December 2012
Feature Story

Julie McDowell

With the CMS Physician Quality Reporting System expanding in 2013, now is the time for pathologists to prepare to participate—or prepare for the penalties of not participating, advises CAP Economic Affairs Committee member Emily E. Volk, MD.

“The financial impact on pathologists who do not participate will be magnified in 2015, based on performance in 2013,” she explains, adding that the expansion is yet another way the Centers for Medicare and Medicaid Services is shifting from the current fee-for-service reimbursement to a payment system based on quality.

Now and into next year, pathologists qualify for incentives for reporting on three quality measures. The PQRS program includes five CAP-developed quality measures that pathologists may choose to report (see below “PQRS pathology-related measures”). The CAP has submitted three additional measures to the CMS for 2014. They are for lung cancer reporting (biopsy/cytology and resection specimens) and melanoma reporting.

The primary changes for pathologists beginning next year involve more ways to participate, including group reporting options, as the CMS laid out in the final 2013 physician fee schedule. But more opportunities also mean greater complexity. Most important, providers who fail to participate successfully in the PQRS program in 2013 will face a 1.5 percent deduction in each CMS part B payment beginning in 2015. In addition, providers in group practices of 100 or more will be subject to a value-based payment modifier adjustment in 2015 determined by their 2013 PQRS participation. (See Figs. 1–3 to determine participation method and the consequences associated with each option.)

Of course, there are also financial incentives to participate. Eligible providers who successfully participate in 2013 will receive a 0.5 percent bonus based on that year’s CMS part B claims. This bonus will be a single payment to the provider, estimated to arrive in October 2014. If providers report on only one measure, they can avoid the 2015 penalty; however, they will not receive the bonus for 2013. The exception is if there is only one measure that applies to the provider. In this situation, the provider is eligible for the bonus.

One Physician Quality Reporting System feature previously not open to pathologists is the registry reporting option. Individual providers who did no claims reporting in 2012 but want to participate in 2012 can use this option. Through February 2013, providers can retrospectively participate by reporting on three measures through the registry reporting option and qualify for a 0.5 percent bonus based on 2012 part B billing. (Twenty-one CMS-approved registries have at least four of the five pathology measures available.)

“Many members who have been doing claims-based reporting are not sure they are doing so successfully, as it’s a confusing system fraught with error potential,” says Dr. Volk, medical director of the Department of Pathology and Laboratory Medicine, Baptist Health System, San Antonio. “For these members the registry reporting option should be a consideration. Even though you have to report a higher success rate on these measures [80 percent versus 50 percent for claims-based reporting], providers who have reported through the registry have historically been more successful than those doing claims-based reporting.”

In addition to the registry option, the final rule for the 2013 physician fee schedule contained a new PQRS group practice reporting option. This option allows groups with two or more members to participate and report, as a group, on three measures. By participating through the registry group reporting option, all group members under the same tax identification number will get PQRS credit in 2013 and avoid the penalty in 2015. Practices must notify the CMS by Oct. 15, 2013 if they plan to choose the group reporting option. Notification should be done through the agency’s Web interface, which is to be set up for this purpose.

The PQRS details in the proposed 2013 physician fee schedule also contain changes for group practices of 100 or more members. Group practices with 100 or more eligible professionals will be subject to the value-based payment modifier, or VBM, beginning in 2015. The VBM applies to physicians in those group practices beginning in 2015 based on 2013 PQRS participation.

Members of these group practices who want to avoid an additional one percent deduction of their Medicare part B payments from the VBM must choose the PQRS group practice reporting option by Oct. 15, 2013. “In essence, providers in these groups are facing a potential 2.5 percent downward adjustment, when combining the PQRS penalty with the VBM,” Dr. Volk explains. “It’s important that groups of 100 or more notify Medicare by Oct. 15, 2013 in order to avoid this additional deduction.”

The group practice also needs to determine whether to elect to have its value-based payment modifier calculated using either the “quality tiering” or “no election” option. Choosing the no election option effectively sets the VBM at zero percent. Group practices choosing quality tiering have the potential for higher reimbursement based on their cost and quality score or a –1 percent adjustment for high-cost, low-quality providers.

There is also potential for a slight upward adjustment if group practices elect to have their VBM based on both their performance on measures and the cost of care through quality tiering.