Additional data confirms LTC physicians will suffer CMS punishment under VBP

November 11th, 2013 by Rod Baird

Value-Based Purchasing is one of the many legislated reforms contained in the PPACA (Section 3007).  The law directs the DHHS Secretary to develop a budget neutral program that “shall establish a payment modifier that provides for differential payment to a physician or a group of physicians … based upon the quality of care furnished compared to cost.”

Larger physician groups are getting a preview of CMS’s assessment of their quality vs. cost performance this fall. Those previews are contained in a confidential Quality and Resource Use Report (QRUR) that is available through the IACS/PECOS website. An earlier blog post (Oct. 1, 2013) reported observations from a single LTC physician group’s QRUR report. These reports place each large medical group in a quality/cost matrix. The relative position in that matrix will determine which groups receive performance penalties, and which are paid bonuses for above average quality or below average costs.


Since that October post, I’ve received QRUR reports from three other LTC medical groups. Each of the groups was independent, performed more than 100,000 encounters in 2012, and works exclusively in various LTPAC settings.

Based on review of those additional QRUR reports, it is possible to confirm that 100 percent of the groups were classified as “High Cost.” On average, the four groups were at the 96th percentile in the cost hierarchy, after risk adjustment. Their risk-adjusted costs were tightly clustered (three at 96 percent, one at 97 percent). Their average costs were approximately $41,000 per beneficiary, and risk-adjusted costs were approximately $20,000 per person. The national benchmark cost is at $10,337.

The Quality performance score of the groups ranged from -1.59 to +0.30. Three of the groups were below average, with their tiering determined by use of Administrative Claims reporting option for GPRO.  The fourth group, with a positive score, is part of a Pioneer ACO. Under the 2012 ACO GPRO reporting rules, the ACO could select the patient sample to use in reporting its member physicians’ quality performance. That option only existed during the first years of the Pioneer ACO program. I expect 2013 scores to drop; all ACO quality measures are based on an ambulatory care population.

A copy of an aggregate report showing some key metrics for the four groups is posted here.

As LTC physicians and practice managers, what do we do next?

AMDA’s Executive team has reviewed this data and is already working on a strategy to present it to CMS. It will be essentially impossible for LTC focused medical groups to avoid the “High Cost” assignment without CMS changes to its benchmark data. I’m not optimistic about this happening in a short time period.

The remaining tool for damage mitigation for LTPAC physicians is to employ an intentional strategy to become “High Quality.” There doesn’t appear to be any opportunity to demonstrate “quality” via the use of administrative claims – the elements subject to measurement are beyond the providers’ control.

The remaining strategic avenue requires the use of PQRS measures that are reported specifically for the VBP program. This must be done by use of a Clinical Registry. The measures selected by the individual providers/practice need to show a high level of achievement. Each provider/group has to devise its own strategies based on how they practice and document encounters. We plan on embedding our PQRS VBP measures in our EHR. Once CMS publishes the 2014 PQRS measure definitions, I’ll post a blog entry analyzing which ones seem most appropriate for LTPAC physician use.

Rod Baird

About Rod Baird

Rod Baird is the Founder and President of Geriatric Practice Management (GPM). Since 1977, he’s led provider and management organizations that deliver care to Medicare/Medicaid beneficiaries. Past programs he’s overseen include home health, personal care, hospice, rehabilitation hospitals, adult and psych daycare, alcohol/drug rehabilitation, industrial medicine and primary care practices. The Centers for Medicare and Medicaid Services (CMS) selected Baird as one of only 73 individuals to serve with its InnovationProgram. His educational background includes a Master’s Degree in Physical Chemistry from the American University, Washington, D.C.

We're ready to help you. Contact us today by phone at (828) 348-2888, or get in touch via our contact form.