HEALTH INDUSTRY ONLINE - PQRI For Physicians And VBP Update

The Centers for Medicare & Medicaid Services (CMS) is currently working to implement pay for performance programs for hospitals and eligible professionals providing services to Medicare patients. The Physician Quality Reporting Initiative (PQRI)¹ and Hospital Value-Based Purchasing (VBP)² programs are designed to reward performance and improvement in healthcare delivery, while providing consumers with information that will assist them in making proactive decisions when choosing a healthcare provider. With Hospital VBP awaiting congressional approval and PQRI reporting beginning next week, healthcare providers should take notice, as pay for performance (P4P) is not cooling off anytime soon.

PHYSICIAN QUALITY REPORTING INITIATIVE (PQRI)

Next week, CMS will begin PQRI, which establishes financial incentives for eligible professionals to participate in a voluntary quality-reporting program. Participating physicians and other eligible professionals, including physical therapists and nurse practitioners, who successfully report may earn a 1.5% bonus based on allowed charges for covered professional services furnished during the reporting period of July 1 through December 31, 2007. Dr. Tom Valuck, the CMS Director for Value-Based Purchasing, described the PQRI as a step "to get doctors engaged in reporting" before CMS increases the measures over time and begins public reporting. Dr. Valuck continued, "If physicians want or need a practice year, this is it."

PQRI MEASURES

PQRI, authorized under the 2006 Tax Relief and Health Care Act of 2006 (TRHCA), implements a pay for performance system based on 74 measures of performance. The proposed measures address various aspects of care such as prevention, management of chronic conditions, acute episode of care management, procedure-related care, resource utilization, and care coordination. While not all measures will apply to each type of professional, PQRI participants will select measures that address the services they provide to their patients. For example, measures may be selected based on conditions a clinician treats, type of care provided (preventive, chronic, acute), or settings of care (office, ED, surgical suite).

REPORTING MEASURES

Under the 2007 PQRI, physicians will report performance through specific quality-data codes representing each clinical action being measured. Quality-data codes will be added as a line item on the service claim and recorded in the administrative claims process. Each measure has a reporting frequency requirement for each eligible patient seen during the reporting period (report one-time only, report once for each procedure performed, or report for each acute episode). Additionally, some measures include performance timeframes related to the clinical action such as "within 12 months" or "most recent." In order to qualify for the all-or-nothing bonus payment, a physician must report satisfaction of each quality measure in at least 80% of the cases in which the measure is reportable. For professionals reporting four or more measures, the 80% requirement must be satisfied for at least three measures.

While no prior registration is required for a physician to participate in the PQRI program, reporting professionals must have a National Provider Identifier (NPI). A physician's NPI will be used to identify the "Rendering Provider" for each quality-data code. Claims may be submitted either electronically or as a paper claim. However, as part of its initiative, CMS is encouraging the adoption of healthcare IT and plans to begin measuring efficiency and doctors' use of technology to advance quality of care.

INCENTIVE PAYMENTS

Incentive payments earned by participating physicians and other eligible professionals will be paid in mid-2008 as a lump-sum bonus. In order to receive the bonus, all claims must be received by Medicare's National Claims History (NCH) file on or before February 29, 2008. Submissions will be analyzed by an independent PQRI contractor, who will evaluate PQRI data to determine the eligibility for a bonus and calculate the bonus amount.

PQRI PUBLIC REPORTING

The 2007 PQRI will not publicly report quality information at the individual-professional, group practice, or Taxpayer Identification Number (TIN) level. Some information about participation, reporting, and performance rates aggregated at state-, regional-, or national-average levels may be made available to the public. CMS will provide confidential feedback reports to participating eligible professionals at or near the time participants receive their lump sum bonus payments. These reports will be based on the 2007 PQRI quality data reported by the participating eligible professionals for services provided between July 1 and December 31, 2007. The confidential feedback reports for participating professionals are expected to contain reporting and performance information, but the exact format and content of the reports has not yet been determined.

PREPARATION

Eligible professionals who plan to participate in the 2007 PQRI should familiarize themselves and their office staff with the PQRI measures that apply to their patient population. Eligible professionals are encouraged to test their systems and practice their readiness for PQRI reporting. For testing purposes, CMS has designated a test code which may be used before July 1, 2007, the start date for PQRI reporting. CMS is encouraging professionals to review the measurement list and specifications on the CMS website, choose the measures which are most applicable to their practice, discuss the reporting system with office staff, and make sure all reporting software is working properly.

HOSPITAL VALUE-BASED PURCHASING (VBP)

Authorized under the Deficit Reduction Act of 2005 (DRA), CMS has also developed the Hospital VBP Program to provide incentives for hospitals to provide care that is "safe, effective, timely, patient-centered, efficient, and equitable."³ Hospital VBP aims to reward hospitals that improve their quality performance as well as those that achieve high levels of performance. Currently, CMS has a VBP proposal in clearance and scheduled to go to Congress for authorization this summer. The proposal should include the results of the hospital P4P program begun in September 2006 that has so far involved voluntary participation of 98 percent of U.S. hospitals. If approved, Hospital VBP is scheduled to begin October 1, 2008.⁴

The VBP program would use both financial incentives and public reporting to drive quality improvement. VBP plans to build on the foundation established by the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU), which provided payments to hospitals that publicly reported their performance. In addition to rewarding reporting, VBP also seeks to provide incentives for hospitals meeting performance and improvement standards. The proposed Hospital VBP plan would replace RHQDAPU, employing public reporting and financial incentives for better performance as tools to encourage improvements in clinical quality, patient-centeredness, and efficiency.

PERFORMANCE ASSESSMENT MODEL

Hospital VBP would reward hospitals for performance based on attainment in the measurement year or improvement from the prior year's baseline performance, allowing all hospitals to engage in the program. The plan would establish a minimum threshold to receive incentive payments and a benchmark at which a hospital may receive its full bonus. Hospitals with scores between the minimum threshold and the benchmark would receive incentive payments based on the percentage of points earned out of the total points possible.

Hospital VBP plans to provide incentives for Hospital performance attainment and improvement:

Attainment - A hospital may receive 0 to 10 points, based on where it scores for a measure relative to the attainment threshold and benchmark. The attainment threshold establishes the minimum level required to receive attainment points and the benchmark represents the highest payment available for a single measure. If the hospital's score is equal to or greater than the benchmark, then the hospital receives 10 points for attainment.

Improvement - The improvement range would allow hospitals to receive payments for improvement from the prior year's performance. A unique improvement range (0 to 9 points) for each hospital on each VBP measure would be established to define the distance between the hospital's prior year score on a measure and the national benchmark for the measure. If hospital does not improve on a certain measure, it would receive 0 points.

VBP PUBLIC REPORTING

Hospital VBP will also promote transparency in quality through public reporting. CMS plans to display the performance results of all participating hospitals in an effort to encourage improved quality of care and help Medicare beneficiaries choose a quality provider. CMS hopes to build upon the existing Hospital Compare website and make results available on the CMS website in an effort to make information available and understandable to participating hospitals and consumers.

¹See the CMS website: http://www.cms.hhs.gov/PQRI for more information on PQRI.
²See the CMS website: http://www.cms.hhs.gov/center/hospital.asp for more information on Hospital VBP.
³U.S. Department of Health and Human Services Medicare Hospital Value-Based Purchasing Options Paper, 2nd Public Listening Session (April 12, 2007). See our previous Health Industry Online (March 3, 2007) for a discussion of the Hospital VBP 2nd Public Listening Session.
⁴See our previous Health Industry Online (April 18, 2007) for a discussion of CMS pay for performance programs.