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The PQRS challenge: Will quality metrics improve care or create more reimbursement red tape?


Your reimbursement likely will be tied to outcomes soon. Some experts say that the Centers for Medicare and Medicaid Services (CMS) penalties for not participating in the Physician Quality Reporting System (PQRS) signal that the pay-for-performance trend is not fading away-likely will be adopted by private payers.

Your reimbursement likely will be tied to outcomes soon. Some experts say that the Centers for Medicare and Medicaid Services (CMS) penalties for not participating in the Physician Quality Reporting System (PQRS) signal that the pay-for-performance trend is not fading away-likely will be adopted by private payers.

“I think we’re slowly transitioning out of fee-for-service and into a system that rewards for quality while controlling cost,” says Miranda Franco, government affairs representative for the Medical Group Management Association. “The intent of CMS is to have physicians moving toward capturing quality data and improving metrics on [them].”

 To date, PQRS has doled out an estimated $261 million in incentives for quality reporting over the last 6 years, and participation has been growing, with 280,229 eligible professionals reporting in 2011, according to the latest estimates from CMS on April 1. The adoption of PQRS, however, has been considered slow even with the 2% bonus payments for Medicare reimbursements. Why? “It’s a big burden for a physician practice,” says healthcare lawyer and practice consultant David Harlow, JD, MPH. “It’s not worth people’s while to participate.”

But the Affordable Care Act (ACA) is pushing for pay-for-performance, and the new 1.5% reimbursement penalty for not reporting data in 2013 could finally give the feds the PQRS participation levels they seek.

What is the PQRS?

The PQRS was first created under the Tax Relief and Health Care Act of 2006. Initially dubbed the Physician Quality Reporting Initiative, the program offered 1.5% bonus payments for successful reporting on quality measures. The Medicare Improvement for Patients and Providers Act of 2008 made the program permanent and included increased PQRS incentive payments. Additional changes came with the passage of the ACA in 2010, including provisions for program penalties starting in 2015. The ACA also made room for additional incentives related to maintenance of certification (MOC) activities.

The overall goal of the PQRS, according to CMS, is to collect meaningful data that can help lead to improved patient care. The program uses a series of measures-138 for 2013-developed by leading physician organizations to evaluate the level of care being provided by doctors. Measures consist of a denominator and numerator. PQRS denominators describe the eligible cases for each measure, such as the eligible patient population associated with a measure’s numerator. The numerator describes the clinical action required by the measure for reporting and performance, according to CMS.

How does quality reporting work?

The PQRS is not something you need to sign up or register for, Franco says. To qualify, a practice simply must meet CMS’ criteria for satisfactory reporting for a particular reporting period. Groups, however, must self-nominate to submit data as a group rather than individually, CMS notes.

The quality measures for 2013 PQRS address areas such as preventive care, chronic- and acute-care management, procedure-related care, and care coordination. Review the 2013 PQRS Measures List (see the downloads and links at www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/MeasuresCodes.html) for detailed guidance. CMS recommends considering typical clinical conditions treated, types of care provided, the setting the care, and quality improvement goals for 2013 when selecting measures to report.

When it comes to reporting, you can choose from several options, including reporting via paper claims or registry (each with multiple reporting options), reporting through an electronic health record (EHR) system, or reporting through the group practice reporting option. (See “2013 PQRS participation" and “2013 PQRS reporting periods,” below.) One way you can flag cases that are eligible for measures reporting is to implement an edit in your practice’s billing software so that you must enter quality data codes (QDCs) before final submission. The edit then could flag claims based on a combination of codes, CMS suggests. (See “Resources,” below, for more places to get help.)

Franco adds that, at least for this year, the key to participation is just that-participating. CMS won’t be “grading” physicians on how well they meet their quality measures to start, only that they are able to report data.

Why participate?

So why take part in PQRS? “Because people are paying attention to it,” says John Sawyer, MD, an internist with Hudson Headwaters Health Network in upstate New York.

PQRS aims to give physicians a nudge-via the incentive payments and penalties-toward improving patient care thorough evidence-based measures in preparation for future pay-for-performance measures, Franco says.

If the 0.5% to 2% bonus that was offered over the past 6 years wasn’t enough motivation, CMS will now-through a mandate from the ACA-begin to penalize physicians who don’t report data through PQRS.

The 0.5% incentive payment for participation in PQRS is only available in 2013 and 2014, Franco says. Beginning in 2015, eligible professionals who have unsatisfactory reporting or non-participation for the 2013 reporting period will be subject to a 1.5% penalty. That penalty increases to 2% in 2016, she warns.

But Sawyer insists there is more to it than securing incentives or avoiding penalties.

“People are passed the time of saying that whatever happens in an encounter is okay and [it will be paid for]. The care that comes out is variable,” he says. Both federal and private payers are looking for ways to reward those who are doing a good job and to prod those who aren’t, he adds.

“If you’re taking good care of your patients, you would be doing these things already. They are a part of standard care,” Sawyer says. Reporting is just the next step, he adds.

To date, doctors have viewed PQRS as burdensome but also haven’t embraced reporting because the incentives were small and payments often were delayed, Harlow says.

“A lot of people have just not bothered,” he says. “I would guess that participation has gone up over time, but it’s still pretty low. I would expect it will remain low. It will start to get higher when there’s a 2% penalty.”

For many practices, complying with PQRS requirements will add a significant administrative burden for which some might continue to believe it is worth incurring a 1.5% penalty, Harlow says.

Although PQRS may indeed involve much burden and little financial incentive, Harlow says he sees a benefit in the bigger-picture view.

“The ultimate goal of all this is to improve care for all, so the idea is to tie compliance with these measures,” he says.

Harlow says by tracking management of chronic diseases, methods for improved management could be revealed and lead the healthcare system further down the path of evidence-based medicine and toward developing more standards of care for population-based medicine.

“To me, the key in all of this is to tie it to performance so we have outcome measures rather than process measures,” Harlow says.

Although it’s important to have data on specific measures, the greater benefit comes from identifying trends over time, he says.

Avoiding the penalty

In the eyes of CMS, doctors have had a lot of time to start using the PQRS, Franco notes. Initially, the agency is looking to make participation as easy as possible and will offer an administrative claims option. More information on filing for this alternative will be made available later this year, but Franco says that physicians may be able to select this choice and, therefore, allow CMS to vet their claims for them. The physician would simply provide the data for CMS to process. Providers who select this option won’t receive any additional incentives, but they will avoid the penalty. This option, Franco says, will only be available in 2013 and 2014, to reduce the administrative burden of the program on practices and increase compliance.

Individual, solo physicians must select at least three measures to report on and meet criteria thresholds, Franco adds. But another option would allow a doctor to choose just one quality measure, such as smoking cessation. The physician would have to report his or her liability threshold-which could be around 30 patients-and document how he or she talked to or educated patients about that measure. Completing this reporting option, again, would result in no additional payment, but it would keep a doctor from facing a penalty for non-participation, Franco says.

Implications for other programs

Properly reporting PQRS data could have other implications beyond the one program, Franco notes. Although CMS clarifies that participation in other federal programs does not help or hinder PQRS incentives or penalties, PQRS participation could boost incentives in other programs.

Currently, only groups of 20 or more must participate in the value-based payment modifier (VBPM) program, but that program will extend to all physicians by 2017, so compliance will be industry-wide by the 2015 reporting year. 

The VBPM depends on how well you report PQRS data for 2013, and unsatisfactory reporting for 2013 or failure to report altogether will result in a 1% penalty in 2015 in addition to the 1.5% PQRS payment penalty, Franco cautions. Participating in PQRS now will help physicians prepare for a time when the modifier affects everyone, Franco says.

Just as room exists for additional penalties beyond the PQRS participation penalty, the system also may allow for greater incentives, Franco adds. Eligible professionals working with a designated MOC entity can earn another 0.5% payment (in addition to the 0.5% PQRS payment) for successful participation in both the PQRS and MOC programs. Physicians must submit data for a 12-month period, participate in MOC, and complete a qualified MOC practice assessment.

CMS says it has been working over the past 2 years to create more harmony between its programs, to reduce duplicate reporting efforts. For example, for 2014, PQRS largely adopted the stage 2 meaningful use criteria (reporting nine measures across three domains) and measures for meeting the clinical quality measures component of meaningful use. PQRS, meaningful use, e-prescribing, VBPM, and the Medicare Shared Savings Programs all share some common elements, Franco notes, adding that PQRS will “serve as the backbone for a lot of the new emerging programs.”

 How far will quality reporting go?

As more federal programs base reimbursements on quality measurements, private payers will, without a doubt, take note. 

What remains unclear is how private payers will apply pay-for-performance measures in their models going forward. Franco expects more quality measures will be tied to private-payer reimbursements, although they might not be the same specific quality measures used by the PQRS. CMS can’t speculate on the future of private-payer models, but the agency acknowledges that many of its standards eventually are adopted in the private sector.

“As the feds lead, everyone else is going to go,” Sawyer adds.

Both the government and private payers definitely are moving toward more quality measurements and need criteria to do that, and PQRS is a first step, he says.

“It’s the beginning of what I think will eventually be a multidimensional way of how they are trying to grade us,” Sawyer says.

Payers, the government, and the public are all paying attention to-and demanding more-quality measurement and accountability, he says. Almost every big insurance company has a quality program similar to the PQRS already, and the trend will only continue to grow, Sawyer says.

“Both on the Medicare side and on the private payer side, there are payment incentives for outcomes,” Harlow agrees.

And aside from incentives and penalties, Harlow says room for greater cost efficiencies exists within the healthcare industry through quality reporting. Measures that identify ways to achieve better outcomes in primary and preventive care could lead to less emergency care and better management of chronic diseases and conditions, he says.

“We’ve known about that, but if we can now incentivize providers to move in that direction, that benefits the entire system,” Harlow adds. “It’s important to think about the move from these process measures to outcome measures. Outcome measures are going to be more prevalent in the future than they are today. We’re going to be moving more from the fee-for-service measures. Folks who are ready for those moves before they happen will benefit.”

To view the web exclusive charts on reporting options and reporting periods, please go to:



10 tips on PQRS

To help you better understand the Physician Quality Reporting System (PQRS), we asked a practicing physician and consultant for five tips each. Their suggestions: 

John Sawyer, MD, an internist with Hudson Headwaters Health Network in upstate New York

1. In purchasing an electronic health record (EHR) system, be aware of systems that do a better job at extracting data automatically. 

2. Structure encounters to ensure that you capture the necessary data on paper or within the EHR system so that you can attest to meaningful use. 

3. Select to report on quality measures related to conditions you frequently encounter in your practice or measures that you care a lot about.

4. PQRS provides a framework for groups to communicate with one another or to facilitate better communication between physicians and specialists.

“Everyone wants the same information and wants to push providers to get it,” Sawyer says. Increased communication is better for continuity of care, follow-up efforts, and for closing loops in systems of care that will lead to better care for everyone, he adds.

5. “Don’t be afraid of this,” Sawyer concludes.

You are not deferring the responsibility of care to someone else; he adds; you simply are reporting on measures that were developed by peers in the medical profession, actions that, generally, most physicians agree are necessary and should be measured.“I think very few physicians would dispute these are not important things to reach for if not achieved for everybody.”

David Harlow, JD, MPH, healthcare attorney and practice management consultant

1. EHRs will help with data collection and processing. “You just have to keep your records properly. It’s a little bit of easy money for collecting information you should be collecting anyway,” Harlow says.  

2. The PQRS is a way to keep track of a set of measures that the Medicare program has deemed important. “Personally, I would prefer they would focus on six that would be the most predictive of outcomes,” he says, suggesting that the program could be a little bit more focused so that, after 5 or 10 years, it could be determined what measures are most predictive of good outcomes. “The danger is, physicians could focus on just the things that are being measured and the other things fall off the table.” 

3. A greater “bang for the buck” will occur as the private sector jumps on board, he says. Practices could make significantly more money on the private-payer side for reporting these measures. The more people get comfortable with reporting on and meeting these measures now, the easier it will be to incorporate doing so later.

4. “It’s not just about collecting the data, but to focus on [improvement] from one year to the next,” he says. “The focus on tracking [data trends] will enable you to take the next step.”

5. It’s better for providers to be ready for the shift to pay-for-performance sooner rather than later. Being able to show you aren’t just collecting data, but that you also are using those data to improve outcomes from year-to-year, will be increasingly important.


The government and organizations offer assistance related to the Physician Quality Reporting System (PQRS).

For step-by-step instructions on beginning the PQRS program, see www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/How_To_Get_Started.html.

You can find quality data codes and G and F codes online in the Centers for Medicare and Medicaid Services (CMS) measure specs manual, which is updated annually. You can download the manual at www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2012_PhysQualRptg_ImplementationGuide_MeasuresList_01162012.zip.

CMS has created a variety of educational resources and visual tools that can help you decide the path that is right for you, says Miranda Franco, government affairs representative for the Medical Group Management Association (MGMA). (See “2013 PQRS participation“ and “2013 PQRS reporting periods,” above.)

The MGMA also offers its members a tool called Interactive PQRS Impact Assessment, Franco says. The tool was created to help explain participation requirements for the 2013 PQRS program. It also offers information about the value-based payment modifier program, she adds.

CMS also offers online tools through the QualityNet Help Desk, which can answer questions about reporting. The help desk’s contact information can be found at www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/HelpDeskSupport.html.

Much assistance with PQRS compliance also may come from a tool many practices already possess: the electronic health record (EHR) system, says John Sawyer, MD, an internist with Hudson Headwaters Health Network in upstate New York. CMS allows reporting through EHRs, and a good system automatically will extract and record data and provide free communication of that information back to payers, he says. 

“As EHRs evolve, better systems are going to be extracting data automatically, and you’ll be paid for it,” Sawyer adds.



Free Medical Economics Web seminars

View the Medical Economics EHR Web Seminar “Collecting Data for PQRS Reporting” on demand at http://medicaleconomics.modernmedicine.com/ehrwebseminars#seminar1

Learn four methods for reporting Physician Quality Reporting System information, which reporting method is best for your practice, how to optimize your data submissions for Centers for Medicare and Medicaid Services compliance, and how to qualify for the maximum allowable incentive payments.

View other previous Web seminars, and register for free upcoming Web seminars on mobile technologies, practice management, meaningful use 2, and increasing practice revenue, at http://medicaleconomics.modernmedicine.com/ehrwebseminars.

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