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Review Medicare incentive and penalty programs for 2013

From the February ACP Internist, copyright 2013 by the American College of Physicians

By Neil Kirschner

Physicians and their practice managers should take the time to review and plan for the many payment programs offered through the Centers for Medicare and Medicaid Services (CMS), both the incentives and payment adjustments (translation: penalties).

Payment programs are an effort to improve the quality and efficiency of health care delivery. The bonus payments and adjustments are assessed as a percentage of total allowed charges covered by the Medicare Part B Physician Fee Schedule. The following is a brief description of these programs for 2013.

Medicare Electronic Prescribing (eRx) Program. Eligible professionals, which includes most practicing physicians, can earn a consolidated bonus payment in 2014 of 0.5% based on 2013 billings if they meet all program requirements. There are multiple reporting options, including claims, registries and electronic health record (EHR) systems.

This program also has a penalty component. Physicians who did not successfully e-prescribe in 2012 can still submit claims during the first 6 months of 2013 to avoid being assessed a 2% penalty in 2014.

There are exclusions to the program and certain hardship exemptions from the penalty, including an exemption for successful participants in the Medicare or Medicaid EHR programs. Specific information on the eRx program is available online.

Medicare and Medicaid EHR “Meaningful Use” Programs. Eligible professionals can receive up to $39,000 over the next four years if they begin participation in the Medicare EHR incentive program in 2013, or up to $63,750 over the next six years if they begin participation in the Medicaid EHR program. Successful participation includes the adoption of a certified EHR system and the demonstration of the ability to perform specific “meaningful” activities with the system, such as report a quality measure, collect patient demographic data and maintain an active medication list.

Additionally, a penalty phase has been introduced into the program this year. For this first penalty year, eligible professionals will have from Jan. 1, 2013 to Oct. 1, 2014 to successfully demonstrate meaningful use or face a penalty of 1% in 2015. Beginning in 2016, a penalty will be imposed on eligible professionals who do not successfully demonstrate meaningful use in the calendar year (CY) two years prior. Thus, successful meaningful use must be demonstrated in CY 2014 to avoid a penalty scheduled at 2% in 2016. Subsequently, this payment reduction will increase each year up to a maximum of 5%.

Specific information regarding this program is available online. In addition, helpful information on choosing an appropriate EHR system for your practice is available at American EHR Partners.

Physician Quality Reporting System (PQRS) Program. This program requires eligible professionals and groups to submit performance data to determine if they qualify for incentives or payment adjustments. There are multiple measures to choose from and multiple means of data submission. The criteria for successful reporting depend on the data submission method chosen.

Successful reporters of the quality measures for 2013 will receive a consolidated incentive payment of 0.5% in 2014 based on their 2013 billings. In addition, physicians reporting their quality data while participating in an approved Maintenance of Certification (MOC) program can earn an extra 0.5% for the year.

This year, the PQRS program also applies a 1.5% penalty on 2015 Medicare charges from eligible professionals who do not satisfactorily report required quality data, that is, if the PQRS requirement was not fulfilled in 2013 or (if reported through a registry) within the first six months of 2014. More detailed information regarding the 2013 PQRS program is available online. This site also provides information regarding the PQRIwizard, a tool offered by ACP that assists practices in submitting PQRS information in an accurate and minimally burdensome manner.

Value-Based Payment Program (VBP). CMS will introduce this year a program required by legislation that will adjust physician Medicare payments based on a value modifier defined by cost and quality data. The modifier will adjust payments upward, downward or by 0% as a function of reflected value. The program will be gradually introduced for all physicians, but for 2013, it will only affect groups of 100 or more eligible professionals. Additional information on the VBP is available online.

ICD-10. While required implementation of ICD-10 diagnostic codes has been delayed until Oct. 1, 2014, the College strongly recommends that all practices begin preparation for this change this year.

To start, physicians should contact their billing systems and EHR vendors to ensure they will be ready to make revisions to systems prior to the deadline. In addition, this change may require modifications to payer contracts, forms used and practice workflows.

Finally, physicians and other key personnel will need a working knowledge of the new diagnostic coding system. These changes will require time and should not be left until the last moment. Although delayed one time before, this implementation is not expected to be delayed again. Failure to implement by the deadline will result in rejected claims by most private and public payers.

Further information is available in the ICD-10 section of ACP’s coding website.

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