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Value Based Payment Modifier Program (VBM)

The Value-Based Payment Modifier (VBM) Program provides for differential payment to a physician or group of physicians based upon the quality of care provided compared to the cost of care during a performance period. This is how CMS is turning Pay-for-Reporting into Pay-for-Performance with programs like PQRS. The VBM Program compares a practice’s cost of care and the quality of care to their peers. A composite score is created for both cost and quality.

The cost of care composite score is derived from all Medicare Part A and B claims submitted by all providers who treated attributed Medicare beneficiaries under the TIN. Medicare Part D is not included in the cost of care calculation. The goal is to have lower costs than your peers resulting in a cost composite score lower than average.

The quality of care composite score is derived from PQRS measure performance on quality indicators across up to 6 equally weighted quality domains. The 6 domains are the National Quality Strategy (NQS) domains: Patient Safety; Person and Caregiver-Centered Experience and Outcomes; Communication and Care Coordination; Effective Clinical Care; Community/Population Health; Efficiency and Cost Reduction. The goal is to have high measure performance rates resulting in a quality composite score greater than average.

CMS then takes your Cost Composite Score and Quality Composite Score and, after comparing them to all other TINs, gives each TIN a Standardized Cost Composite Score and a Standardized Quality Composite Score. These Standardized Scores are presented as the distance, in standard deviations, from the national average. Based on these standardized scores, performance is revealed and the TIN is quality-tiered.

Groups sized 2-9 Eligible Professionals, Solo Practitioners, and Non-Physician Practitioners can either be neutrally adjusted or upward adjusted based on their Standardized Composite Scores. Groups of this size cannot be downward adjusted.

 

Cost/Quality Low Quality Average Quality High Quality
Low Cost +0.0% +1.0x% +2.0x%
Average Cost +0.0% +0.0% +1.0x%
High Cost +0.0% +0.0% +0.0%
Reference: 2015 Updates to the Physician Quality Reporting System (PQRS) & the Value-based Payment Modifier. Philadelphia Regional Office of CMS. 7 April, 2015. Centers for Medicare & Medicaid Services.

 

Groups of 10 or more Eligible Professionals can be upward adjusted, neutrally adjusted, or downward adjusted based on their Standardized Composite Scores.

Cost/Quality Low Quality Average Quality High Quality
Low Cost +0.0% +2.0x% +4.0x%
Average Cost -2.0% +0.0% +2.0x%
High Cost -4.0% -2.0% +0.0%
Reference: 2015 Updates to the Physician Quality Reporting System (PQRS) & the Value-based Payment Modifier. Philadelphia Regional Office of CMS. 7 April, 2015. Centers for Medicare & Medicaid Services.

The VBM program is budget neutral, so an upward payment adjustment may not result in the full 2.0% or 4.0%.