Physician Quality Reporting System in 2013: The penalties are coming!

By Steve Besch, Senior Systems Analyst

As far as fines for non-participation in the Physician Quality Reporting System (PQRS) are concerned, I’m starting to feel a bit like Paul Revere – shouting from horseback (or from the hilltops, or, in this case, from the blogosphere) to get the word out to as many people as possible that 2013 is the make-or-break year for their PQRS participation.

For years, CMS has been making vague references to penalties “arriving in 2015”, giving many a false sense of security that PQRS participation wouldn’t affect their bottom line until several years in the future.  However, the 2012 Final Rule revealed for the first time that PQRS fines imposed in 2015 would actually be based on participation (or the lack thereof) during the 2013 reporting period.  This revelation should have put PQRS on the front burner (with the flame on “high”) for any practice that didn’t already have a concrete participation plan in the works, but I still see evidence that many are unaware of their impending misfortune.  Let’s break the details down into the familiar “good news – bad news” scenario..

The bad news is that unsuccessful PQRS reporting in 2013 will result in a 1.5% reduction in Medicare Part B FFS payments during 2015.  Likewise, unsuccessful reporting in 2014 will result in a negative payment adjustment in 2016 (and so on – there will always be a 2 year lag between the crime and the punishment).  The only difference is the penalty rate rises from 1.5% in 2015 to 2% for 2016 and beyond.

The good news (yes, there is a faint silver lining on this imposing cloud) is two-fold.  First, there is still a .5% reimbursement available for successful participation in 2013 and 2014 – so there’s still a chance to recoup some of the expense of implementing a participation strategy if that interests you, but the reimbursement disappears entirely after 2014 (ok, so that last part might actually belong in the “bad news” column).  Second, and more importantly, the reporting requirements to avoid the penalty are not as stringent as the requirements to earn the incentive.  To earn the incentive, a provider needs to meet a minimum 80% reporting rate threshold on at least 3 quality measures.  To avoid the penalty, however, a provider only needs to successfully report one event on one measure during the year (yes, a single reporting event on a single measure defuses the bomb for that year).  This requirement will almost certainly grow more demanding in years to come, but at least the initial implementation is a simple affair.  The problem, of course, is knowing whether or not your reporting (one event or many) has reached CMS and actually snuffed the fuse.  But that’s a topic for future discussion (my horse awaits) – stay tuned…


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