Medical Practice Management
May 05

Medicare PQRS Penalty Will Impact 470,000 Clinicians in 2015

The Medicare program will shave its reimbursement this year by 1.5% for roughly 470,000 clinicians, including 240,000 physicians, because they flunked its Physician Quality Reporting System (PQRS) program in 2013, the Centers for Medicare and Medicaid Services (CMS) announced last week.

The 1.5% pay cut comes on top of a 2% sequestration cut for all Medicare providers on account of the Budget Control Act of 2011.

Launched in 2007, PQRS initially relied just on bonuses to encourage clinicians to report their performance on quality measures. The penalty phase of the program kicked in this year. The penalty for noncompliance increases to 2% in 2016.

Ninety-eight percent of the clinicians hit by the 1.5% decrease in 2015 did not even try to participate in PQRS in 2013. However, many of the clinicians who blew off this program had very little to lose. Roughly four in 10 of those subject to the penalty treat 25 or fewer Medicare beneficiaries per year.

Of the roughly 642,000 clinicians who participated in PQRS in 2013, 495,000 within 48,000 practices qualified for $215 million in bonus payments, according to CMS. This amounted to about $443 per clinician and $4531 per practice before factoring in the 2% sequestration cut.

The number of clinicians who earned a bonus in 2013 rose 35% over 2012, tracking a 47% increase in participation.

In PQRS, clinicians select a set number of quality measures to report from a menu of hundreds. How many they must select depends on how they report their performance to CMS — at least three through Medicare claims, for example — and whether they are reporting as individuals or members of a group practice. The top five PQRS measures for 2013 in terms of how many clinicians submitted them were:

  • Participation in a clinical database registry
  • Pain assessment and follow-up
  • Documentation of current medications in the medical record
  • Body mass index screening and follow-up
  • Screening for high blood pressure and follow-up documented

PQRS will merge with Medicare’s incentive programs for electronic health record systems and the Value-Based Payment Modifier under the law recently enacted by Congress that repeals Medicare’s sustainable growth rate formula for setting physician compensation.

CMS also announced last week that it paid out another $168 million in incentive payments to clinicians who successfully participated in Medicare’s e-prescribing incentive program in 2013, its last year.

More information on the PQRS and e-prescribing incentive programs in 2013 as well as how to avoid future PQRS penalties is available on the CMS website.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →