Medicare-Provider Penalties, Incentives Detailed in Report

Nearly 40% of health-care providers treating Medicare patients will have their payments docked 1.5% this year because they didn’t submit data on patients’ health to the government, the Centers for Medicare and Medicaid Services said.

More than 460,000 providers failed to comply with the Physician Quality Reporting System in 2013, of about 1.25 million eligible providers, according to the CMS report released last week. Some 70% of those that didn’t participate treat fewer than 100 Medicare patients a year, the agency said.

Meanwhile, nearly 642,000 providers did comply in 2013 and will earn a 0.5% boost in payments this year.

Launched in 2007, the federal quality-reporting program is one of several meant to measure and spur improvements in quality. Providers—including doctors, nurse practitioners, physical therapists and others who bill Medicare, the federal program for the elderly and disabled—initially earned bonuses for complying. The Affordable Care Act introduced penalties for not participating, starting this year.

Some 257,000 providers are also seeing their Medicare pay cut 1% this year for not meeting federal targets for using electronic medical records in 2013. Hundreds more in large group practices are being docked a further 0.5% to 1% this year under a complicated cost-and-quality adjustment, the Value-Based Payment Modifier.
Penalties increase each year, and are levied two years after the reports are due. Providers who fail to comply with all three programs this year face a combined 9% Medicare cut in 2017.

Doctor groups say the programs are confusing and time-consuming while offering little clinical benefit. In a survey of 1,000 practices by the Medical Group Management Association last year, 83% of respondents said the programs detracted from their ability to care for patients.

To avoid penalties in the quality-reporting system, in 2013 providers had to report data on at least one of more than 100 possible measures; this year, they must report data on nine. Those chosen most often included the percentage of patients whose blood pressure was checked during the visit; the percentage offered counsel on smoking cessation and the percentage asked which medications they were taking.

“These are not measures of physician quality—they’re more a reflection of the staff’s ability to code effectively,” said Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association. He speculated that some doctors found it less expensive to pay the penalties than hire additional staff to complete the paperwork, particularly if they treated few Medicare patients. As penalties increase, he said, some doctors might choose not to treat Medicare patients rather than comply.

The CMS report said participation in the quality-reporting program had grown from 15% of those eligible in 2007 to 51% last year. It also said federal officials are working to streamline the overlapping quality-reporting mandates so they are less burdensome. A spokeswoman said no official was available for additional comment Sunday.

The various programs are scheduled to be rolled into a single, comprehensive quality-reporting system under a law Congress passed this month that sets a new formula for calculating payments to providers who treat Medicare patients.

The law calls for more input from doctors in designing the new program, which will shift much more Medicare spending to programs that reward value rather than volume in delivering health-care services.

“There is some light at he end of the tunnel on this,” Mr. Gilberg said. “It’s incumbent on the physician community to step up and make it something that’s relevant to patient care.”

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