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Hospitalitsts Should Embrace Value-Based Purchasing

Get used to being measured, and learn new skills and competencies, says HM12 speaker.

by Caitlin Foxley, MD, FHM

Patrick Torcson explained the history behind the ABCs of CMS during a Monday-morning session at HM12.

Medicare Part A currently spends $200 billion annually, and Part B spends $120 billion annually. These costs are unsustainable, said Dr. Torcson, and a 2003 Rand study found the quality of care provided by Medicare to be "untrustworthy." Fee for service is volume-based, not quality-based, said Dr. Torcson. Out of this was born the idea of pay for performance (P4P). The structure of P4P is such that performance is measured, reported, and rewarded. Whether or not P4P actually works is controversial, said Dr. Torcson. Studies are limited, results are conflicting, and nothing suggests better outcomes for patients.

The 3 Stages of P4P

  1. Physician Quality Reporting System (PQRS): voluntary reporting system whereby physicians report to CMS on a variety of metrics. There are 10 metrics that hospitalists can report on, such as ACE/ARB for HF, and BB for AMI. PQRS provides a potential percentage increase in medicare payments through 2014. In 2015, failure to participate will result in reductions in payments from Medicare.
  2. Physician Feedback Program: A three-phase program that began in 2007, it provides confidential reports to physicians called quality resource use reports (QRUR). These reports will be used to generate physicians' scores for the next:
  3. Value-Based Payment Modifier: Each physician will receive a two-digit score assigned to his or her NPI. This will cause reimbursement of E&M scores to be weighted according to quality. Whereas currently a 99233 is reimbursed at $186.19, the range will be from $166.19 to $206.19, depending on a physician's VBP modifier. This will take effect in 2013 in Iowa, Nebraska, Kansas, and Missouri.

Bottom Line

  • Value-based purchasing is designed to be budget-neutral; some will earn more, some less.
  • Get used to being measured.
  • Learn new skills and competencies.
  • Embrace it; don't be lulled into complacency.


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October 2014


The Hospitalist newsmagazine reports on issues and trends in hospital medicine. The Hospitalist reaches more than 25,000 hospitalists, physician assistants, nurse practitioners, residents, and medical administrators interested in the practice and business of hospital medicine.

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ISSN: 1553-085X