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Back to the blogOct 11, 2017

What Should You Know About the Value-Based Modifier System?

What Should You Know About the Value-Based Modifier System?

A critical part of healthcare reform is The Centers for Medicare and Medicaid Services (CMS) focus on high-quality service and low cost of care. There is no clearer evidence of this effort than in the Value-Based Payment Modifier (VM) program that works in conjunction with the Quality and Resource Use Reports (QRURs). One benefit that comes with engaging an EHR consulting company like TempDev is practitioners can learn the ins and outs of this process to ensure not only the best possible patient outcomes but high performance and low-cost VM scores that may affect the practice revenue. What do you need to know about the Value-Based Modifier system?

What is the Value-Based Payment Modifier?

The Value-Based Payment Modifier system is a mandate detailed in the 2010 Affordable Care Act (ACA). The U.S. healthcare system is undergoing a regulatory overhaul the includes electronic health records along with a change in the payment system for Medicare and Medicaid.

CMS describes the VM program as something used as part of a larger shift to improve quality and efficiency in the healthcare industry. The Value-Based Payment Modifier system adjusts payments based on the quality of care offered by physicians, groups or other eligible professionals. That is a significant transition from the traditional fee-for-service model.

CMS calculates a VM rating for each practice based on a composite quality and cost score. The quality option is based on six factors:

  1. Clinical process/effectiveness

  2. Patient and family engagement

  3. Population/public health

  4. Patient safety

  5. Care coordination

  6. Efficient use of medical resources

These scores are tallied from data provided on the QRUR.

The cost score originates from two different components:

  • Per capita costs for all attributed beneficiaries - A cost measure based on primary care services received.

  • Per capita costs for beneficiaries with specific conditions - Cost measures for condition-specific services. The four conditions included are diabetes, COPD, coronary artery disease and heart failure.

CMS began phasing in the VM adjustments in 2015 and is required by the Affordable Care Act to apply them to all practices by 2017. For those in the Merit-based Incentive Payment System (MIPS), the VM has been replaced by the Cost Category and all payment adjustments are lumped into all categories.

What are the VM Changes for 2018?

As with most aspects of the Affordable Care Act, VM changes come in stages. In 2018, CMS will apply the Value Modifier to payments due to all eligible professionals. That list consists of:

  • Physicians

  • Physician Assistants

  • Nurse Practitioners

  • Clinical Nurse Specialists

  • Certified Registered Nurse Anesthetists

This includes those who work as solo practitioners or as part of a group of two or more eligible professionals.

The VM scoring practice works on a two-year delay, meaning the 2018 VM is based on the performance period for 2016. The VM will result in an upward, neutral or downward payment adjustment from the CMS based on the annual QRUR available to all group and solo professionals in the fall of 2017. CMS identifies each group by its Tax Identification Number (TIN) and practitioners can request a review of the VM if they feel there is an error.

According to the American Academy of Otolaryngology-Head and Neck Surgery, in 2017, solo practitioners with an upward or neutral VM score could get up to a 2 percent adjustment. Groups with 10 or more eligible professionals who showed a downward score automatically received a 4 percent adjustment. Those numbers may change for 2018, though.

The QRUR is available for download from the CMS portal using the Enterprise Identity Management account. This is something that EHR consulting services can help their clients locate and decipher.

Understanding how the Value-Based Payment Modifier works is essential for any medical practitioner who treats beneficiaries of Medicare or Medicaid. Having an EHR consulting firm, such as TempDev, that specializes in quality consulting is the key to a better VM score and higher payments.


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