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Medicare payment program impacts costs, quality of care

Under the Medicare Physician Value-Based Payment Modifier Program – a mandatory pay-for-performance program for physician practices – practices that served socially high-risk patients saw lower costs and quality while practices that served medically high-risk patients saw increased costs and lower quality during the first year, according to data published in JAMA.

“Despite the growth of ambulatory pay-for-performance programs, there is concern about unintended consequences, like disproportionately penalizing practices that care for complex patients,” Lena M. Chen, MD, MS, from the division of general medicine in the department of internal medicine at the University of Michigan and the Office of the Assistant Secretary for Planning and Evaluation at HHS, and colleagues wrote. “There are no prior studies of the [Medicare Physician Value-Based Payment Modified] Program and little is known about performance patterns.”

In this cross-sectional observational study, researchers examined the association between performance and the social or medical risk of patients treated at physician practices during the first year of the mandatory Medicare Physician Value-Based Payment Modified (PVBM) Program. Exposures included high social risk, meaning the practices had a high proportion of patients eligible for both Medicare and Medicaid, and high medical risk, meaning the practices had high mean Hierarchical Condition Category risk score among fee-for-service recipients.

The researchers measured quality and cost z scores using PVBM data from payments made in 2015 based on performance of large physician practices in the U.S. that care for fee-for-service Medicare patients in 2013. Higher z scores indicate better performance on quality while lower scores indicate better performance on costs.

Of 899 physician practices with more than 5 million Medicare beneficiaries, 547 practices were categorized as low social and medical risk, 128 as high medical risk, 102 as high social risk and 122 as both high social and medical risk. Analysis showed that low risk practices performed the best on the composite quality score (z score, 0.18; 95% CI, 0.09-0.28) compared with each of the high-risk practices (high social risk: –0.86 [95% CI, –1.17 to –0.54]; high medical risk: –0.55 [95% CI, –0.77 to –0.32]; high social and medical risk: –0.78 [95% CI, –1.04 to –0.51]; P < .001 across all groups).

Examination of the composite cost score showed that high social risk practices performed best ( –0.52; 95% CI, –0.71 to –0.33), while low risk had the next best cost score (–0.18; CI, –0.25 to –0.1), followed by high medical and social risk (0.4; CI, 0.23-0.57), and high medical risk only (0.82; 95% CI, 0.65-0.99) (P < .001 across all groups). Patterns of total per capita costs related to fewer bonuses and more penalties for high-risk practices. The total costs per capita were $9,506 for low risk practices, $13,683 for high medical risk, $8,214 for high social risk and $11,692 for high medical and social risk.

“Better understanding of the disparities in ambulatory programs may become increasingly important under the [Merit-Based Incentive Payment System (MIPS)], which is modeled after parts of the PVBM Program and replaces it,” Chen and colleagues wrote. “Findings from this study suggest that if current performance patterns persist, practices that serve a high proportion of socially or medically complex patients may fare poorly under the MIPS.” – by Savannah Demko

Disclosures: Chen reports receiving an honorarium from the NIH; grants from Blue Cross BlueShield of Michigan Foundation, the AHA, and the University of Michigan MCubed Program; being part of the Michigan Value Collaborative with Blue Cross Blue Shield of Michigan; and serving as an advisor at the HHS. Please see the full study for a complete list of all other authors’ relevant disclosures.