AAMC Contact: Mary Wheatley mwheatley@aamc 202-862-6297 December 2012

1. 2015 Physician Fee Schedule Value Modifier AAMC Contact: Mary Wheatley mwheatley@aamc.org 202-862-6297 December 2012

2. What is the Value Modifier (VM)? • Medicare Physician Pay-for-Performance • Established by Sec 3007 of Affordable Care Act • Adjusts payments up or down • Based on quality compared to cost • Outcome measures are risk-adjusted • Costs are risk adjusted and exclude geographic adjustments • Budget neutral (winners and losers) • Timing • Starts in 2015 for “some” physicians and physician groups based on CY2013 quality and cost data • 2017 for all physicians 2

3. 2015 VM Affects Most Large Group Practices Group with ≥ 100 EPs/TIN in 2013?* NO Excluded from 2015 VMIncluded in 2017 VM * VM excludes groups participating in Pioneer or MSSP ACOs. YES 2013 Group Reporting or Admin Claims? -1.0% Penalty in 2015 NO YES Optional : Quality Tiering 0.0% Penalty (No Adjustment) in 2015 Upward or Downward adjustment based on Cost and Quality Performance

4. Group Practice Reporting Option (GPRO) • Large groups (100 or more eligible professionals) must report quality data as a group to avoid automatic VM cut • 2013: Possible +0.5% incentive for the Physician Quality Reporting System (PQRS) • 2015: Avoids additional -1.5% reduction for PQRS • Reporting options vary by the size of the group. For large groups, the choices are: • GPRO Web Interface • Registry • Administrative claims (available for 2013) • EHR (starting in 2014) (See appendix for more details) 4

5. VM - Quality and Cost Measures Quality Measures • PQRS reported measures (varies by reporting method) • 3 claims-based outcome measures • Acute prevention quality indicators composite • Chronic prevention quality indicators composite • All cause readmission Cost Measures • Total cost per capita • Per capita costs for 4 condition populations • COPD • Heart Failure • Coronary Artery Disease • Diabetes Cost measures risk-adjusted and price-standardized Performance reported through Quality Resource Use Report (QRUR) 5

6. Value Modifier Composite Quality and cost measures roll-up into domains. Each domain is weighted equally.

7. Optional Quality Tiering (2015) *Cells eligible for high risk bonus • Maximum reduction is -1.0% for low quality and high cost • Payments are budget neutral; positive adjustment (“x”) will be after performance period ends (and CMS knows the total pool of available dollars to distribute) • Additional “1.0x” for high risk patients (average beneficiary score in top 25%) • High risk adjustment only applies if score is: • High quality/low cost • High quality/average cost • Average quality/low cost 7

8. Timing of the 2015 VM 8

9. What do Practices Need to Do? • Sign up with CMS as a group practice by October 15, 2013 • Determine Quality Reporting Strategy for each TIN • For 2013: submit quality data as group or sign up for administrative claims? • What is long-term alignment with EHR reporting? • Elect quality tiering (yes/no)? • Try to understand cost and quality performance • Consider implications of Physician Compare reporting • Additional resources on VM and GPRO: • https://www.aamc.org/initiatives/patientcare/patientcarequality/311244/physicianpaymentandquality.html • https://www.facultypractice.org/ 9

10. Appendix: GPRO Reporting Options for Large Groups 10