The study findings may provide guidance to policy makers on how to make payment programs more equitable for providers that see higher numbers of high-risk patients.


Aug. 14—Physician groups serving medically and socially high-risk patients reported lower quality scores and were more frequently penalized, according to the first study of Medicare’s Physician Valued-Based Payment Modifier (PVBPM) program.

The study of 2015 payment data from the U.S. Department of Health and Human Services (HHS) on 899 physician practices with nearly 5.2 million beneficiaries was published in the Aug. 1 issue of the Journal of the American Medical Association. The authors found that most of the penalties issued “were largely driven by failure to register and report data.”

Although 79.2 percent of low-risk practices successfully registered and reported data to the program, only 69.5 percent of practices with high medical risk complied, as did 47.1 percent of practices with high social risk and 54.1 percent of practices with high medical and social risk. High social risk was defined based on the proportion of patients who were dually eligible for Medicare and Medicaid, while high medical risk was based on Hierarchical Condition Category (HCC) risk scores.

“Total per capita costs were $9,506 for low-risk practices, $13,683 for high medical risk, $8,214 for high social risk, and $11,692 for both high medical and social risk. These patterns were associated with fewer bonuses and more penalties for high-risk practices,” the authors wrote.

“Findings from this study suggest that if current performance patterns persist, practices that serve a high proportion of socially or medically complex patients may fare poorly under the Merit-based Incentive Payment System (MIPS)” when payment adjustments begin in 2019.

The lead author, Lena Chen, MD, holds positions with HHS and the University of Michigan’s Institute for Healthcare Policy & Innovation. An HHS spokesman speaking on condition of anonymity said the lessons learned from the PVBPM program are being evaluated as MIPS is rolled out. 

“For example, in order to provide a smooth transition from the Value Modifier to the new MIPS, we recently proposed to hold all physicians harmless from downward adjustment due to quality and cost performance [in payment year 2018] and aligned the level of upward incentives for all physician groups and physicians subject to the 2018 Value Modifier,” the spokesman said.

HHS said while it had no data explaining why so many practices treating high-risk patients failed to register and report, “It is not unique to these practices,” the spokesman said. “It is one of the reasons that MIPS provides a low-volume threshold for practices that excludes these physicians and practices that do not see large numbers of Medicare patients.”

The Centers for Medicare & Medicaid Services (CMS) also is providing $100 million over five years in technical assistance for MIPS-eligible clinicians in practices with under 15 clinicians.

The HHS spokesperson said the takeaway messages from the study are, “It’s important that physician groups and physicians successfully participate in Medicare quality programs, and that successful participation and quality-measure performance, including improved performance over time, can help practices do well. Under the 2015 Value Modifier, we found that performance on quality drives upward and downward payment adjustments under quality-tiering more than does performance on cost.”

Accounting for Socioeconomic Issues

Socioeconomic issues in physician practice reimbursement also concern the Medicare Payment Advisory Commission (MedPac), which advises Congress on healthcare payment issues. MedPac has expressed interest in lessening the penalties against providers that treat more medically and socially high-risk patients. MedPac also has hinted that its commissioners will reexamine the quality measurements used to grade providers.

Melinda Buntin, PhD, who chairs the department of health policy at the Vanderbilt University School of Medicine, noted that the study looks at both medical and social risk factors for physician practices and said it offers “new and important information for policy makers.”

In an interview, Buntin said the study shows policy makers where to target efforts to improve care quality for multiple types of patients.

“We need to keep pursuing this issue to identify socially at-risk patients and the providers who treat them and to recognize, when incentivizing providers, what’s within and outside of their control,” Buntin said.

She said many practices treating socially high-risk patients are often disadvantaged because of a relative lack of high-paying private insurance contracts, difficulties collecting copayments, and a shortage of technology.

Robert Berenson, MD, a fellow with the Urban Institute, said several studies have found that pay-for-performance programs do not improve quality.

“It turns physicians into financial responders, and it’s a real concern,” Berenson said in an interview. “This study shows that we don’t know how to risk-adjust performance measures. We saw how the Hospital Readmissions Reduction Program penalized safety-net hospitals. We’re going down a slippery slope for a policy initiative that doesn’t work.”

Berenson said the study shows that the major issue is reporting.

He said grading physicians on resource use is “is completely hopeless. Patients may see 10 to 15 physicians. How can you hold one physician accountable who has no control over the other doctors?”

Tony Panjamapirom, PhD, senior research consultant at the Advisory Board, said if providers do not report in the future, “They will face the penalties. While the modifier program no longer exists, its components will still impact payment. It’s not exactly the same methodology, but CMS is still using value-based data in MIPS to assess payment adjustments.”.

“For program year 2017 and 2018, CMS will not assess on cost measures,” Panjamapirom said in an interview. “But starting in 2019, CMS will assess providers on cost measures. The cost component of the MIPS final score goes from zero in 2017-2018 to a whopping 30 percent in 2019.”

Panjamapirom advised providers to prepare for the upcoming cost measures that CMS will use, learn the episode-based measures, and examine the HCCs that will be used to identify patient complexity.

“Physicians also need to better understand the coding functions used in billing,” he said.

Seeking Accurate Metrics

Anders Gilberg, senior vice president of governmental affairs for the Medical Group Management Association (MGMA), called the value modifier “a flawed methodology.”

PVBPM “doesn’t accurately measure cost and quality,” Gilberg said in an interview. “CMS is having a hard time coming up with accurate components for cost.”

In a 2014 MGMA member survey about Medicare reporting programs, Gilberg said, the leading complaint was clinical relevance.

“The physicians didn’t see that the measurements were clinically relevant to the care they’re delivering,” Gilberg said. “And if they see it that way, they won’t participate.”

He said timing is another issue.

“Medicare is reporting data back to physicians 18 months after it was submitted, while some private payers are providing meaningful data to physicians in Medicare Advantage plans through real-time data interchanges,” Gilberg said. “Without that data you can’t engage with those patients to improve care. Even Congress knows this and said CMS should provide at least quarterly feedback.”

Finance leaders at hospitals that own physician practices should improve coordination on the hospital side of care delivery, Gilberg said.

“These measurements are moving toward cost components,” he said. “It’s all going to be total cost of care, and hospitals represent the largest spend in health care. There will be tension created by these programs, which will ultimately cause physicians to consider where to send their patients: to hospitals or ambulatory surgery centers.”


Mark Taylor is a freelance writer based in Chicago.

Publication Date: Monday, August 14, 2017