Pay for Performance

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After years of debate, pay for performance is making its way into the books, courtesy of CMS. The question remains: how will it affect your practice?

Medical practices are gearing up for an unprecedented change in the way Medicare will begin paying emergency physicians in the future. Following years of debate over the quality issue, the government is now taking steps to ensure that physicians deliver on their promise of quality by aligning some reimbursement increases to specific clinical measures. Beginning this month, the Centers for Medicare and Medicaid Services, which administers the Medicare program, is expected to implement the first phase in what will become a permanent program to pay EPs cash bonuses for meeting certain quality indicators.
Emergency medicine is just one of several specialties affected by the new regulation, called the Physician Quality Reporting Initiative (PQRI). Most office-based physicians as well as physician assistants, nurse practitioners, and other allied health professionals are also affected by the PQRI. But for EM, it will be the first time that physicians will be paid by the government on a closely watched performance basis.
“Emergency medicine has been shielded from pay-for-performance for some time. (But) we’ve anticipated its coming,” said Rodney Smith, MD, chief financial officer of EPMG, an Ann Arbor, MI group with 500 physicians. “Like it or not, it’s going to be what payers will be demanding from now on.”
Medical groups like EPMG have been hurriedly preparing for the PQRI, some even prior to the enactment of the federal Tax Relief and Health Care Act, which ushered in the program in 2006. For nearly a year, EPMG has been working together with its billing company to develop a new, customized documentation tool that will allow physicians to accurately capture the specific quality measures required by Medicare for the bonus.
Specifically, CMS has approved 74 distinct measures. When added to a patient claim for a given diagnosis, one or more of the indicators can satisfactorily meet the government’s minimum requirement for the bonus.
Initially, providers will only have to report the information on their claims. But some time after the first six months, they will have to show that at least 80 percent of their reported cases related to a particular quality measure met the criteria given in the measure.
For weeks, Smith said, each of EPMG’s multiple office sites has trained its physicians and billers on how to use the new formatted order sets. But the new templates are only part of a two-pronged approach.
The other part involves the role of billers who have been trained to identify the indicators from the physician’s order set and to assign a specific G-code to accompany the primary CPT code on the claim. The G-code is designed to show Medicare that the specific quality measure was used in conjunction with the treatment.
For the first six months beginning July 1, the program will be voluntary, said CMS, which is based in Baltimore, MD. Physician groups have the option of not participating. Those that do will be paid the bonus for merely reporting the indicators. Some time in 2008, however, Congress is expected to make the regulation mandatory, and docs will be required to meet the 80 percent performance threshold in order to qualify for the bonus.
“Right now, it’s just ‘pay for reporting’,” said Smith. “But it is our intention to do well enough so that when PQRI does become pay for performance, we’ll be good enough to meet the performance criteria as well.”
No one is certain yet how often the bonuses will be paid out or whether they will be in a periodic lump sum. But it’s commonly assumed that the extra earned payments will arrive with the normal fee schedule reimbursement. However, payment for the first six months of reporting will be sent to docs in a lump sum some time in mid-2008, CMS said.
Regardless, providers are viewing the PQRI as a welcome relief to future years of expected flat or declining fee schedule rate increases that have helped to erode bottom lines. Medicare’s tight payment policies have resulted in little or no growth in the physician fee schedule to EPs, who literally have no choice in determining which patients they see.
In recent years, emergency medicine has been able to hold the line on dramatic pay decreases but at the expense of other specialties, said Ronald A. Hellstern, MD, vice president of PSR, a practice management consulting firm in Dallas, TX. “They gave with one hand and took away with the other,” Hellstern said.
Now with PQRI, in the future, payment rate hikes will be linked to stricter forms of accountability. “Subsequent increases going forward will probably be tied to proving that you are meeting certain quality measures,” Hellstern said.
The program, however, isn’t without its glitches. Already, some physicians are beginning to question the value of a bonus payment that may not cover the cost of the initial investment in time and energy.
“It’s not a significant amount,”said Bruce Auerbach, MD, an EP who chairs the American College of Emergency Physicians’ Quality and Performance Committee. “It may be something in the order of $900 per full-time physician for the first six months.”The bonus could be even less, according to other observers. Although the driving force behind the additional payment will be the individual attending physician, it is the medical group that will receive the lump sum payment.
Calculated as an extra amount capped at 1.5 percent of total allowed charges stemming from the Medicare physician fee schedule, the actual bonus after distribution could be paltry, some physicians say.
The exact percentage will be determined by CMS using a formula that will take fairness into account. “Those providers who report a large number of claims using the quality measures will be paid at a higher percentage,” said Charlotte Yeh, MD, a CMS regional administrator in Boston.
 “When the dollars come back,” Hellstern said, “it’s quite possible that there could be a disconnect in how they are proportioned out. Fairness would dictate that people who did a better job get a bigger share.”
Another potential sore point involves a physician’s National Provider Identification (NPI) number. “Currently, there’s a huge backlog of docs without NPI numbers,” said Hellstern. “Without an NPI number, you can’t report a single quality indicator.” The problem is expected to acutely affect many smaller group practices.
And the very nature of emergency medicine poses yet another problem. Questions may arise about whether to apply the indicator to the early ED evaluation or to the final diagnosis and which one should be reported in order to qualify for the bonus. In a recent study, some 17 percent of community-acquired bacterial pneumonia cases weren’t diagnosed until later in the course of hospitalization. In many cases, the study added, the reverse is true. An early diagnosis of CBP ultimately becomes mild heart failure. Questions about the definitive diagnosis could alter the case for the quality indicator, which would ultimately affect the extra payment.
And finally, according to some docs, CMS will ultimately publicize the physician quality data. CMS has yet to acknowledge such plans, but observers believe the data will eventually be released to compare one provider with another. As yet, no one knows how to address these issues. As to how the bonuses will be doled out, Smith of EPMG said that will depend on management.
“Providers who maintain a high level of care will get the bonus. Those who don’t will get less,” he said. Then again, all physicians may be held to the same criteria regarding the use of the indicators and the bonuses may be distributed evenly.
As to how to use the quality measures to the best advantage, some physicians who’ve been closely studying the PQRI recommend that EPs use the “easy” ones first, especially in the first six months.
Three of the measures are the most commonly used in the ED, they said. They would be indicators 28, 54, and 55 (See chart). To these, physicians should add 29, 53, 65, and 66.
“They are clearly emergency medicine activities, especially the first three, and should be easily measurable,” said Hellstern.
In a few cases, the measures, which were developed last year by a consortium of specialty organizations, including the American College of Emergency Physicians and the American Medical Association, are themselves flawed. In at least one case, the indicator (measure 4) requires that the EP know the patient’s past medical history to justify its use. “EDs don’t always have that kind of past history, so that becomes problematic,” said Hellstern. However, the program allows for special circumstances through the use of “P”- category modifiers on the claim.
To be sure, some of the measures are “ridiculously simple,” said David Hexter, MD, an EP at Harbor Hospital Center in Baltimore. For example, measure 56 concerning vital signs: “We take vital signs on every patient who comes through the ED,” Hexter said, “Many of these indicators really aren’t hard targets to hit.”
To be sure, at this stage the measures aren’t perfect, Auerbach concluded. Most physicians, however, agree that the measures are a good starting point, as is the PQRI itself. In light of the dim prospects for better reimbursements, some docs maintain that incentive payments offer an opportunity at least for providers to work beyond the narrow fee schedule.
Most emergency physicians already provide high quality care, they say. The bonus plan should reward them for what they are already doing. 
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PQRI’s Best Seven Indicators for EPs  

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PQRI’s Best Seven Indicators for EPs*
The Centers for Medicare and Medicaid Services has approved 74 clinical measures it says satisfy the government’s definition of medical quality. In emergency medicine, the following seven are reportedly the most compatible and easiest to apply.


#28  Aspirin at Arrival for Acute Myocardial Infarction (AMI)
Description: Percentage of patients with an ED discharge diagnosis of AMI who had documentation of receiving aspirin with 24 hours before ED arrival or during ED stay.

#29  Beta-Blocker at Time of Arrival for Acute Myocardial Infarction (AMI)
Description: Percentage of patients with a diagnosis of AMI who had documentation of receiving beta-blocker within 24 hours before or after hospital arrival.

#53  Asthma: Pharmacologic Therapy
Description: Percentage of patients aged 5 to 40 years with a diagnosis of mild, moderate, or severe persistent asthma who were prescribed either the preferred long-term control medication (inhaled corticosteroid) or an acceptable alternative treatment.


#54  Electrocardiogram Performed for Non-Traumatic Chest Pain
Description: Percentage of patients aged 40 years and older with an ED discharge diagnosis of non-traumatic chest pain who had an electrocardiogram (ECG) performed.

#55  Electrocardiogram Performed for Syncope
Description: Percentage of patients aged 60 and older with an ED discharge diagnosis of syncope who had an ECG performed.

#65  Appropriate Treatment for Children with Upper Respiratory Infection (URI)
Description: Percentage of children aged 3 months – 18 years with a diagnosis of upper respiratory infection (URI) who were not dispensed an antibiotic prescription on or 3 days after the episode date.

#66  Appropriate Testing for Children with Pharyngitis
Description: Percentage of children aged 2 – 18 with a diagnosis of pharyngitis, who were prescribed an antibiotic and who received a group A streptococcus (strep) test for the episode.


*Source: Centers for Medicare and Medicaid Services


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