Spring 2010 issue of Horizons

Raise Your Expectations CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

To complicate matters further, both reform bills require that the current PQRI be integrated with Electronic Health Record (EHR) reporting by January 1, 2012. The integrated program would require physicians to demonstrate the meaningful use of electronic health records and data related to clinical quality of care furnished to an individual. This requirement is significant because the current EHR regulations contain non-compliance penalties of up to a 5 percent reduction in the Medicare payments a physician could receive. While the House and Senate health care reform bills are different on several matters, there are few differences when it comes to addressing quality measures and moving to a “pay-for- performance” system. Even though the scope of any final health care reform bill as it relates to any “pay-for-performance” system would only impact those physician practices that receive Medicare reimbursement for health care services, it is not beyond the realm of possibility that managed care plans would adopt a similar payment system or, at the very least, use the data to negotiate rates. In terms of planning, physician practices should begin to understand the current PQRI so they can more easily adapt to any future changes in the reimbursement methodology.

program permanent. While the incentive payments for 2009 and 2010 were increased to 2 percent, MIPPA only authorized incentive payments through 2010. Under both the House and Senate health care reform bills, there are provisions to modify the PQRI currently in place. Since the inception of the PQRI, participation has been on a voluntary basis and incentives were provided to encourage physician participation. In the House bill, there are no substantial changes to the incentive program. The bill extends the 2 percent incentive through 2012. However, in the Senate health care reform bill, the financial incentive to participate in PQRI for 2011 is reduced to 1 percent, and for years 2012 through 2014 there is only a 0.5 percent incentive. Beginning in 2015 (and any subsequent years), while the bill does not mandate participation, payments for services will be reduced for those physicians who “elect” not to submit quality data. The physician payments will be reduced by 1.5 percent for 2015 and by 2 percent in subsequent years. In addition to modifying the PQRI program, the Senate bill directs CMS to develop a payment modifier that provides a differential payment to a physician based upon the quality of care compared to cost. The quality of care will be evaluated based on a composite of indicators that measure quality outcomes. The cost will be based on a composite of cost measures adjusted for geographic payment rates and risk factors (such as socioeconomic and demographic characteristics). By January 1, 2012, CMS would be required to publish the quality of care and cost data. As determined by CMS, effective January 1, 2015, the payment modifier would apply to specific physicians or physician groups. Presumably, the early application of the payment modifier would be targeted toward those physicians (or groups) that have quality and cost indicators outside the CMS parameters. For other physicians (and groups), the payment modifier would not be effective until January 2017.

Questions? Contact:

Ken L. Rubin, CPA Partner-in-Charge Professional Services Group 314.290.3417 ken.rubin@rubinbrown.com Steve Moro, CPA Manager Professional Services Group 314.290.3244 steve.moro@rubinbrown.com

50 u spring 2010 issue