of doctors will set themselves up for future rate cuts by failing to report enough quality measures to the federal government in 2013.

A recent trends report from the Centers for Medicare & Medicaid Services shows that fewer than 200,000 physicians, out of the more than 600,000 who were eligible for the incentive program, reported PQRS measures in 2010. More than 125,000 physicians reporting as individuals met enough of the requirements to share a total of nearly $400 million in bonuses, but hundreds of thousands of eligible doctors did not attempt to meet the pay-for-reporting criteria. More than 50,000 tried for the bonuses but did not report enough quality measures to hit the minimum.

The lack of participation has physician organizations concerned that a huge segment of those caring for Medicare patients soon will take a hit when CMS begins not only withholding bonuses from doctors who don’t participate in the PQRS but also cutting their pay rates. Physicians can consider 2012 to be their final year to try reporting risk-free: A 1.5% noncompliance penalty won’t be assessed until 2015, but that payment adjustment will be based on whether physicians report quality measures in 2013.

Organized medicine groups, including the American Medical Association, have urged CMS not to base 2015 PQRS penalties on the 2013 reporting year. Physicians are facing several deadlines for penalties related to quality and health information technology initiatives, said AMA President Peter W. Carmel, MD. The programs would require doctors to meet substantial requirements to avoid the penalties.

“While physicians may be aware of the 2015 PQRS deadline, many do not know that the penalty will be based on their performance in 2013,” Dr. Carmel said. “CMS data show that many physicians are not yet participating in the PQRS program. A significant number of those who are trying have been unable to participate, showing that barriers to success still remain.”

In 2010, overall PQRS participation rose to 244,145 physicians and other health professionals, but 76% of eligible professionals, or nearly 750,000 doctors, nurses and others enrolled in Medicare, chose not to report any quality data to CMS. Most who did report earned bonuses. About seven in 10 participating professionals qualified for payouts equal to 2% of their Medicare charges that year.

Bonuses went to a total of 168,843 health care professionals and 19,232 physician practices in 2010, and the average payout was $2,157 per doctor and $20,364 per practice. In 2009, about 120,655 health professionals pulled down incentives that averaged $1,962 per individual.

Those incentive amounts are becoming smaller, with doctors receiving a 1% bonus for successful reporting in 2011 and 0.5% for 2012, 2013 and 2014, the final year to receive higher pay before the first noncompliance penalty is applied to pay rates in 2015.

A flurry of Medicare penalties

Despite their successes in PQRS, physicians who have earned bonuses expressed doubts about their ability to prevent all the potential future penalties outlined by CMS. A 1% penalty was applied this year to thousands of physicians for not reporting enough eligible electronic prescribing encounters with patients in 2011.

In addition to the 2015 PQRS penalty, Medicare rates would be reduced by 1% that year for those who do not achieve meaningful use of an electronic health record system. CMS also plans to adjust pay with a value-based modifier for physicians starting in 2015. The modifier would increase pay for some doctors who are deemed to provide high-quality, efficient care, but it would decrease rates for an as-yet-unknown pool of other physicians.

“It’s tough for small practices,” said Brent W. Beasley, MD, an internist who works part time at Plaza Primary Care and Geriatrics in Kansas City, Mo. “We are doing our best to break even.”

The practice is working on a plan to meet the requirements of the multiple incentive programs, said Dr. Beasley, who also is a medical director for Saint Luke’s Care, a quality improvement organization within Saint Luke’s Health System in Kansas City, Mo. Improving quality is difficult in offices with just four or five physicians as those practices try to contain overhead costs. The larger health systems have the resources to keep up with Medicare’s demands, he said.

Plaza Primary Care and Geriatrics has used its EHR system to help capture thousands of dollars in PQRS bonuses, Dr. Beasley said. But he is uncertain about whether the success will continue as the program shifts into punitive mode. “I’m not confident we will avoid penalties. We’ll do our best.”

Meeting PQRS requirements is very difficult without an EHR system, said Derrick O’Connell, RN, the chief quality officer at Patients First Health Care in Washington, Mo. The 80-physician group has earned bonuses by having its doctors enter quality data into designated EHR fields during eligible patient encounters. Without such automation, quality data must be aggregated and reported by hand.

Success with group reporting option

Participation in PQRS was boosted somewhat by a new reporting option in 2010. Academic organizations such as the University of Texas Medical Branch and Loyola University Health System opted to send physician quality data as group practices. Thirty-five organizations, with 24,823 eligible professionals, later earned bonuses by using CMS’ new group practice reporting option that year.

The group option is patient-centered and cuts down on duplication, said Rex McCallum, MD, UTMB’s chief physician executive. For instance, the group would be credited when a physician reports a flu vaccine measure for a patient. If the patient sees another doctor at the group, that doctor would not report the flu measure but could focus on another applicable measure for which the group could claim credit.

About 500 physicians earned bonuses in 2010 at Loyola, said Daniel J. Post, senior vice president of ambulatory programs and system services. In previous years, some physicians would earn bonuses for reporting measures as individuals, while others would fail to meet the minimums.

Back to top


Low turnout for Medicare PQRS

Most physicians who are eligible for Medicare quality reporting bonuses do not participate in the incentive program. If that trend continues into 2013, many will be penalized with lower pay. Medicare recently compiled figures for doctors reporting measures as individuals between 2007 and 2010. A smaller number of additional physicians reported as group practices.

Year Eligible
Qualified for
2007 477,381 80,044 data not available
2008 601,733 117,080 data not available
2009 621,051 157,194 92,189
2010 623,077 181,542 128,942
(See correction)

Sources: “2010 Reporting Experience, Including Trends (2007-2011): Physician Quality Reporting System and Electronic Prescribing (eRx) Incentive Program,” Centers for Medicare & Medicaid Services, Feb. 22; “Details for Name: 2009 Reporting Experience, Including Trends 2007-2010,” CMS

Back to top

Practice managers want e-prescribing deadline delay

The agency overseeing the Medicare program should extend the deadline for physicians filing an exemption to stop the 2013 electronic prescribing penalty, said the Medical Group Management Assn.

The MGMA has asked the Centers for Medicare & Medicaid Services to move the June 30 deadline for exemption applications to Dec. 31. “This will give practices the additional time they need to assess their providers’ success in reporting for the first several months of 2012,” the MGMA stated in a May 15 letter to CMS.

Physicians must report at least 10 eligible e-prescribing transactions for Medicare patients by June 30 to prevent a 1.5% pay reduction from being applied to Medicare rates in 2013. Physicians who earned 2011 e-prescribing bonuses also will not be penalized in 2013.

In March, CMS began accepting requests for significant hardship exceptions, such as for a doctor who orders fewer than 100 prescriptions over six months. Physicians who can’t meet e-prescribing program requirements should consider filing applications for an exemption, said Cecil B. Wilson, MD, American Medical Association immediate past president. “While we do not think physicians are being given enough time to comply with the Medicare e-prescribing program, we want to make them aware of the upcoming e-prescribing deadline so they can take steps now to prevent being hit with the 2013 penalty,” he said.

The MGMA also urged CMS to take additional steps to protect Medicare physician payments from unnecessary cuts. For instance, the Medicare agency should deem all physicians meeting meaningful use requirements in the electronic health record incentive program as also successfully meeting e-prescribing and physician quality reporting system requirements. The AMA also has called for this change.

CMS had not responded to the MGMA letter by this article’s deadline.

In the meantime, physicians can apply for exemptions to the e-prescribing penalty online.

Back to top

External links

“Physician Quality Measure Reporting,” American Medical Association (link)

“2010 Reporting Experience, Including Trends (2007-2011): Physician Quality Reporting System and Electronic Prescribing (eRx) Incentive Program,” Centers for Medicare & Medicaid Services, Feb. 22 (link)

“Details for Name: 2009 Reporting Experience, Including Trends 2007-2010,” Centers for Medicare & Medicaid Services, April 4, 2011 (link)

Hardship exemption request for the 2013 eRx Payment Adjustment, CMS (link)

Back to top


This table originally gave incorrect information about the number of physicians who qualified for quality reporting incentives in 2007 and 2008. Data for those years were not available. American Medical News regrets the error.

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn