Revenue Cycle Management Blog | GroupOne Health Source

What You Need to Know to Avoid a 2% PQRS Penalty

Written by Ricki Ransom | November 4, 2015


Healthcare revenue cycle management will undergo changes in coming years as fee-for-service payment models give way to more value-based payment models. The 
Physician Quality Reporting System (PQRS) began in 2007 as an incentive-based reporting program for eligible healthcare providers to report quality data to the Centers for Medicare and Medicaid Services (CMS) through Medicare claims forms. 

Starting in 2015, PQRS applies a negative payment adjustment to eligible professionals (EPs) who don't report quality data for covered services. In 2015, EPs who did not report quality data for their 2013 services are subject to a 1.5% reduction in physicians' payments. In fact, providers who failed to report PQRS in 2013 are now being hit with a 1.5% Medicare fee schedule reduction and recent stats published by CMS indicate that nearly 40% of eligible providers are being penalized for not reporting PQRS in 2013. In 2016, the payment reduction will be 2%, based on reporting for 2014 services. 

Who Is Eligible to Report PQRS Quality Measures?

What is an eligible professional (EP) under PQRS? Medicare providers considered EPs include:

• Doctors of medicine
• Doctors of osteopathy
• Doctors of podiatric medicine
• Doctors of optometry
• Doctors of oral surgery
• Doctors of dental medicine
• Doctors of chiropractic

Other eligible practitioners include

• Physician assistants
• Nurse practitioners
• Clinical nurse specialists
• Certified registered nurse anesthetists
• Anesthesiology assistants
• Certified nurse midwives
• Clinical social workers
• Clinical psychologists
• Registered dietitians
• Nutrition professionals
• Audiologists

Eligible therapists include physical therapists, occupational therapists, and qualified speech-language therapists. Covered professional services under PQRS are services paid under the Medicare Physician Fee Schedule (PFS).

How Do Providers Report Using PQRS?

In 2015, eligible providers must report on at least nine measures, or as many as are applicable if nine are not possible. Measures must be in three National Quality Strategy Domains, and practices must report each measure for at least half of the Medicare Part B fee-for-service patients seen during the reporting period. Selection of measures for reporting depends on factors like the clinical conditions a practice usually treats, the types of care provided, care delivery settings, and quality improvement goals.

If a physician sees at least one Medicare patient in a face-to-face encounter during the reporting period, he or she has to also report on at least one "cross-cutting" measure, which is a non-speciality measure. An example of a cross-cutting measure would be "Percentage of patients 18-75 years of age with diabetes who had hemoglobin A1c > 9.0% during the measurement period." The cross-cutting measure counts as one of the nine required measures.

PQRS data may be submitted using several different methods, but currently, practices must choose one method depending on the size of the practice. Submission methods currently include:

• Reporting special quality codes to CMS on Part B claims
• Submitting data through a qualified Physician Quality Reporting registry
• Submitting data from a qualifying electronic health record (EHR)
• Using a Group Practice Reporting Option (GPRO) web portal
• Using a qualified clinical data registry
• Using a CMS-certified survey vendor

Smaller practices typically participate by submitting quality codes on individual Part B claims.

How Does PQRS Reporting Benefit Eligible Healthcare Providers?

For the first few years of PQRS, practices were eligible for incentive payments for PQRS reporting. Starting in 2015, however, EPs that do not report on specific quality measures will receive downward adjustments to Medicare payments. Providers using PQRS can use the program to assess care quality, quantify how often they meet certain quality metrics, and compare their performance on certain measures with their peers. 

The ultimate goal is for CMS to move toward physician reimbursement based on value rather than patient volume. Practices that successfully improve care quality based on care value rather than patient volume should eventually see tighter revenue cycle management and more streamlined management through use of advanced EHR technology.