Alexandra E. Page, MD, discusses payment models.


Published 5/1/2016
Jackie Ryan

Clinical Quality and the Pathway to Payment

Upcoming Medicare performance measures may affect reimbursement
On Tuesday, March 1, 2016, George F. Muschler, MD, vice chair of the Performance Measures Committee (PMC), moderated the symposium "Clinical Quality and the Pathway to Payment" at the 2016 AAOS Annual Meeting. Dr. Muschler began by asking the audience to answer the following question: "Regarding the Physician Quality Reporting System (PQRS), right now I am …" and offered the following possible answers:

  1. fully compliant and expect to make money through quality reporting in 2018
  2. approaching compliance and hope to make money through reporting in 2018
  3. trying to figure out how to avoid penalties in 2018
  4. trapped without the compliance resources, and expect to pay penalties in 2018
  5. sitting back hoping this all dies a legislative death

After being polled via the audience response system, about one-third of the audience members reported that they are "trying to figure out how to avoid penalties in 2018."

"Clinical quality in the form of performance measures is an increasingly important topic for orthopaedic surgeons," explained Dr. Muschler, "as the government and private payers seek more accountability through pay for performance and other quality reporting programs.

"The repeal of the Medicare Sustainable Growth Rate formula in 2015 changed the landscape of quality reporting," he added.

Dr. Muschler described how the AAOS has adapted to these changes by establishing rigorous evidence-based processes for developing clinical practice guidelines, appropriate use criteria, and most recently, performance measures.

"AAOS has stepped up to the plate, but we need the entire orthopaedic community to be more involved," he said.

Stakeholders and politics
The AAOS PMC is spearheading such efforts, and is charged with establishing the capacity to produce and maintain quality measure sets for orthopaedic conditions. William T. Brox, MD, a member of the committee, shared a practical "nuts-and-bolts" approach, with an emphasis on how orthopaedic surgeons can use performance measures to prove the value of orthopaedic care.

Dr. Brox explained that conceptually, a performance measure—also called a quality measure or quality indicator—is an objective measurement of the quality of patient care.

"When designing a meaningful performance measure, one must consider its clinical relevancy and how it will impact the clinical work flow," he said.

The AAOS measure development process begins once a topic is identified. From there a multidisciplinary work group is convened to complete measure conceptualization, specifications, and testing. The final two phases in measure development are implementation and maintenance.

"Measure development can be a challenging process," said Dr. Brox, "and risk adjustment, attribution, and inadvertent consequences must be considered. There are few relevant orthopaedic performance measures in use currently. As part of our commitment to support AAOS members in the implementation of performance measures, the PMC evaluated all of the current 2016 Physician Quality Reporting System (PQRS) performance measures to determine which of them could be used by a majority of orthopaedic surgeons to satisfy the 2016 PQRS reporting requirements.

"The Orthopaedic Preferred Specialty Measure Set (OPS) provides a concise list of available 2016 PQRS measures most relevant to orthopaedic surgeons," he noted. "This set is designed to be a guide to assist orthopaedic surgeons in choosing measures applicable to their practice."

Dr. Brox emphasized that the OPS does not list required measures, but offers suggestions to orthopaedic surgeons.

"We recommend that AAOS members familiarize themselves with the measure titles, descriptions, and available reporting methods for each, as this may help determine their best reporting path," he said.

The complete OPS can be found in the Performance Measures section of the AAOS website.

Compliance options
The Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) final rule is scheduled for release in summer 2016, and AAOS Medical Director William O. Shaffer, MD, noted that federal agencies currently have substantial discretion with rulemaking.

"Because the current maze of performance measures and reporting processes is burdensome and does not translate to better care, the Academy is actively engaged in working with government agencies to help shape the regulations," said Dr. Shaffer.

He explained that the two planned MACRA payment models—the Merit-Based Incentive Payment System (MIPS) and the Alternative Payment Model (APM)—are not yet fully defined, but are expected to be largely based on current elements of the PQRS, the Value-Based Modifier (VBM), Meaningful Use (MU), and Resource Use.

"We have the opportunity to shape and influence the process," said Dr. Shaffer.

"The legislation is a framework and MACRA is just the beginning," he added.

Private practice perspective
Douglas K. Dew, MD, MBA,
focused his talk around this question: "What is your strategy for compliance?" He reminded the audience that both the U.S. Centers for Medicare & Medicaid Services (CMS) and private payers will require reporting on performance measures.

"Physicians in both private practice and academic settings need to understand the near-term implications of MACRA to their practice model," he said.

He explained that all physicians—especially those in states with a large Medicare population—will need to understand the "carrot-and-stick approach" that CMS will use to control costs and improve patient care.

"One of the biggest challenges we will need to overcome is learning how to collect data in an efficient manner as part of the normal physician workflow," he noted.

Payment implications
"Quality is key, but we need better options for specialists to report," argued Alexandra E. Page, MD, chair of the AAOS Health Care Systems Committee.

She outlined the MIPS and APM payment pathways, reminding the audience that details remain in flux, as the final rule has not yet been released.

"Comparison of the two payment tracks suggests the reimbursement plan heavily favors the APM arm," explained Dr. Page, "with incentive payments of 5 percent for 6 years starting in 2019 for providers and practices that meet the requirements for participation.

"Unfortunately," she continued, "it appears that MIPS will be the payment pathway that orthopaedic surgeons will need to follow until eligible APMs are developed."

She briefly explained that the three components of the current value-based payment system will be combined into one MIPS score using elements of PQRS, VBM, and MU. The blended score will determine a mean above which bonus payments are possible and below which penalties will be assessed. Providers will receive a composite score of 1 to 100 based on their performance on the measures in the following four areas:

  • quality measures
  • efficiency measures
  • meaningful use of electronic health records
  • clinical practice improvement activities

Each year, CMS will establish a threshold score based on the median or mean composite performance scores of all providers measured during the previous performance period. Providers scoring above the threshold will receive bonus payments. Those providers with higher performance scores will receive proportionately larger payments. Providers scoring below the threshold will be subject to payment reductions. These negative payment adjustments will be capped at 4 percent in 2019, 5 percent in 2020, 7 percent in 2021, and 9 percent in 2022.

For more information about Performance Measures or PQRS, please visit

To learn more about MACRA, visit the CMS website at

Jackie Ryan is manager, performance measures, at AAOS. She can be reached at