Value Based Modifier (VM)

Value Based Modifier (VM) Quick FAQs

The Value Based Modifier (VM) was created by Section 3007 of the Affordable Care Act (ACA) (P.L. 111-148) that mandated CMS begin applying a value modifier under the Medicare Physician Fee Schedule (MPFS). Implementation of the VM began on January 1, 2015, and cost and quality data are required to be included in calculating payments to eligible professionals (EPs). The VM is a value-based payment adjustment (i.e., upward, neutral, or downward payment adjustment) and the application of the VM is dependent on successful reporting of PQRS program quality measures by the group practice. 

CMS Disclaimer “Please note, although CMS has attempted to align or adopt similar reporting requirements across programs, EPs should look to the respective quality program to ensure they satisfy the PQRS, EHR Incentive Program, Value-Based Payment Modifier (VM), etc. requirements for each of these programs.”

What is the Value Based Modifier?

The Value Based Modifier (VM) was created by Section 3007 of the Affordable Care Act (ACA) (P.L. 111-148) that mandated CMS begin applying a value modifier under the Medicare Physician Fee Schedule (MPFS). The VM is a method to evaluate cost and quality measures to calculate payment for Medicare services. Cost and quality data are required to be included in calculating payments.  Implementation of the VM payment adjustment began on January 1, 2015, for the 2013 VM performance period (i.e., 2013 PQRS reporting year). Since January 1, 2016, the VM officially affects CRNAs regardless of whether they are solo practitioners or part of provider group with two or more eligible professionals as identified by their Taxpayer Identification Number (TIN).  

Does the VM currently apply to a CRNA that works as an individual practitioner (i.e., not in a group)?

Yes. On January 1, 2016, the official start of the 2016 performance period (PQRS 2016 reporting year) the VM applies to all CRNAs who are solo practitioners as well as CRNAs who work in provider groups of two or more EPs. This was finalized by the Physician Fee Schedule 2016 Final Rule that was published in November 2015. A solo practitioner is a single TIN with one eligible professional who is identified by an individual National Provider Identification (NPI) billing under the TIN. 

How is payment determined for the VM?

The Value Based Modifier (VM) is a value-based payment adjustment (i.e., upward, neutral, or downward payment adjustment) that is applied to MPFS payments for  mixed interdisciplinary specific group practices consisting of non-physician and physician eligible professionals (EPs) (i.e., APRNs and MDs). The application of the VM is dependent on successful reporting of Physician Quality Reporting System (PQRS) Program quality measures by the group practice or 50% of the individual EPs in the group practice. Quality tiering is the analysis used to determine the type of adjustment and the range of adjustment based on performance on quality and cost measures. Quality tiering will determine if a group practice’s performance is statistically better, the same, or worse than the national mean.  

How is the VM performance period and calendar year related to the PQRS program?

The VM performance period is similar to the PQRS reporting year which is based on a calendar year (January 1 to December 31). A payment adjustment occurs in the calendar year two years after the performance period, for example, the 2015 VM payment adjustment is based on the 2013 VM performance period (i.e. PQRS 2013 reporting year). Similarly, the 2018 VM payment adjustment will affect eligible providers’ PFS payments based on the 2015 performance period (PQRS 2016 reporting year). 
   

How is the VM connected to the Physician Quality Reporting (PQRS) Program?

Participation or nonparticipation in the PQRS Program will be the basis for whether Medicare will apply a VM payment adjustment to a PFS payment. Therefore, the application of the VM payment adjustment is dependent on successful reporting of PQRS Program quality measures by the group practice billing under a single taxpayer identification number (TIN). The VM is measured by the quality of care furnished to Medicare beneficiaries relative to the cost of providing that care during a specific VM performance period (i.e. PQRS reporting year). Similar to PQRS, the payment adjustment occurs two years after a performance period, e.g. 2018 VM payment adjustment based on 2016 VM performance period (PQRS 2016 reporting year).

Who are the eligible professionals under the VM Program?

The following are considered eligible professionals for the purpose of determining group practice size and the application of the VM.    

  • Practitioners: Certified Registered Nurse Anesthetists, Anesthesiologist Assistants, Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists 
  • Medicare physicians: Doctors of Medicine, Osteopathy, Podiatric Medicine, Optometry, Oral Surgery, Dental Medicine, or Chiropractic Medicine.
     

How does participation in the PQRS Program affect my VM payment adjustment?

The VM program officially applies to CRNAs based on the 2016 VM performance period (PQRS 2016 reporting period) and the VM 2018 payment adjustment. Participation in the PQRS Program will be the basis for whether Medicare will apply a VM payment adjustment to a PFS payment. Therefore, a CRNA will incur an automatic VM payment adjustment by simply choosing not to participate in the PQRS program. Satisfactorily reporting PQRS measures allows a CRNA to avoid the -2% PQRS 2018 payment adjustment. For the VM program alone, negative payment adjustments of -4 % in 2018 will be applied to eligible EPs who don’t satisfactorily meet the PQRS program requirements or are considered low quality/high cost providers, therefore, CRNA may incur a penalty of up to 6% when payment adjustments from the VM and PQRS quality programs are combined. 

Note: CMS finalized a hold harmless policy under the Quality Tiering portion of the VM program for CRNAs who are solo practitioners or who are in group practices (as identified by the group TIN) that consist only of non-physician EPs such as CRNAs. The hold harmless policy, however, does not apply to CRNAs who work in group practices with physicians. For specifics please see the 2016 Physician Fee Schedule Final Rule. The hold harmless policy only applies to those CRNAs you satisfactorily meet the PQRS program requirements. 

When did the VM take effect and to whom does it apply?

The following table indicates the criteria CMS will use when determining when and to whom the VM will apply.

 VM payment adjustment in year VM performance period=PQRS reporting year  Required number of EPs per group   Affected providers
 2015  2013  100+ EPs  Physicians
 2016  2014  10-99 EPs  Physicians
 2017  2015  Solo physicians and group practices with 2 to 9 EPs  Physicians
 2018  2016  All  All CRNAs, PAs, NPs, CNSs and physicians 

 

Final Rule 2015:
It is of great significance to CRNAs that the Physician Fee Schedule 2016 Final Rule finalized the application of the 2018 VM payment adjustment to all CRNAs, PAs, NPs, and CNSs based on their 2016 performance period (PQRS 2016 reporting period). Consequently, it is imperative that CRNAs, billers, and vendors become comfortable with reporting PQRS quality measures so they are prepared to avoid the 2018 VM payment adjustment based on their 2016 performance period (PQRS 2016 reporting period).
   

As a CRNA, once I satisfactorily report or participate in PQRS am I subject to the 2018 VM quality tiering for the 2016 performance period (PQRS 2016 reporting year)?

Yes. All CRNAs, PAs, NPs, and CNSs and physicians are subject to the 2018 VM payment adjustment for the 2016 performance period (PQRS 2016 reporting year). Physicians under the VM program are defined as Doctors of Medicine, Osteopathy, Podiatric Medicine, Optometry, Oral Surgery, Dental Medicine, or Chiropractic Medicine.
 
CMS created one exception the hold harmless policy which exempts certain EPs from negative payment adjustments. Specifically, the hold harmless policy applies only to CRNAs and other eligible APRNs who work as solo practitioners and those who are in non-physician provider groups. CMS noted that although these EPs will not be subject to a negative payment adjustment, they will be eligible for a 2018 positive or neutral payment adjustment provided that they meet PQRS satisfactory reporting or participating requirements. CRNAs working in group practices with one or more physicians will be subject to all payment adjustments - positive, negative or neutral. 
 
The tables below detail the 2018 VM payment adjustments as they apply to solo and group practices. They will be evaluated on two composite scores – quality and cost, as they relate to the national average. This allows Medicare to identify statistical outliers and assign quality and cost tiering.   
 

What is Quality Tiering and the hold harmless policy?

Quality Tiering is the method CMS will use to determine the type of adjustment and the range of the adjustment based on a group’s performance on quality and cost. Implementation of quality tiering is dependent upon an EP submitting PQRS quality measures and is mandatory for all EPs beginning in the 2016 VM performance period (2016 PQRS reporting period) 2018 payment adjustment period. Quality tiering may result in either an upward, neutral or downward payment adjustment. It will also determine whether a group’s performance is statistically better, the same, or worse than the national mean. The following table illustrates how quality tiering will affect groups that are subject to the VM. 
 
The hold harmless policy was implemented by the 2016 Physician Fee Schedule Final Rule that exempts CRNAs and other APRN EP solo practitioners and those working in group practices that are composed only of non-physicians (as identified by their TIN) from the VM’s negative payment adjustment for the 2016 performance period (2016 PQRS reporting period), 2018 payment adjustment period if they successfully report or participate in reporting PQRS quality measures. Unfortunately, the hold harmless policy does not extend to all CRNAs and APRNs that work in group practices which include physicians (i.e. mixed interdisciplinary groups). For a detailed explanation of the hold harmless policy see the 2016 Physician Fee Schedule Final Rule.    
 
Quality tiering for 2018 VM Payment Adjustments (2016 Performance Period) [Download Table]

 

How is Quality Tiering used to calculate the VM payment adjustment?

CMS will use six domains (Clinical Care, Patient Experience, Population/Community Health, Patient Safety, Care Coordination, and Efficiency) to combine each quality measure into a quality composite score and each cost measure (total per capita costs and total per capita costs for beneficiaries with specific conditions) into a cost composite score.

To learn more about how the VM payment adjustments are calculated please review Sections V-VIII of CMS’ summary of the VM policy. 

What is the risk of seeing a negative VM payment adjustment for anesthesia after participating in PQRS?

CMS will standardize all cost measures so that they are payment and risk adjusted to account for geographic payment rate differentials. A group’s cost measures will also be adjusted for the different EPs’ specialties within the group. Beneficiaries will be attributed to the group that provides the majority of a beneficiary’s primary care services. If a group does not provide primary care services, no beneficiaries will be attributed to that group, no cost measures will be calculated and the group’s VM will equal zero. CMS indicates that specialty groups like anesthesiology may not be attributed any beneficiaries. It is unlikely that anesthesia will be significantly affected by the VM program based on the current scoring and attribution methodology used to calculate the VM payment adjustments; however participation in PQRS is necessary to avoid the automatic negative VM payment adjustment. In this case, CRNAs, must participate in PQRS to avoid the compounding effects of the 2018 VM and PQRS negative payment adjustments (penalties) for the 2016 performance period.

What are Quality and Resource Use Reports (QRURs) and how are they related to the Value Modifier (VM)?

The Medicare Fee-for-Service (FFS) Physician Feedback Program provides comparative performance information to providers and medical practice groups beneficiaries. The Program (which is specific to FFS Medicare—not Medicare Advantage) contains two primary components:

  1. Quality and Resource Use Reports (QRURs) - confidential feedback reports
  2. Development and implementation of the Value-Based Payment Modifier (VM)

The VM Program provides for differential payment under the Medicare Physician Fee Schedule (PFS) based on the quality of care furnished compared to the cost of care during a performance period. As part of the VM Program, CMS decided to provide participating providers with confidential feedback reports known as QRURs.  
 
CMS disseminates Mid-Year QRURs (e.g., 6 month interim reports) in the spring, for informational purposes only, to solo practitioners and group practices nationwide who billed for Medicare-covered services under a single TIN over the Mid-Year QRUR performance period (July 1- June 30). In the fall, CMS disseminates Annual QRURs to solo practitioners and groups of practitioners (including physicians and non-physician eligible professionals that participated in the Medicare Shared Savings Program, Comprehensive Primary Care Initiative, or, the Pioneer Accountable Care Organization Model). The Annual QRUR serves as final summary report of a TIN's quality and cost performance and also reports the VM that was calculated from the TIN's performance two years prior. For detailed information about the value modifier and QRURs visit the Medicare FFS Physician Feedback Program/Value-Based Payment Modifier.

What information is contained in a Quality and Resource Use Report (QRUR)?

The 2016 Annual Quality and Resource Use Reports were released in September 2017. The QRURs are confidential feedback reports that are available to all solo practitioners and group practices that bill Medicare Part B (Physician Fee Schedule (PFS)) based on one Taxpayer Identification Number (TIN). The reports show eligible professionals (EPs) (based on their TIN) how they performed on quality and cost measures relative to national benchmarks under the Value Modifier.  The QRURs also indicate whether the EPs are subject to a positive, neutral or negative payment adjustment in 2018 for services rendered under the PFS.  

Groups and solo practitioners who believe their Value Modifier calculations were incorrectly assessed may request for an Informal Review.  The QRUR Informal Review Period is from September 18, 2017 until December 1, 2017.  Detailed information on the 2016 QRUR and 2018 Value Modifier is on CMS.gov.  For questions about the 2016 QRUR and 2018 Value Modifier and how to request for an Informal Review, contact the Physician Value Help Desk 1-888-734-6433 (select option 3) or email pvhelpdesk@cms.hhs.gov
  

How will the Value Modifier program be affected by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015?

According to provisions of MACRA, the VM Program, PQRS and the Medicare Electronic Health Record (EHR) incentive programs are scheduled to sunset on December 31, 2018, to be replaced by MACRA’s Merit-Based Incentive Program (MIPS). The MIPS Program will maintain characteristics of the VM, PQRS and EHR programs by focusing on quality, resource use, clinical practice improvement and meaningful use of certified EHR technology. Details regarding the transition to the MIPS program will be released in future rulemaking. See current information regarding the VM and MACRA.

Who should I contact for VM or PQRS questions?

For questions regarding the VM Program please contact the Physician Value Help Desk.  The desk is available Monday - Friday; 8am - 8pm EST.
Phone: 1-888-734-6433, press option 3.
 
For questions regarding the PQRS Program please contact the QualityNet Help Desk. The desk is available Monday - Friday; 7am -7pm CST.
Phone: 1-866-288-8912 TTY: 1-877-715-6222
Email: Qnetsupport@hcqis.org