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Performance-Based Payment: A Tentative First Step

Physical therapists and other eligible professionals can qualify for a bonus under Medicare by reporting on a set of quality measures. But the initial benefit is limited.

By Gayle Lee, JD

With July 1 implementation of Medicare's first performance-based payment bonus rapidly approaching, physical therapists (PTs) are trying to determine whether they can qualify and wondering how committed federal policymakers are to developing and basing payment on measures that truly will reflect the quality of services provided to Medicare beneficiaries.

Many questions remain. What can be written is this: In the initial phase of the quality reporting bonus payment initiative for 2007, PTs will be able to report screening for fall risk as a quality indicator, thanks to APTA's success in modifying the measure. But even while additional measures are being developed that would apply to services provided by PTs, it's unclear whether the Democratic majority in Congress will continue to support a bonus payment-for-performance concept for 2008 and beyond.

Seeking Quality Links

Congress, the Centers for Medicare and Medicaid Services (CMS), and the Medicare Payment Advisory Commission (MedPAC) all agree that the Medicare program should establish policies to improve the program's value to beneficiaries and taxpayers by rewarding providers for efficient use of resources and by creating incentives to increase quality. They support pay for performance that links payment to the quality of care furnished by physicians and other health care practitioners.

Congress took a first step toward establishing a pay-for-performance payment system by including a provision in the Tax Relief and Health Care Act of 2006 (TRHCA) to create a 1.5% bonus payment to PTs and other eligible professionals who successfully report to CMS on a designated set of quality measures. CMS dubbed the program the Physician Quality Reporting Initiative, or PQRI.

The quality-reporting program applies to covered services furnished by “eligible professionals” and billed under the physician fee schedule. The list of eligible professionals includes PTs, physicians, occupational therapists, speech-language pathologists, podiatrists, optometrists, dentists, chiropractors, physicians' assistants, nurse practitioners, clinical nurse specialists, nurse anesthetists, nurse midwives, social workers, psychologists, dieticians, and nutritionists.

For 2007, CMS had identified a total of 74 quality measures to be used in reporting. (These measures are available at www.cms.hhs.gov/PQRI as a download from the Measures/Codes Web page.) From the perspective of PTs, these measures betrayed a significant deficiency: All of them previously were developed by physicians and their associations for use in physicians' practices. At the time they were identified by Congress for use in the 2007 PQRI, none of them had been designed for use by PTs or any other non-physician professionals. Worse still, the defined consensus-based process for measure development under the American Medical Association's Physician Consortium for Performance Improvement could not easily be accelerated to allow refinement of the existing measures in time for their use in 2007.

PTs and the 2007 PQRI

After meeting with officials from CMS and the Consortium, APTA proposed modifications to the coding for four existing physician measures that appeared to be clinically appropriate for PTs to use: screening for fall risk, plan of care for urinary incontinence in women aged 65 and older, asthma assessment, and osteoporosis counseling. Of the four, only fall-risk screening was modified to allow PTs to use it in the 6-month reporting program for 2007.

CMS has included on its Web page specifications that describe when each measure is reportable and which quality data code to report. PTs who plan to participate in the program should become familiar, therefore, with the specifications for the fall-risk screening measure.

There is no enrollment or registration requirement to begin reporting the fall-risk screening measure on July 1. PTs and other practitioners will report on the quality measures by placing the appropriate CPT Category II code or G-code either on the paper-based CMS 1500 claim form or on the equivalent electronic transaction claim, the 837-P. A dollar value of $0 should be placed next to the code. The quality data codes must be reported on the same claim as is the patient diagnosis and service to which the quality data code applies. PTs should check with their software vendors to ensure that they have the ability to include the quality measure codes on the claim form.

Since there is only one quality measure applicable in 2007 to services provided by the PT, the fall-risk measure must be reported for at least 80% of the cases to which it applies. In cases in which four or more quality measures that apply to the service are provided by an eligible professional, at least three measures selected by the eligible professional must be reported for at least 80% of the cases in which they apply. CMS plans to use sampling to determine whether applicable measures were reported 80% of the time. Initially, the agency plans to focus on those who have reported fewer than three quality measures.

A determination of whether reporting has been successful will occur at the individual professional level using the National Provider Identifier (NPI). The claim form will identify the PT's NPI, along with the CPT codes describing the services and the quality measure. Physical therapy practices will need to establish a system that will enable them to identify patients to whom the quality measure applies and track the 80% threshold to ensure that it is met.

PTs and other practitioners who participate in the program will earn a 1.5% bonus payment (subject to a cap) on allowed charges billed under the fee schedule for services furnished between July 1 and December 31, 2007. These claims must be part of the CMS National Claims History file by February 29, 2008. The bonus amount will be paid in mid 2008 and is based on all claims, not just those that include quality reporting measures.

The NPI number of the PT will be used for individual reporting purposes, but the bonus payment will go to the Taxpayer Identification Number (TIN) of the entity or individual that is billed. If, for example, a physical therapy group practice consists of five physical therapists, reporting is linked to each PT's NPI for determination of the 80% threshold, but individual bonuses are aggregated and paid to groups that bill under one TIN.

CMS will issue confidential feedback reports to professionals at around the time the lump-sum bonus payments are made in mid-2008. The quality data reported will not be publicly released. To access these confidential feedback reports, providers will need to complete an identity verification process.

Next Year and Beyond

CMS will work on new measures for 2008, but the submission timeline is very short. Proposed new measures will be published in a rule this August and finalized in November, so CMS already is well into reviewing them to determine whether they should be considered for the proposed rule. These may include structural measures, such as electronic medical records, and registries. New measures must be adopted or endorsed by a consensus organization, such as the Ambulatory Quality Care Alliance or the National Quality Forum. A PT is representing APTA on a panel that is developing new measures that, if adopted by CMS, would apply to therapy services in 2008.

It is also unclear how committed the Democratic majority in Congress will be to providing funds to pay for reporting of quality measures. The TRHCA authorized the 1.5% bonus payment for the last 6 months of 2007, so Congress must take action this year if any bonus payment is to be authorized for 2008 or beyond. Some of the leading Democrats on Capitol Hill are less than enthusiastic about bonus payments for quality measure reporting, so it's possible the reporting process could continue without any additional financial incentive for providers to participate.

Even though PTs have only one quality measure to report in 2007 and the dollar amount of the bonus may not seem high, the physician quality reporting initiative provides a good opportunity for PTs to prepare for future pay-for-performance programs. Despite the apparent lack of congressional enthusiasm, policymakers retain considerable interest in basing payment on performance-not only in the case of Medicare, but also Medicaid and other third-party payers.

It is important that PTs be familiar with the concepts and procedures of participation in performance-based payment programs, and that they prepare their practices to benefit from new payment structures.
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Gayle Lee, JD, is director of APTA's Regulatory Affairs Department. She can be reached at gaylelee@apta.org .

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