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AAOS Now

Published 3/1/2015
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Brian McCardel, MD

Nonparticipation Has a Price

Physicians face penalties from quality initiatives

This year, for the first time, many physicians began receiving negative payment adjustments to their Medicare reimbursements—penalties for not participating in the Physician Quality Reporting System (PQRS). For many surgeons, PQRS started out as just another Federal acronym, with little impact on their practice or their reimbursements. Adding a modifier to the claim didn’t seem to be that much effort, the documentation requests were pretty modest, the work was largely done by the surgeon’s staff, and the financial impact was modest.

However, both the effort to comply and the financial implications of nonparticipation have increased over the years. As PQRS shifts from using incentive payments to encourage reporting into the penalty phase, many surgeons are paying more attention, or wishing that they had previously.

Because the payment adjustments are delayed by 2 years, practices that failed to report PQRS data in 2013 face a penalty of up to –1.5 percent on all 2015 Part B reimbursements. Likewise, participation and reporting in 2014 will affect Medicare payments next year, and participation this year will affect 2017 reimbursements.

Failure to report under PQRS compounds the penalties. For example, the recent 2015 Physician Fee Schedule Final Rule from the Centers for Medicare & Medicaid Services (CMS) projects a penalty of –9 percent of all Part B payments in the 2017 calendar year for groups of 10 or more eligible providers (EPs) that do not participate in all three programs. (See “CMS Releases 2015 Fee Schedule Final Rule,” AAOS Now, December 2014.)

Although reporting in prior years can’t be changed, 2015 starts a new reporting year, with associated payment adjustments (read “penalties”), as summarized in Table 1. In addition to PQRS, federal quality programs include Value-based Modifier and Meaningful Use, Stage 2 (MU2). (See “Quality Strategy Enters New Phase,”)

On the other hand, informed reporting of appropriate PQRS measures can simultaneously meet a significant number of the requirements under MU2.

Selecting measures
PQRS is based on the National Quality Strategy (NQS) published in 2011 by the Agency for Healthcare Research and Quality for the Department of Health and Human Services. The NQS includes six domains that drive measures development and selection. Most PQRS reporting involves selecting nine measures drawn from three different domains.

At a minimum, orthopaedic surgeons should take the following factors into consideration when selecting measures for reporting:

  • clinical conditions usually treated
  • types of care typically provided (preventive, chronic, acute)
  • settings where care is usually delivered (office, emergency department, surgical suite)
  • quality improvement goals for 2015
  • other quality reporting programs in use or being considered

The mechanisms of PQRS reporting are beyond the scope of this article, but options include the following:

  • certified EHR technology
  • registry reporting (data collected by provider(s) and submitted to registry)
  • Qualified Clinical Data Registry (registry collects and reports data on behalf of provider[s])
  • Group Practice Reporting Option

Frequently asked questions
How much does this impact me, and when?

The number of Medicare EPs in the practice will determine the degree and timing of the impact. Larger volume means larger penalties. Do not forget that there is a 2-year gap between reporting and penalties; 2015 PQRS reporting will affect 2017 reimbursements. In addition, the practice model (employed, group of 10 or more EPs, practices of 1 to 9 EPs) will affect the methods for reporting and the scale of the penalties.

Are there exemptions from needing to report?

Those surgeons participating in Medicare Shared Savings Programs and Pioneer accountable care organizations will need to report in a different manner. Beyond that, no. (However, a hardship exception may apply under MU2; see “Not Yet Ready for Stage 2 Meaningful Use?”)

Where can I find out more?

Directory of past and upcoming Medicare Learning Network presentations, with associated slideshows and transcripts.

Information from AAOS on PQRS

Information from CMS on PQRS

Persistent attention to this area is clearly required as the programs continue to become more complicated, and the penalties are growing.

Brian McCardel, MD, is a member of the AAOS Health Care Systems Committee.