American College of Physicians: Internal Medicine — Doctors for Adults ®

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Qualify for quality: CMS offers 1.5% reporting bonus

From the May ACP Observer, copyright © 2007 by the American College of Physicians.

By Brian Whitman

As part of the Tax Relief and Healthcare Act of 2007, Congress mandated the creation of a new Medicare program called the Physician Quality Reporting Initiative (PQRI). The program will start on July 1 and pay physicians a 1.5% bonus for successfully reporting on quality measures through the claims process for services furnished through Dec. 31. In most cases, a physician must report on at least three of the 74 PQRI quality measures for at least 80% of the eligible patient encounters to receive the bonus payment. ACP Observer will be covering this program in both this column and next month's column and the College will make PQRI information available through other forums.

Q: What is the program?

A: The PQRI is a new Medicare program that allows physicians to be paid for reporting certain quality measures on their Medicare claims. The quality measures are intended to determine if physicians are providing evidence-based care when seeing patients who have specific conditions and/or meet specific requirements. The PQRI pays physicians a bonus for successfully reporting on quality measures. It is not a pay-for-performance program in which a physician is financially rewarded or penalized for how he or she met the performance standard. Nor does the PQRI try to assess the health outcomes of beneficiaries.

Q: How does it work?

A: The PQRI will pay physicians a bonus payment if they report on quality measures on a limited number of patients to whom the measures apply. This is a voluntary program and physicians may still continue to participate in Medicare as they do now if they choose not to participate in PQRI.

Q: How will I report the measures?

A: The measures will be reported by adding additional procedure codes to the CMS-1500 form or electronic equivalent. The form would be completed in the same manner as it would be normally and the additional code or codes would be placed on subsequent procedure code lines. Many of the measures will be reported using CPT Category II codes, which are found in the back of the CPT book and include many performance measures. If a CPT II code is not available for the specific measure, CMS will instruct on reporting healthcare common procedure code set (HCPCS) codes, in a "G code" format.

Q: Do I have to report on all of the measures that apply to a patient?

A: No. A physician should choose at least three measures on which he wishes to report on his patients that are relevant to the practice. In the rare instances in which a physician has fewer than three applicable measures that apply to his practice, he should report on all of those that apply. It would be unlikely that an internist or internal medicine subspecialist would have fewer than three applicable measures, so the list should be carefully reviewed.

A physician may want to report on more than three measures to provide some leeway in case he or she fails to meet the 80% threshold needed for reporting on the selected measures. This approach may be beneficial because Medicare will provide no feedback on the accuracy of reporting during the reporting period. Medicare will only notify the physician of the percentage which he or she successfully reported on each measure after the reporting concludes on Dec. 31.

For example, a physician would qualify for the 1.5% bonus if CMS determined that he or she reported on: measure 1-90%; measure 2-87%; measure 3-77%; and measure 4-95%. The full list of measures is available online.

Q: Do I have to tell Medicare that I will participate in the PQRI and which measures I have chosen?

A: There is no registration process for the PQRI and no information is required from the physician. Medicare will determine which physicians are participating and on which measures they are reporting by its review of submitted claims.

Q: Do I have to report these measures on all of my patients, even if they are not applicable?

A: No, the quality measures should only be reported on applicable patients as determined by CMS. CMS will release a document which will specify precisely when a measure should be reported, identifying the CPT II, "G", and International Classification of Diseases (ICD-9) codes applicable to each measure.

In the case of internists, the specifications will likely indicate that the physician should report a measure on any evaluation and management service code in which certain ICD-9 codes related to the disease state are reported on the claim form. There will also be measures that apply to procedural and surgical codes, but many of those will not apply to the practice of an internist.

The measure specifications will be reviewed in the June issue of ACP Observer, after they have been released. When they are released, the measure specifications will be available online.

Q: Do the measures have to be reported at the same time as the CPT codes used to bill for the medically necessary services to which the measure applies?

A: The quality measures must be reported on the same claim form as the corresponding CPT codes for which Medicare will pay for tracking purposes. This precludes a physician from submitting all quality measure codes for all eligible encounters at the end of the reporting period.

Q: What will I be paid for reporting these additional quality measure codes?

A: CMS will calculate if a physician has reported on the three selected quality measures in at least 80% of the appropriate circumstances. If that threshold is reached, the physician will receive a single payment for 1.5% of Medicare allowed charges generated by the physician during the last six months of 2007. It is important to note that payment is not 1.5% of the payments for those claims that included quality information, but 1.5% of Medicare allowed charges.

Q: I heard something about a cap on the bonus payment? What is that?

A: The legislation that created the program included a cap that intends to limit the amount of the bonus payment to physicians who choose measures that were applicable to very few of their patients in order to submit very few performance measures through the claims process. This cap would limit the amount of money received in the bonus if a physician submits very few measures.

A physician can likely avoid the potential of being subject to any cap by choosing appropriate measures that are relevant to more than a handful of patients. While ACP projects that the cap is unlikely to affect the typical internist, information on how CMS calculates the cap is on the College's Web site.

Q: Does my entire group have to participate in order to receive the bonus?

A: No. CMS will make its calculation of who qualified for the bonus on the individual physician level, meaning that entire groups need not participate. A physician must ensure that 80% of his own applicable claims include the quality measures. This will make it even more important to ensure that the correct physician is referenced as the provider of the service when a bill is submitted. The bonus payment, however, will be made to the tax identification number of the group and not to the individual physician.

Q: When will the payment be distributed?

A: The payment will be distributed some time in the middle of 2008 to the group tax identification number. It is unclear how this disbursement may appear for those with electronic remittance advice because there is not a single claim that the payment is for.

Q: Will the PQRI continue in 2008?

A: The legislation that established the PQRI provides an expectation that the program will continue in some form in 2008, although Congress would need to take action to specifically fund a 2008 program. While it is certainly possible that Congress could revise—perhaps substantially—the program, the experience of participating in the PQRI in the last half of 2007 is likely to be beneficial regardless of program changes in 2008 or beyond.

Q: What should I do now to prepare?

A: Physicians should review the list of measures to familiarize themselves with the information that Medicare is seeking in this program. Understanding that this is a voluntary program, physicians should examine the financial costs and benefits to determine if it will be best for their practices to participate in this program.

ACP will continue to make information and reporting tools available to internists. We will announce these resources in College publications as they become available. Next month, this column will provide more information on the PQRI, including performance reports, examples of the new reporting codes, and more details on measure specification.

Brian Whitman is Senior Analyst for Regulatory and Insurer Affairs in ACP's Washington office.

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