Anesthesia services - Value Based Modifiers

1. Value–Based Modifiers & Physician Pay

2. What is the Value-Based Modifier Program? VM Rollout Schedule. By 2018 VM will determine the increase/decrease in eligible professional pay for services performed under Medicare Part B. • Value-based modifier (VM) program was created under the Affordable Care Act • Requires that the Centers of Medicare & Medicaid Services (CMS) apply VMs in determining physician pay for services performed under Medicare Part B • VM rollout is scheduled to be completed in 2018 • What affect will VMs will have on eligible professional (that includes physicians, CRNAs, PAs, NPs, and CNSs) pay?

3. How Does the VM Program Impact Physician Pay? • Note its departure from the traditional fee-for-service model (a volume centric model) employed by CMS in determining physician pay. • Provider pay will not be determined solely by the number of patients seen in a given time period. • Instead the VM program aims to incentivize providers to improve the quality of their care in order to receive higher levels of compensation. • The value modifier acts to increase/decrease a provider’s compensation based on the quality of service, rather then the number of patients seen. • For example, an anesthesia services provider, or anesthesia management provider that traditionally sees 400 patients/day would focus on improving the quality of care for those patients rather than trying to scramble and see extra patients

4. Common Questions Regarding the VM Program • Common Questions: • How are physicians and other eligible providers evaluated for the quality of care? • What quality metrics would be employed? • Are payments based solely on the quality of care? • Some answers: • VMs take into account the cost and quality of rendering a service in determining payment-not just the quality of care. • To measure quality, CMS relies on a system known as the PQRS (Physician Quality Reporting System). • The PQRS program is a quality reporting program that encourages individual eligible professionals (EPs) and group practices to report information on the quality of care to Medicare. • Based on the relationship of the quality of care delivered with respect to other providers the provider may be eligible for an upgrade/downgrade in pay. • One final factor to note is that the quality metrics reported in a given calendar year affect VM adjustment in the following two years, as noted in the table. Thus PQRS reports in 2016 will affect VM adjustment in 2018.

5. How Do You Measure VM? • In the context of our earlier example, of an anesthesia services provider, or anesthesia management provider, this group could choose to report on self-selected measures of quality. • For example, the group could report on the use of PACU guidelines, the percentage of smokers who abstain from smoking prior to anesthesia, and perioperative temperature management in assessing the quality of care delivered. • These quality metrics are then compared to similar anesthesia services providers and the providers are ranked on the basis of quality of care delivered and the cost of care delivered. This combined cost-quality of care metric is then used to determine the VM. • Groups with high cost of care and low quality of care are penalized by up to -4% (a 4% downgrade in pay), while groups that deliver high quality care at lower cost are rewarded with a +4% boost in pay. • The CMS designed the VM system to be globally budget-neutral so that the national incentive pool equals the size of the penalty pool.   

6. Long-term Impact of the VM Program on the Healthcare Industry • We predict the increased use of CRNAs and PAs to decrease the cost of service while maintaining a similar level of care). • We predict two broad changes in healthcare delivery: • Consolidation of healthcare provider groups in order to achieve higher quality of care while reducing fixed costs of healthcare delivery • Increased deviation of high performing physicians/physician groups from performing services under Medicare Part B. • As the VM program takes full effect in early 2018, the quality of healthcare will be closely monitored and the advantages/disadvantages of the VM system will be evaluated.

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