In 2014, the Physician Quality Reporting System is more challenging than ever. Now is the time to take action so you avoid penalties and collect incentive payments.

By Teri Yates

Teri Yates, ARA

Teri Yates, ARA

On November 27, 2013, the Centers for Medicare and Medicaid Services (CMS) finalized a number of changes to the Physician Quality Reporting System (PQRS). PQRS is one of several pay-for-performance models devised and implemented in recent years to facilitate the collection of quality information about the care provided to Medicare beneficiaries by physicians and other eligible professionals (EPs).

The earliest version of PQRS, known at the time as the Physician Quality Reporting Initiative, was first implemented in 2007 as a voluntary program that offered incentive payments in exchange for reporting.  Participation in the program was low at first despite the significant bonus payments offered, with physicians citing several reasons, including confusing program guidance from CMS, low confidence that the program actually improved quality, and limited success at actually achieving the bonus payments when reporting was attempted. Many of the physicians who did earn incentive payments early in the program concluded the costs outweighed the benefits of participating; those frustrating experiences did little to encourage expansion among other EPs. Despite its inauspicious start, continuation of the PQRS program was assured in 2010 by the Patient Protection and Affordable Care Act, and over time the program has been modified to incorporate both incentives and payment penalties to promote reporting.

Given its permanent nature and escalating economic impact, in 2012 the American College of Radiology (ACR) conducted research on the implications of PQRS for radiologists. Their review of the program data revealed that while overall participation was quite low, it was significantly higher among radiologists than for physicians of other specialties. In 2010, just 16.3% of eligible nonradiologists qualified for incentive payments as compared to the 23.7% qualification rate for eligible radiologists. Researchers also found that participation had steadily increased each year since inception of the program. That trend, coupled with the addition of payment penalties as a motivator, caused the ACR to conclude that radiologist participation would most likely continue to improve over time. They also warned their membership that failure to increase participation would have a tangible economic impact, resulting in more than $100 million in payment reductions for radiology by 2016.

The Current State of Compliance

Data presented at the 2013 RSNA meeting suggest that its membership took heed of the ACR’s warning; 2011 PQRS program participation among radiologists was reported at 45.4%, which is nearly twice the rate for the prior year. It is unclear how much progress has been made by radiologists since 2011, but there is evidence that the disparity between the participation levels of radiologists and other specialties is still quite significant.  In the CY 2014 Medicare Physician Fee Schedule (MPFS) comments, CMS states that “participation in the PQRS has fluctuated around 25 percent among those eligible to participate.”

Incentive and Penalties Table - Fig 1Ezequiel Silva, MD, Vice-Chair of the ACR Commission on Economics, believes that radiologists have likely made even further headway in the last 2 years. “Early in the PQRS program, there were very few measures applicable to radiology, and that limited availability impacted participation. Over time, more measures have been added and many of the larger billing companies have offered advice to their clients on how to successfully participate. While I don’t have the data yet to confirm this, my instincts tell me that the rate of participation has increased for these reasons.”

Leaders in the radiology revenue cycle management industry agree. Renée Engle is the Senior Vice President of Client Services for Management Services Network and serves as the firm’s expert on PQRS.  When asked about participation levels, she responded, “We have nearly 100% participation with our clients because we basically do it for them [submitting via claims]. Occasionally, when we bring on a new client, they are not reporting but that happens less than 10% of the time.”

Wendy Lomers also has noted that participation among her clients has improved dramatically since 2010. Lomers is the Chief Financial Officer for Acclaim Radiology Management and also serves as the current President of the Radiology Business Management Association (RBMA). “2011 was a major leap forward in terms of participation, and by 2012 nearly all of our clients at Acclaim were participating.”  Lomers acknowledges that there is still a constituency of nonparticipants lingering, however, which she has identified through her work with the RBMA. “We still get contacted regularly by members looking for resources on how to get started.”

Industry veteran Melody Mulaik believes there are still many PQRS holdouts within the radiology community. As the President of Coding Strategies Inc, Mulaik offers educational support on PQRS to her clients, and also has studied the program in-depth in her role as Chair of the Regulatory Affairs Committee for AHRA: The Association for Medical Imaging Management. “In my opinion, many providers haven’t implemented PQRS in their practice because they just don’t really understand the intricacies.”

Substantial Changes in 2014

At the same time that impending penalties have increased the pressure to participate, CMS also has upped the ante for what successful reporting must entail in 2014. Prior to this year, it was necessary for EPs to report on three quality measures via claims or a qualified PQRS registry to receive the incentive.  EPs must still report three measures in 2014 to avoid the 2016 payment reduction, but to earn an incentive under the CY 2014 MPFS, the rules now require reporting of nine measures falling within at least three different national quality strategy domains.

In its response to the public comments, CMS alludes to the future impact of the Value-Based Payment Modifier (VBPM) as the rationale for the increase. “We believe it is important to collect data that provides a broad picture of the quality of care provided by an eligible professional.” For this reason, they go on to specify that Value-Based Payment Modifier will rely on PQRS participation to determine upward, downward, and neutral adjustments based on physician performance.

There are some potential exceptions, the first of which is to simply forgo the 2014 incentive payment and continue reporting just three measures.  While successful reporting of the three will not entitle the EP to any incentive, it will satisfy the requirement to avoid the 2016 payment reduction. Some may consider this to be the most reasonable course of action given that the 2014 incentive is relatively low at only .5%, but the comments from CMS reveal that it will be a short-lived strategy. “It is our intent to ramp up the criteria for satisfactory reporting for the 2017 PQRS payment adjustment to be on par [with] or more stringent than the criteria for satisfactory reporting for the 2014 PQRS incentive.”

In addition, CMS offers an option to report a measures group instead of nine individual measures.  Satisfactory measures group reporting requires that all measures contained within the group be reported through a qualified PQRS registry. Silva points out that the devil is in the details on this option, and opines that reporting the appropriate measure group for radiology may be impossible for many practices, including his own private practice. “Some of the specific measures within the group would be very difficult to achieve for most radiologists at this time. For example, measure 363 requires the radiologist to search for prior CT studies through a shared archive that includes cases from nonaffiliated institutions. There are very few markets where this is currently available.”

Another exception to the nine measure requirement exists when there are simply not enough applicable measures to report based on the nature of the radiologist’s practice. When this happens, EPs are instructed to submit all applicable measures. CMS will then perform the Measure-Applicability Validation process (MAV), in which the EP’s claims history is evaluated to verify no applicable measures were omitted. Relying on MAV to reduce the reporting requirement may be a risky proposition because CMS is required by statute to withhold incentive payments in circumstances where EPs reporting less than nine measures fail the validation process. “You could work hard to report on several truly applicable measures and still fail to meet the required threshold because you didn’t report the antibiotics measure on an occasional interventional radiology procedure,” said Silva.

Will Successful Participation Decline?

While there is consensus that three measures have been an attainable goal for radiologists, there is a high level of skepticism that nine measures can be identified for most EPs.  “Historically, none of our clients have undergone MAV,” Engle said. “That is going to change in 2014, because no client of ours has nine applicable measures. We can typically identify six measures at best for a diagnostic radiologist, and fewer for those that subspecialize.”

Lomers reports similar concerns, admitting that Acclaim is also having a hard time coming up with nine measures. “We have had very few clients go through MAV in the past, and it worries me that many will now go through the process under the new requirements. There are so many codes, some of which are broadly applicable. A code that is very rarely used, or that we did not anticipate would be applicable to radiology could trip up the EP.” She believes the fallout could be radiologists not even attempting to earn the incentive. “I wouldn’t be surprised to see many radiologists simply reporting the minimum required to avoid the penalty.”

If there is a silver lining to be found within the new requirements, it is that CMS has offered some relief to EPs on the percentage of applicable cases that must be reported. For 2014, the threshold for registry reporting has been reduced from 80% down to 50%.  It is unclear whether this reduced percentage will become a permanent feature of the program, or is simply a transitional step to assist providers as they adjust to the other more stringent requirements.

A Potential New Option         

CMS also has implemented a major structural change to the program this year by creating an avenue for participation through a qualified clinical data registry (QCDR). Section 601(b) of the American Taxpayer Relief Act of 2012 (ATRA) authorized individual EPs to fulfill PQRS requirements beginning in 2014 by demonstrating satisfactory participation in a CMS-approved entity that “collects medical and/or clinical data for the purpose of patient and disease tracking to foster improvement in the quality of care furnished to patients.” To gain CMS approval as a QCDR, the entity must self-nominate and verify that it performs four basic functions. These include reporting the data gathered to CMS, gathering data for all patients (not just Medicare patients), providing feedback to providers for performance improvement purposes, and benchmarking.

PQRS Options for Radiologists - Figure 3The ACR submitted an application in late January to self-nominate as a QCDR. Judy Burleson, Senior Advisor on Quality Metrics, confirmed that immediately after submission, the ACR received acknowledgement that CMS was in receipt of the application and planning to commence the vetting process; a decision is expected in May 2014.  “This avenue is really exciting to us because the existing measures are so pinpointed and many radiologists had no measures to report,” said Burleson. If approved, the ACR will leverage its existing data registries to provide the service. “The point of the QCDRs is to make use of infrastructure that is already in place,” she said. “For 2014, we are permitted to submit 20 non-PQRS measures and we chose those from several of our existing registries, including the Dose Index Registry, CT Colonography Registry, National Mammography Database, and General Radiology Improvement Database.”

Although Burleson believes this represents a good start, she also notes that more measures are needed to improve the reporting ability of subspecialized radiologists. “It was difficult to select only 20 measures that would adequately address diverse practice areas.” The ACR echoed this in their comment letter to CMS on the Final Rule. “We understand CMS limiting non-PQRS measures to 20 that a QCDR can report to CMS in the initial year, 2014, but we urge CMS to consider increasing that limit in 2015. While 20 measures would seem to enable full PQRS participation for many physicians, having available, relevant measures given physician subspecialization, is still an issue at that number.”

If CMS approves the ACR’s QCDR, and a radiologist was previously submitting data to one (or more) of these registries, then satisfying the PQRS participation requirement for 2014 will theoretically be a seamless process. With an approval decision not expected until May, the viability of this option in 2014 for EPs not currently reporting to an ACR registry is less certain. “Sites can submit their data retrospectively to qualify,” said Burleson, but she conceded that may be more realistic for some measures and more challenging for others. Another factor to consider is the expense of participation; Burleson indicates that the costs for new participants will be comparable to other PQRS registries but adds that the ACR has not yet finalized the fee schedule.

What the Future Holds

PQRS Organizational Steps - Figure 4Moving forward, Mulaik anticipates a transition to more registry-based reporting, which has historically been linked to greater PQRS success. Acclaim also has seen that trend with the firm’s clients even though there are no extra fees involved in claims-based reporting. “We have only had one client choose claims,” Lomers shared, and points out that registry reporting provides an additional layer of assessment to identify and improve deficiencies in the documentation. And while many choose registry reporting to improve the likelihood of a good financial result, the ACR is hopeful that registry participation will grow for another reason: quality improvement. Burleson explains the rationale, which ties back to the original purpose of the organization’s registries. “If more groups participate in registries, then the information will be more robust and meaningful.”

Silva is quick to point out that PQRS participation is crucial for reasons beyond the direct incentives and penalties, with the program driving an even bigger economic issue on the horizon for radiologists.  “Starting in CY 2015, CMS will use PQRS data as an element in determining the Value-Based Payment Modifier for groups of 100 or more EPs. In CY 2016, it will extend to groups with 10 or more.”  Under current law, all EPs will be subject to VBPM in 2017 but proposed legislation to repeal the sustainable growth rate (SGR) formula may modify the landscape.

The SGR Repeal and Medicare Provider Payment Modernization Act of 2014, if passed, will consolidate three current quality programs (PQRS, VBPM, and EHR Meaningful Use) into one new payment program called the Merit-Based Incentive Payment System. While passage of this legislation may modify the structure of how payments are adjusted on the basis of quality, the fundamental requirements of PQRS will not be going away. For this reason, Lomers is urging all radiologists not currently participating to get involved now. “The sooner you start, the better, because you will need help. Inaction is just not an option under any foreseeable payment scenario.”


Teri Yates is Principal Consultant of Accountable Radiology Advisors (ARA), a consulting practice dedicated to helping radiologists and hospitals deliver services of higher value. ARA assists clients with quality program development, virtual quality directorship, and risk management, and also provides value-based contracting, strategic planning, and interim leadership services.