Many physicians are aware of the push by the Medicare program to move away from a fee for service physician payment model to one which recognizes higher quality and lower cost care.  However, few physicians have a good understanding of how such payment models would work and how their practices would fair under them.  This week, the Centers for Medicare and Medicaid Services (CMS) released some important  data regarding one of these value-based payment programs: the Value Modifier program.

The Value Modifier program seeks to reward physicians who provide high quality and low cost care by increasing their reimbursement by a “value modifier”.  Physicians who do not score favorably under the program will, in turn, be subject to a downward payment adjustment.  This week, CMS published a summary of the results of the first year of the program which initially applied only to physician groups of 100 or more.

In the initial year of the program, groups subject to the Value Modifier had the option to participate in a tiering program (which will be mandatory starting in 2016).  Under this program, depending on their cost and quality scores, groups would either be subject to an upward payment adjustment, a neutral payment adjustment or a downward adjustment.  Of 691 group practices subject to the Value Modifier, only 127 initially elected to participate in the tiering program.  Of these 127 groups, only 106 submitted sufficient data to receive both cost and quality scores for tiering purposes.  According to the published results, 14 groups will receive an upward adjustment; 11 groups will receive a downward adjustment and 81 groups will have a neutral adjustment (i.e., no adjustment ).  None of the groups earned the highest modifier adjustment available for quality and low cost.

The Value Modifier program will apply to all physician groups and solo practitioners beginning in 2016.  Physicians need to be paying careful attention to this and other value-based payment programs as it is clear that CMS is serious about shifting payment arrangements in this direction.