Quality reporting systems changing Medicare payment

March 15, 2011

Dramatic changes are coming to the way Medicare will pay physicians for their services, but savvy practices that voluntarily adopt the reporting procedures can financially benefit from incentives offered now.

With parts of the healthcare-reform legislation beginning to take shape, William L. Rich, MD, the American Academy of Ophthalmology's medical director of health policy, said it is becoming clear that initiatives such as value-based purchasing, quality metrics, and patient-centered outcomes are transforming the Medicare system.

"MDs will in the future be measured not only on their adoption of quality metrics, but on the outcomes achieved in populations at risk," Dr. Rich said. "That's actually a very good thing."

As complex and bureaucratic as programs like the Physicians Quality Reporting Initiative (PQRI) may be, Medicare offers incentives that can make them worthwhile. Dr. Rich said his nine-physician practice earned a "very healthy" check last year.

The voluntary program offered physicians 2% above their Medicare reimbursement in 2009 and 2010. It will pay 1% above their Medicare reimbursement in 2011 and 0.5% in 2012 through 2014. However, in 2015, physicians will be penalized 0.5%, with cuts escalating up to 2% each year beginning in 2018.

Physicians also can earn bonuses for maintenance of certification programs and electronic prescribing.

"The bonuses are very lucrative at this time; my group got a substantial check," Dr. Rich said at the AAO annual meeting in October. "And frankly, (electronic prescribing) has decreased administrative time in dealing with refills and stuff like that."

Practices that embrace electronic prescribing can earn a 1% bonus in 2011 and 2012 and 0.5% in 2013, he said. However, penalties of 0.5% begin in 2014 for those not using electronic prescribing systems, and they will escalate to 2% in 2016 and every year thereafter.

Consider waiting

But ophthalmologists should consider waiting to take advantage of the "strong incentives" Medicare offers now for practices to invest in electronic medical records (EMR). The Centers for Medicare and Medicaid Services will pay a total of $44,000 from 2011 to 2015 to practices that employ EMR, or $63,750 if more than 30% of a practice's patients are on Medicare, Dr. Rich explained.

However, EMR software must meet certain criteria to earn the incentives-and there are no ophthalmic systems that qualify yet.

"Be very careful when you talk to vendors," he said. Software programs still are being finalized and reportedly are causing up to 30% decreases in productivity, and it could be difficult to get service because so many practices are buying systems at the same time.

"I suggest you wait a couple of years, and forgo some bonus (payments) until these systems are up and running," Dr. Rich said.

While electronic records affect payment systems, they also enable data to be collected, measured, compared-and subpoenaed, opening up potential liability issues for practices. Software will feature clinical decision support, suggesting a course of action for patients with a given diagnosis. If a complication develops, lawyers could reasonably inquire whether physicians followed the course of treatment recommended by the software.