The Physician Quality Reporting System (PQRS) is a federal initative to improve the quality of medical care in the United States. The Centers for Medicare & Medicaid Services (CMS) administers the program, which is undergoing a transition from pay-for-reporting to pay-for-quality metrics. It is also transitioning from incentive payments to penalty charges.

History
The Physician Quality Reporting Initiative (PQRI) was announced in 2007 and required physicians to report on a minimum of three quality measures from July through December 2007.

The initial measures were determined by consensus organizations and posted on the CMS website. “Eligible Professionals” (EP) included physicians and physical/occupational therapists. Initially, an EP would have to report on 80 percent of suitable patients under each of the three measures. If physicians found that more than three measures were applicable in their practices, they would only need to report on those three measures.

Providers who met the standard for submitting quality data were able to earn a one-time lump-sum incentive payment equivalent to 1.5 percent of their total estimated allowable charges for the Medicare Part B Physician Fee Schedule. At that time, the program was more focused on getting physicians to meet the reporting requirements than on having true quality measures.

PQRI became a program permanent fixture in 2009, along with several changes that began to shape the current program. The overall payment for participation was raised to 2 percent of the provider’s estimated allowable Medicare Part B charges. Additionally, resources were allocated to provide feedback to physicians based on their results.

Other changes implemented over the years included the option for physician groups to submit data under a common identification number and the implementation of a registry reporting option, with 26 measures that are only allowed to be reported through a registry.

The current PQRS program was formalized with the passage of the Affordable Care Act, which increased the number of individual measures to 190 and the number of measure groups to 14. The incentive payment for participation in the program in 2011 was 1 percent of the provider’s Medicare Part B charges for that year. Physicians who participated in an increased manner with Maintenance of Certification could earn an additional 0.5 percent bonus.

Current structure
PQRS is now well established, although many physicians are unaware that the incentive portion of the program is now giving way to the penalty phase of the program. Although satisfactory participation in PQRS during 2014 will still generate an incentive payment of 0.5 percent of Part B submitted charges, physicians are already being assessed for potential payment penalties in 2015 and 2016.

For example, depending on their performance in 2013, physicians could see up to a 0.5 percent decrease in their Medicare payments in 2015, and physicians’ performance in 2014 could result in a 0.5 percent decrease in Medicare payments in 2016. The 2-year delay in payment penalties means that physicians can do nothing to improve a significant portion of their future payments because the die is already cast for those periods.

The penalties become much more severe in 2015 and 2016, where the subsequent payments in 2017 and 2018 can be reduced as much as 1.5 percent and 2 percent, respectively. Although many in the physician community vehemently opposed this program, the government is continuing to expand its scope. Therefore it is critical that physicians and physician practices report the appropriate quality metrics to CMS to avoid future Medicare payment adjustment.

NQS domains
The different measures that are available can be found on the CMS website and fall under the National Quality Strategy (NQS), which aims to improve the health of all citizens. The three aims of the NQS are as follow:

• Better care: Improve the overall quality, by making health care more patient-centered, reliable, accessible, and safe.
• Healthy people/healthy communities: Improve the health of the U.S. population by supporting proven interventions to address behavioral, social, and environmental determinants of health in addition to delivering higher-quality care.
• Affordable care: Reduce the cost of quality health care for individuals, families, employers, and government.

The following six domains of the NQS are designed to achieve these aims:

• making care safer by reducing harm caused in the delivery of care
• ensuring that each person and family are engaged as partners in their care
• promoting effective communication and coordination of care
• promoting the most effective prevention and treatment practices for the leading causes of mortality, starting with cardiovascular disease
• working with communities to promote wide use of best practices to enable healthy living
• making quality care more affordable for individuals, families, employers, and governments by developing and spreading new healthcare delivery models

Physicians need to understand the NQS domains because the selection of PQRS measures must be spread across different domains. Selecting measures from only one domain will not result in optimal participation with PQRS.

Another confusing aspect of PQRS reporting measures is that they are also used in the Meaningful Use Program for Certified Electronic Health Records. Certain CMS websites comingle the two programs, adding to the complexity of these initiatives.

Measures
The individual PQRS measures generally fall within one of the following three categories:

Process measures include screening for osteoporosis or assessing smoking risks. They report when a physician follows a certain guideline or performs what is considered best practice. It is commonly accepted that CMS is no longer interested in developing any additional process measures.

Outcomes measures include reducing intraocular pressure in patients with primary open-angle glaucoma by a specified percentage or documenting a plan of care to do so. They report the overall impact that a physician’s care may have on patients. These measures are considered to be better than process measures.

Overuse measures include waiting at least 28 days to perform imaging studies on patients with a primary diagnosis of low back pain. They target what are thought to be overused services that significantly increase the cost of healthcare delivery in the United States.

Because some measures are based on the percentage of patients who are affected by that particular measure in the physician’s practice, CMS also defines the “numerator” and the “denominator” to calculate that percentage. The denominator is the number of Medicare patients with the referenced ICD-9 code diagnosis whom the physician has treated within the defined period. The numerator is the number of patients within that denominator who are the subjects of the reported quality measure. Dividing the numerator by the denominator will calculate the percentage of patients affected.

Physicians can report either using individual measures or measures groups. To qualify for PQRS using individual measures, a physician must report on nine different measures across three different NQS domains. The physician can also report using a single measures group, but measures groups can only be reported through a registry.

Douglas W. Lundy, MD, is the Council on Advocacy liaison to the Communications Cabinet and a member of the AAOS Now editorial board.

Editor’s Note: This is the first of two articles on the Physician Quality Reporting System (PQRS). The second article will focus on ways that physicians can participate in the PQRS program.

Additional Information:
Introduction and history
CMS PQRS website