Medicare quality reporting penalty expected to strike most physicians

Washington Physicians could lose up to a total of $1.3 billion a year from their Medicare pay by not satisfactorily reporting quality measures to the program, researchers determined in an analysis of reporting trends.

The loss would be the result of hundreds of thousands of physicians and other health professionals not participating in, or not meeting criteria for, the Medicare physician quality reporting system. Medicare payments will be cut 1.5% in 2015 — and 2% in 2016 and beyond — for every eligible physician who fails to meet PQRS requirements by sending quality data to the Centers for Medicare & Medicaid Services. The 2015 penalty will be based on 2013 reporting activity.

The American College of Radiology's Harvey L. Neiman Health Policy Institute in Reston, Va., published its study about PQRS and future penalties on Dec. 28, 2012. The study focused on participation in PQRS by radiologists, but the authors also projected the impact of program penalties on all physicians.

By 2016, radiologists face annual penalties totaling $100 million, while other physicians would see total penalties of well over $1 billion, said Richard Duszak Jr., MD, the lead author of the study as well as chief executive officer and senior research fellow at the institute. Major compliance improvements are needed to stop the reductions, starting in the current reporting year, he said.

“This is a call for action to physicians to make sure they understand the train for pay-for-performance has left the station and is moving full speed ahead,” Dr. Duszak said.

Only 21% of the more than 600,000 eligible physicians earned PQRS bonuses in 2010, the latest full year of reporting statistics available from CMS. Federal law requires CMS to start penalizing physicians and other eligible health professionals who do not participate in PQRS by 2015. Due to operational issues, CMS is using 2013 PQRS reporting to determine which physicians would be penalized in 2015.

The Neiman Institute paper is not in line with a CMS expectation that more than half of eligible professionals will participate in PQRS this year and avoid the adjustment, said Patrick Conway, MD, CMS chief medical officer and director of its Center for Clinical Standards and Quality. About 30% of eligible professionals submitted at least some PQRS data in 2011, according to preliminary data, and CMS has continued to make changes to the reporting system by offering easier reporting options and aligning requirements with other quality improvement programs.

Under one major change, a physician or group of physicians that attempts to report PQRS measures in 2013 but does not meet the criteria for a bonus still will not have pay rates downgraded in 2015, Dr. Conway said. CMS adopted this policy because 2013 is the first reporting year that involves a possible penalty. At some point, physicians will need to meet the minimum reporting criteria to stop future penalties, but Dr. Conway did not specify when that change would occur.

Reaching out to wary doctors

CMS officials are working with the American Medical Association as well as state and specialty societies to raise awareness about the importance of meeting PQRS minimums in 2013. At the same time, the Medicare agency will continue to work with doctors on making the program's contributions more meaningful.

“We want to engage with physicians on reporting and ultimately improve care on behalf of patients,” Dr. Conway said.

The AMA wants physicians to be aware that PQRS penalties in 2015 will be based on this year's performance, said AMA President Jeremy A. Lazarus, MD. The Association has developed tools on its website to help practices navigate PQRS.

“Physicians are currently facing requirements to report on measures from numerous Medicare initiatives,” Dr. Lazarus said. “The AMA will continue to urge CMS to make changes to streamline the process of reporting on quality measures and allow physicians to report once and receive credit in all applicable programs. This is an important step toward reducing the administrative burden on physician practices and allowing physicians to spend more time caring for patients.”

Changed attitudes about Medicare's quality reporting initiative might pose a big obstacle to CMS achieving its goal of majority participation. Early versions of the quality reporting program were difficult for physicians. In 2007, using special Medicare claims codes to report quality data was the only option. Many attempted to earn bonuses, but the process was cumbersome, and some doctors became discouraged after not receiving bonuses, said Bruce Bagley, MD, the American Academy of Family Physicians medical director for quality improvement.

Newer reporting methods, such as using a computer registry, are better options for many physicians, Dr. Bagley said. “They have opened up registry reporting, and that is an easy way to do it. Hopefully, physicians can use it at the point of care so it can do some good.”

Some radiologists found the efforts associated with PQRS reporting outweighed the rewards, Dr. Duszak said. Financial incentives have not been enough to convince a majority of physicians that reporting measures will have a positive impact on quality of care. Physician attitudes could change with new innovations and with the system shifting to the phase of negative pay adjustments for noncompliance.

“As we move from carrots to sticks, I am predicting more will want to participate not because they believe in the process, but for penalty avoidance behavior,” Dr. Duszak said.

One code in 2013 could prevent the penalty

CMS has lowered reporting thresholds and increased ways to prevent the 2015 penalty. Agency officials believe a minority of eligible professionals will end up seeing the penalty applied now that a number of these program changes have taken effect.

For example, CMS will deem the submission of at least one quality measure, in the form of a G-code, during an applicable 2013 patient encounter as being satisfactory to stop the 2015 payment adjustment. Submission of the G-code must follow the rules for reporting the PQRS measure, so it must be associated with a service provided during an eligible patient encounter that fits the correct diagnosis codes and criteria for the measure denominator.

“Due to the fact that, in 2015, no other incentives would be offered and only payment adjustment would be provided, we wanted to ease eligible professionals into reporting [under] PQRS, especially those who are reporting for the first time,” said Christine Estella, an official in the Center for Clinical Standards and Quality, during a recent preview of the 2013 reporting year. “So we proposed an alternative means to avoid the 2015 and 2016 PQRS payment adjustment that were different from our proposals for the criteria to meet the 2013 and 2014 PQRS incentive.”

One additional new reporting method is called the administrative claims option, which requires physicians or group practices to sign up by Oct. 15. The option allows CMS to analyze claims data automatically to determine eligibility. Unlike the traditional reporting methods, it would not require submission of special codes.

“Under this, CMS would perform the analysis, so no reporting of G-codes would be necessary,” Estella said. “We finalized this administrative claims option and reporting mechanism for the 2015 PQRS payment adjustment only.”

The administrative claims option would prevent the 2015 penalty, but it cannot be used by an individual physician or group that wants to earn a bonus for 2013 reporting. Participation in one of the other PQRS reporting options is necessary to receive a lump-sum payment equal to 0.5% of the participant's 2013 Medicare pay.