Medicare Pay for Reporting Program Kicks Off July 1

First step to performance-based pay?

May 2007

By Mary Ellen Schneider
Elsevier Global Medical News

Starting July 1, physicians who report on selected quality measures will have a chance to earn a small bonus payment from Medicare.

The program, called the Physician Quality Reporting Initiative, was mandated by Congress and offers incentive payments to physicians who report on one to three quality measures. By doing so, physicians can earn a bonus of up to 1.5% of their total allowed Medicare charges during the 6-month reporting period.

Although even the maximum compensation isn't enough to make anyone rich, some physician organizations are advising their members to take a good look at the program because it may be the first step toward a performance-based payment system.

"By involving ourselves in the process we can have feedback," said Dr. James Stevens, a neurologist in Fort Wayne, Ind., and a member of the medical economics and management committee of the American Academy of Neurology.

Deciding whether participation makes sense is a calculation that has to be made by each practice, Dr. Stevens said. Those who give it a try will get a confidential report from the Centers for Medicare and Medicaid Services about how they are doing and have a chance to provide information on what works and what doesn't.

"This experience will likely be helpful in the future," said Brett Baker, director of regulatory affairs at the American College of Physicians, adding that although the bonus payment is not significant, having some type of financial incentive attached may be enough to get people's attention.

To get started, physicians must familiarize themselves with the program and the measures and figure out for how many patients they will be able to gather and report data, Mr. Baker said. They also should consider the technical issues involved in reporting and how feasible it will be to make those changes.

CMS officials have selected 74 quality measures that can be used by physicians across specialties; if 4 or more measures apply, physicians must report on at least 3 measures for at least 80% of cases in which the measure was reportable.

If no more than three measures apply, each measure must be reported for at least 80% of the cases in which a measure was reportable.

Emergency physicians should focus on seven measures specifically developed with the input of emergency physicians, recommended Angela Franklin, director of quality and health information technology at the American College of Emergency Physicians. Those measures address aspirin at arrival for acute myocardial infarction, chest pain, syncope, and pneumonia.

Emergency physicians should choose at least three measures that cover conditions most often seen in their EDs, she added. That strategy can help ensure enough instances of reporting to meet the initiative's 80% reporting threshold.

Keep in mind that, while some of the measures are similar to the hospital quality measures in CMS' Hospital Compare initiative, they are separate--and they represent a separate reporting burden, Ms. Franklin explained.

Although payments will be provided to the holder of the tax identification number, the results will be analyzed at the physician level, CMS said. As a result, Medicare officials are requiring that the National Provider Identifier number be used on all claims.

The reporting period will run from July 1 through Dec. 31, 2007, and all claims must reach the National Claims History File by Feb. 29, 2008.

Any Medicare-enrolled eligible professional can participate in the program, regardless of whether they have signed a participation agreement with Medicare to accept assignment on all claims. In addition, physicians are not required to register to participate in the Physician Quality Reporting Initiative.

Medicare will use a claims-based reporting system for the program and will require practices to enter either CPT Category II codes or temporary G-codes where CPT-II codes are not available. The codes can be reported on either paper-based CMS 1500 forms or electronic 837-P claims. The quality codes should be reported with a $0.00 charge.

The bonus payments earned will be made in a lump sum in mid-2008, CMS officials said. Physicians can earn up to a 1.5% bonus, subject to a cap. The cap is structured to ensure that those who do more reporting will receive higher payments.

Under the law that established the Physician Quality Reporting Initiative, the program is excluded from a formal appeals process. However, CMS officials said they plan to establish some type of informal inquiry process.

In addition, physicians who participate will receive a confidential feedback report from the CMS sometime in 2008. However, the quality data reported in 2007 will not be publicly reported.

For 2008, the CMS is required under statute to propose the new measures in August 2007 and finalize them by Nov. 15, 2007. Next year's measures are likely to include structural measures, such as the use of electronic health records or electronic prescribing technology.

Because the CMS has selected measures that have been vetted by physician organizations and reflect current medical practice, most physicians should not have a problem with that aspect of the program, said Dr. Janet Wright, a cardiologist in Chico, California, and chair of the performance assessment task force of the American College of Cardiology.

The hurdle will be in changing the workflow in the office, Dr. Wright said.

Emergency physicians should work with their departments to devise the workflow process needed to report the measures, Ms. Franklin recommended, as well as test the submission of measures to CMS before the program's July 1 start.

More information on the Physician Quality Reporting Initiative is available online at

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