Medicare’s Value-based Modifier and Quality

By December 14, 2017 Commentary

The pinnacle of Medicare’s attempts to improve quality and lower spending by paying for it as measured by a plethora of outcomes is the value-based purchasing reimbursement modifier.  It isn’t working, according to research in the Annals of Internal Medicine.   (Annals Article)   The program was phased in over 2013 to 2015, depending on practice size.  It is now supposed to be supplanted by the “MIPS” program, which likely will see a similar fate, as many physicians have already indicated they just won’t even try due to the program’s complexity and the cost of trying to become “high value”.  The researchers in this study attempted to ascertain whether the value-based program was associated with real quality improvements and the extent to which it might disproportionately penalize practices with poorer or minority patients, as has been suggested by other research.  Key outcomes assessed were 30-day all-cause hospital readmission rates, admissions for ambulatory care sensitive conditions and total Medicare spending per beneficiary.  A variety of health status adjustments were used in the analyses.  Since the value-based program was phased in by practice size, there was a natural opportunity to test whether it seemed to create quality improvement.

No significant association was found between application of the value-based purchasing modifier to a physician practice and its performance on outcome measures.  This may be because the penalties were relatively small and the bonuses hard to achieve, so clinicians just shrugged their shoulders.  It may also be that it takes more than two years for practices to implement changes that would impact performance.  Or it may be that the program is just designed in a manner that is unlikely to ever incentivize real improvements in quality and cost control.  This piece of research also validated the concern that risk adjustment was inadequate in the program; as it found that adding additional health status adjusters significantly changed relative practice performance, aiding those practices which dealt with large populations of the poor or minorities.  MIPS is currently doomed to suffer from the same design inadequacies.  Of course, the easiest thing for Medicare to do is voucherize the program and encourage everyone to get in MA plans,  where a long line of research shows better quality, care management and cost control.

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