Three Problems with Medicare’s Value-Based Payment Modifier

There are a number of reasons the value-based payment modifier initiative could be an unfair way to determine physician reimbursement. Here are three of them.

Thousands of physicians received an e-mail from CMS last month with links to reports showing how the quality and cost of care they provided their Medicare patients in 2010 matched up to other physicians of similar specialties.

Though only select physicians practicing Kansas, Iowa, Missouri, and Nebraska received the reports, all physicians need to pay attention.

The reports are part of the value-based payment modifier initiative which is still being developed but is set to start in 2015. At that time, select physicians will either receive bonuses or reduced reimbursement based on the quality and cost of care they provided to their patients in 2013. In 2017, the value-based modifier will apply to all physicians who treat Medicare patients.

The premise is great. Payment based on quality and cost has the potential to move physicians away from traditional fee-for-service and therefore, payment based on productivity, such as RVUs. Ideally, it would allow physicians to spend more time with their patients, focus more on quality of care, and work to reduce healthcare spending costs. Essentially, reimbursement would be based on working smarter, not harder.

But physicians and associations are voicing doubts over whether reports like the ones just e-mailed are really a fair way to accomplish those goals.

“We continue to have serious concerns that there are too many unresolved issues with these reports for CMS to use them to determine physicians’ bonuses and penalties for 2015, based on their scores in 2013,” pediatric neurosurgeon Peter W. Carmel, president of the AMA, told American Medical News. “These issues must be resolved and physicians must be given enough time to transition to this system before the reports, which contain incomplete data, can be used to influence payment decisions.”

In addition to reporting issues, there are a number of reasons the value-based payment modifier initiative could be an unfair way to determine physician reimbursement. Here are three of them.

Patient Problems:

If a physician is responsible for treating only a few Medicare patients, one or two very sick patients could unfairly skew a physician’s overall performance, notes Jordan Rau of Kaiser Health News, in a video appearing on the organization’s website.

In addition, the quality and cost of care a physician provides to his patients is often out of his hands. For instance, if a patient simply won’t comply with his physician’s treatment recommendations, the patient is going to have a poor health outcome.

Comparison Conflicts:

Specialists see many types of patients. Some focus on patients with healthcare issues that are, naturally more costly to treat than others. In some cases, comparing one specialist to another may be unfair.

For instance, the cost of care provided to Medicare patients could be low for one internist, but high for another internist who is treating patients with multiple chronic conditions in a hospital, neurologist Michael Kitchell told American Medical News.Teamwork Troubles:
If a physician is responsible for treating a Medicare patient and he refers him to another physician for additional treatment, the physician’s reimbursement could be influenced by that other physician, notes PhysBizTech. That other physician could drop the ball when treating the patient, resulting in increased cost or reduced care quality, or both.

In addition, as efforts to improve care coordination intensify, reimbursement problems related to a physician’s need to rely on another physician could intensify as well.

What do you think of the value-based payment modifier? Do you think the drawbacks outweigh the opportunities?