The value-based modifier program is a budget neutral payment modifier based on relative quality and cost of care. Quality and Resource Use Reports will provide the quality-related feedback. Medicare plans to adjust physician payments using quality outcomes data from the Physician Quality Reporting System (PQRS) and cost data from Medicare claims for fee-for-service patients.
According to the Patient Protection and Affordable Care Act, the modifier must be applied to all physicians and physician groups by January 1, 2017. This is a pay for value (i.e., quality relative to cost) program– higher value gets higher pay; lower value gets lower pay, based on quality tiering.
In 2019 and beyond, the value-based payment modifier will be replaced by the merit-based incentive payment system (MIPS).
The Centers for Medicare & Medicaid Services site(www.cms.gov) has more information on the value-based payment modifier.
Value Modifier Year
Physician Group Size
Possible Outcomes Based on Quality Tiering
100+ eligible professionals (EPs)
Downward adjustment (max -1.0%)
Upward adjustment (max +2x)*
Downward adjustment (max -2.0%)
Downward adjustment (max -4.0%)
Upward adjustment (max +4x)*
2-9 and solo practitioners
Downward adjustment (max -2.0% non-reporting)
All groups and solo practitioners
Downward adjustment (% TBD)
Upward adjustment (TBD)
*The “x” in the upward adjustment is a factor dependent on the total amount of downward adjustments in the same period, since the VBPM is budget-neutral. EPs are eligible for an additional +1.0x if average beneficiary risk score is in the top 25% of all beneficiary risk scores.
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Value-based Payment Modifier