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PQRS Update – Payment Adjustments and Reporting Requirements

on Friday, 9 January 2015 in Health Law Alert: Erin E. Busch, Editor

Many practitioners including physicians, physician assistants and nurse practitioners (“Eligible Professionals”) recently received a notice from the Centers for Medicare and Medicaid Services (“CMS”) stating that, in 2015, a negative reduction (-1.5%) in Medicare Physician Fee Schedule (“MPFS”) amounts would be imposed for failure to report under the Physician Quality Reporting System (“PQRS”). This notice has led to much confusion about PQRS requirements, the application to critical access hospitals and rural health clinics, and future reporting options. In the past month, CMS and QualityNet, the CMS contractor for PQRS assistance, have provided additional guidance on various aspects of PQRS.

Overview of PQRS

PQRS is a program that uses incentive payments and, beginning in 2015, payment adjustments, to encourage Eligible Professionals to report on quality measures. Eligible Professionals can then quantify how they are meeting quality metrics and compare their performance on a given measure to other Eligible Professionals. In 2014, Eligible Professionals who report through PQRS may qualify for an incentive payment of 0.5% of their total estimated Part B allowed charges furnished during the reporting period. CMS will also apply payment adjustments to Part B amounts based on whether an Eligible Professional reported through PQRS in a previous year. For example, the 2015 payment adjustment (-1.5%) corresponds to an Eligible Professional’s failure to report in 2013; and the 2016 payment adjustment (-2.0%) corresponds to an Eligible Professional’s failure to report in 2014.

Application to CAHs and RHCs

Prior to 2014, Eligible Professionals who reassigned benefits to a critical access hospital (“CAH”) that billed professional services using CAH Method II were not able to participate in PQRS. Still, some Eligible Professionals received a letter indicating the 2015 payment adjustment would be imposed. QualityNet has indicated that some letters may have been erroneously sent to Eligible Professionals who only practiced at a CAH in 2013. CMS does not intend to notify the recipients of the error. However, some Eligible Professionals may have practiced at multiple locations or provided Part B or Railroad Medicare services that were billed under the MPFS in 2013. If there was even one MPFS claim associated with a provider’s National Provider Identifier (“NPI”) in 2013, the provider may have been eligible to report through PQRS in 2013. Providers should contact QualityNet to request 2013 claims details and confirm if a provider had MPFS claims associated with the provider’s NPI.

Importantly, if an Eligible Professional believes that the payment adjustment letter was received in error, there is an informal review process that should be followed. This web-based process is detailed in the payment adjustment letter and is open from January 1, 2015 through February 28, 2015.

In 2015, if an Eligible Professional is subject to a payment adjustment, QualityNet has indicated that the payment adjustment will only apply to those services billed under the MPFS. Services payable under fee schedules other than the Medicare Physician Fee Schedule (such as rural health clinics and CAH Method II), will not be subject to the payment adjustment.

2014 and Future Reporting Options

Eligible Professionals must report on 2014 PQRS data in order to avoid a 2016 payment adjustment. This now includes Eligible Professionals who reassign to a CAH that bills using Method II. There are various reporting options including claims reporting, registry reporting, and electronic health record (“EHR”) reporting. 2014 PQRS reports must be submitted in early 2015 depending on the reporting method selected. Providers should be examining the reporting options and working internally and with vendors (for example, a reporting registry or EHR vendor) to gather and submit PQRS data.

Michael W. Chase

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