Issue: July 2015
July 08, 2015
15 min read

PQRS: Health care focus shifts from volume to value

Issue: July 2015
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During the last several years, a seismic change has occurred in health care payment and delivery, shifting the focus from volume-based to value-based reimbursement. In value-based care, providers are rewarded for the kind of care they provide, not how much they provide.

The shift began in 2007 when CMS established the Physician Quality Reporting Initiative under the Tax Relief and Health Care Act of 2006. The goal of the program was to improve health care in the United States by collecting and evaluating meaningful quality data.

Now called the Physician Quality Reporting System (PQRS), the program is just one part of a multipronged approach aimed to improving the quality of U.S. health care. The meaningful use electronic health record (EHR) incentive program and the value-based modifier are two other critical components.

“[Secretary of Health and Human Services] Sylvia Burwell has been public about her desire for physician reimbursement to be based on alternative measures, like value-based pricing and value-based reimbursement up to 90% by the year 2018,” John M. Tokish, MD, the education chairman for the Arthroscopy Association of North America, clinical professor at the University of South Carolina School of Medicine – Greenville and associate fellowship director for the Steadman Hawkins Clinic of the Carolinas, said. “I think most surgeons understand that we are going to be graded on what these outcomes are.”

In the early days of PQRS, eligible providers — physicians and physician groups who are paid under the Medicare Physician Fee Schedule — were offered incentives to participate. Providers who successfully reported their quality data to CMS earned up to 1.5% in bonus payments on their Medicare Part B Physician Fee Schedule. In 2008, the incentive was increased to 2% under the Medicare Improvement for Patients and Providers Act.

John M. Tokish, MD

John M. Tokish, MD, the education chairman for the Arthroscopy Association of North America, clinical professor at the University of South Carolina School of Medicine – Greenville and associate fellowship director for the Steadman Hawkins Clinic of the Carolinas, highlighted that the PQRS will start affecting physicians’ bottom line in terms of their Medicare reimbursement rate..

Image: Hawkins Foundation

Despite these incentives, providers have been slow to participate in PQRS. In 2013, 51% of the 1.25 million eligible providers submitted data, according to a press release from CMS.

Some find the program confusing

There are several reasons for the lack of participation. Some providers are unaware of the program while others have shunned it because it is cumbersome.

David C. Ayers, MD, chair of orthopedics at the University of Massachusetts in Worcester, Mass, noted nonparticipation in PQRS for 2013 will lead to a 1.5% penalty for every claim files in 2015, with failure to participate in 2014 and 2015 both resulting in 2% penalties for 2016 and 2017 claims. He highlighted that the impact is cumulative, leading to a potential “penalty of 7.5% on all your Medicare billings” if a physician does not participate from 2013 through 2015, and the 2% withhold remains intact.

David C. Ayers

David C. Ayers


“I do not think providers understand the system,” Ayers said. “Many doctors and group practices say the program is confusing and time-consuming and choose not to participate.”


Other physicians feel that the PQRS program adds little to their practices. According to a 2014 survey from the Medical Group Management Association, 83% of respondents indicated that Medicare’s quality programs do not enhance patient care. However, the U.S. federal government, CMS and other organizations have made it clear that health care providers are expected to participate in the process of providing documentation regarding the quality of their care for all patients.

In this Cover Story, Orthopedics Today spoke with the experts on PQRS and other quality initiatives, about how practices can get started in the program to avoid future reimbursement cuts and how the quality programs will continue to evolve.

Incentives replaced with penalties

With the passage of the Affordable Care Act in 2010, PQRS moved from the incentive phase to the penalty phase: 2014 marked the last year that physicians could qualify for a payment bonus. Instead, physicians and group practices who do not successfully submit quality data will receive a negative payment adjustment. This year, for example, 469,755 eligible providers received a 1.5% reduction in their 2015 Medicare Part B Physician Fee Schedule based on their 2013 reporting, according to the CMS. Physicians who do not submit quality data this year will be docked 2% in Medicare reimbursement in 2017.

“If you are not part of the program now, it is going to start affecting your bottom line in terms of your Medicare reimbursement rate,” Tokish said.

The penalty may encourage greater participation, which is projected to lead to true quality improvements in health care.

“What we will likely see is that physicians are going to have to comply with this because it is going to hit them economically,” Tokish said. “At the end of the day, it is an effective incentivizer.”

That hope extends beyond just getting physician participation, though.

“We are hopeful that surgeons will choose a method of reporting that will actually give us meaningful data outcomes,” Tokish told Orthopedics Today. “Not just to comply, not just to satisfy the government requirement and avoid the 2% hit, but to do that in a way that will provide meaningful patient-reported outcomes data for patients and surgeons.”

Getting started in PQRS

To avoid future penalties, orthopedic sources who spoke with Orthopedics Today noted that surgeons should get on board the PQRS program. The first step is to determine eligibility. According to the CMS, any health care professionals or physician groups who are paid under the Medicare Physician Fee Schedule are considered eligible providers.

The next step is to determine participation as an individual or as a physician group. Individual providers will be identified by their National Provider Identifier and Tax identification numbers. A group practice consists of two or more individual eligible providers who have reassigned their billing rights to a single PIN, according to CMS. Group practices may use the group practice reporting option.

Surgeons must then select their reporting method. If an orthopedic surgeon is going to report as an individual provider, there are several reporting methods to choose from:

  • Medicare Part B claims;
  • qualified PQRS registry;
  • direct EHR-certified technology;
  • certified electronic health records technology (CEHRT) via data submission vendor; and
  • qualified clinical data registry (QCDR).

Physician groups have their own reporting methods:

  • qualified PQRS registry;
  • web interface (limited to groups of 25+);
  • direct EHR using CEHRT;
  • CEHRT via data submission vendor; and
  • consumer assessment of healthcare providers and systems (CAHPS) for PQRS via CMS-certified survey vendor.

One of the newest options is QCDR reporting. QCDR differs from qualified registries in that they include measures that fall outside of PQRS.


Currently, there are almost 50 QCDRs covering the various medical specialties; two have been certified in orthopedics: the American Joint Replacement Registry (AJRR) and the Function and Outcomes Research for Comparative Effectiveness in Total Joint Replacement (FORCE-TJR) registry, which just received certification this year. The North American Spine Society is currently developing its own registry, according to the American Academy of Orthopaedic Surgeons (AAOS).

With this reporting option, the surgeon or hospital submits quality information to the registry to satisfy PQRS quality reporting requirements.

“FORCE-TJR submits the surgeon’s data to the PQRS program for [the surgeon] for quality monitoring and to show the improved value of the care [the surgeon] provides,” said Ayers, who is the lead surgeon for FORCE-TJR.

As an added bonus, certification allows the registry to define new quality measures.

“FORCE-TJR has suggested new PQRS measures in orthopedics that CMS has accepted as qualified for PQRS incentive payments. These are measures that all members of FORCE-TJR are already collecting through FORCE, and the measures include patient function and pain which are important to both surgeons and patients,” Ayers said. “No additional data need to be collected in addition to the data already collected for the surgeon to qualify for the surgeon to qualify for full PQRS credit.”

In addition to satisfying their PQRS requirement, the FORCE-TJR registry allows surgeons to examine data important to bundled payment programs and the data necessary to negotiate with accountable care organizations, according to Ayers. Also, the registry provides useful quality data to hospitals.

Provides real-time quality data

“FORCE-TJR provides surgeons real-time data, so they know what their outcomes are with regard to quality, complications and readmissions,” Ayers said. “If there are any issues, they have the opportunity to correct them in real time rather than waiting to see the information when it is publicly reported to CMS on the website.”

The AJRR receives data from more than 3,800 surgeons in more than 500 hospitals, according to the registry’s website. Although initially funded by the Agency for Healthcare Research and Quality, FORCE-TJR is now a public-private partnership with data from more than 200 surgeons on 30,000 TJR patients.

Both registries require that providers or groups pay a fee to submit data.

“[The] AJRR, I think it is about a $10,000, 3-year commitment, which for some practices, is not a small amount of money,” said Stephen T. Duncan, MD, an assistant professor in the Department of Orthopaedics, Adult Reconstruction, Hip Resurfacing, and Hip Preservation at the University of Kentucky in Lexington, said.

Then, eligible providers and physician groups must report on nine individual measures across three of the National Quality Strategy (NQS) domains that will affect clinical quality for 50% of Medicare patients, according to the CMS. The NQS domains are: patient and family engagement, patient safety, care coordination, population/public health, efficient use of health care resources and clinical processes/effectiveness.

The individual measures have been developed by quality groups, the CMS and provider associations. For instance, the American Association of Hip and Knee Surgeons (AAHKS), the Knee Society and the AAOS have created several process measures for total knee arthroplasty, according to Jay R. Lieberman, MD, professor and chair of the department of orthopedic surgery, and director of the Institute of Orthopedics at the Keck School of Medicine at the University of Southern California in Los Angeles. In addition, the AAHKS, the Hip Society and the AAOS are currently developing process and outcomes measures for the hip, he said.


To choose from the hundreds of available quality measures, CMS recommends physicians consider the following:

  • typical clinical conditions treated;
  • types of care provided (eg, preventive, chronic or acute);
  • care delivery settings;
  • 2015 quality improvement goals; and
  • other quality reporting programs (either in use or being considered).

It is important to review these measures annually, as measures may have been added, retired or updated since the previous year, according to the CMS.

New for this year is the cross-cutting measures requirement, according to the CMS. According to the agency’s website, cross-cutting measures cover a wide range of clinical settings in various health care specialties. They include measures such as pain assessment and follow-up, fall risk screening and BMI screening and follow-up. Providers who have at least one face-to-face encounter with a Medicare patient must report one cross-cutting measure. General office visits, outpatient visits and surgical procedure codes are all considered face-to-face encounters, according to the CMS.

Ease of adoption

Some areas of medicine may have an easier time adapting to PQRS, Tokish noted.

“It is relatively easy to measure performance in fields where mortality and infection rate are meaningful outcomes,” he said.

In the orthopedic world, total joint arthroplasty seems to be the easiest fit for PQRS.

“The reason is that the diagnosis is not terribly variable,” Tokish said. “The products and procedures have become somewhat commoditized. Thirdly, is that total joint arthroplasty has outcomes that are relatively easily measured, for example, infection rate, reoperation rate and revision rate.

Outcomes may not be so easily measured in other orthopedic subspecialties.

“If shoulder surgeons were judged based upon reoperation rate or mortality rate, everybody would look good because few people die after shoulder surgery. Meaningful outcomes for most of orthopedic surgery are patient-based and functional, and not routinely or easily collected in metadata,” Tokish said.

PQRS problems

Embarking on PQRS can be expensive and time-consuming depending on how the provider or group approaches it.

“If you are going to get compliance across the board with any patient-reported outcomes, if you do it in the traditional manner, it is difficult and time consuming,” Tokish said. “Fortunately, with the information technology revolution, the IT advancements that we have seen over the past 5 [years] to 10 years, there are a number of platforms out there that have made it much simpler to be able to obtain and collect this data.”

To help, AANA has partnered with Arthrex Inc., a private orthopedic medical device company, to provide one of these platforms available as a member benefit, according to Tokish.

“You can get free access to the Surgical Outcomes System, which is a data-reporting tool that will allow easy web-based patient entered outcome systems with little training.”

Not only can it be expensive, but PQRS can block patient flow.

“How do you do it in your office in a way that is cost effective and does not overburden the patient and have a negative impact on patient flow,” Lieberman said. “We want to get the best possible data, but at the same time, we have to be cognizant to the cost and the burden on the patient and the orthopedic surgeon in collecting this data.”

Currently, the PQRS program does not allow for any kind of risk adjustment, which would account for various patient factors when assessing outcomes, Lieberman said.

“A risk adjustment is absolutely essential with collecting any kind of data,” Lieberman said.

A risk adjustment in a total knee patient, for example, would evaluate whether the patient has a large flexion contracture or assess the quality of their soft tissue, as well as other factors that have been demonstrated to affect outcomes.


“These types of data are not necessarily captured right now,” Lieberman said. “[The] AAHKS has had this initiative for several years to collect these data and see what kind of impact it will have when you look at outcomes.”

Without risk adjustment, some fear that patient care may suffer.

“Unfortunately, I think there is going to be a shift in terms of where the patients are being taken care,” Duncan said. “I think a lot of the private practitioners unfortunately will shy away from taking care of some of the sicker patients. A lot of tertiary referral centers will have to take care of a greater load of these patients … unless we can come up with a way to risk stratify the patients.”

Reform continues to evolve

Despite the many changes in reimbursement, there are still areas that need work and further vetting.

“It is confusing for providers, not just in orthopedics, but in other surgical and medical professions, where you have multiple avenues and perspectives in terms of how the compensation equation is being formulated and how it should be calculated,” said Khaled J. Saleh, MD, who is chair of orthopedics and director of Translation and Clinical Research at Southern Illinois University School of Medicine in Springfield, Ill. He is proposing further clarity with regards to the proposed compensation options that are available to providers and said the respective revenue equation needs to be put on hold until there is evidence that these new compensation models are valid, practical and generalizable.

“With our increasing bandwidth with regards to evidence related to quality and performance metrics, it is critical that before implementing such a large transformation in the compensation model that the variables and metrics are vetted so that they ultimately capture the outcomes that providers, patients and hospitals are seeking. From there, variables can be added, which adds further complexity to the compensation model with increasing scientific evidence, but this would create a loop of innovation and quality improvement,” he said.

Khaled J. Saleh

Khaled J. Saleh

Medicare payment reform will continue to evolve. The SGR Repeal and Medicare Provider Payment Modernization Act of 2015 established the Merit-based Incentive Payment System (MIPS), which is intended to unite the three existing quality programs: PQRS, VBM and EHR meaningful use.

This new program “may solve the multiple fragmentations of compensation that are out there right now,” Saleh said.

Although MIPS is scheduled to be implemented in 2018, many questions remain.

“There is still opaqueness about exactly how each of these programs is going to interplay,” Saleh said.

It is unclear how much input the various medical specialties will have in developing the program or how they will be evaluated under this new paradigm.

“We know the general variables, the EHR, the value-based modifier [and] PQRS, but it is difficult to ascertain the details so that we may begin to prepare for it,” Saleh said. “So, although 2018 seems so far away, it is only a couple of years away.”

Saleh further added that with the delayed roll out of ICD-10, there seems to be good reason for trepidation about whether MIPS will smoothly be implemented — it is all in the execution.

“It was were supposed to unroll 2 years ago, and for a host of reasons that primarily revolve around CMS, insurers and providers’ readiness, ICD-10 has been delayed with a planned launch now in October 2015,” Saleh said.

“Although 2018 is currently the line in the sand [for the MIPS rollout], all stakeholders need to be prepared to move that line in order to ensure proper execution and implementation of this new model once it has been validated,” he said.


The rate of change in health care is also concerning, according to Saleh.

“The rate of change is increasing at alarming rate for physicians and surgeons, hospitals as well as insurers; they are concerned that they just cannot keep up. That timeline of 3 years may be insufficient to completely modify the system.”

Health care reform is critical

All constituents in medicine recognize the need for change and improvement. “I think that all of us recognize the importance of health care reform,” Tokish said. “The need for health care reform is foremost in patients’ minds and surgeons’ minds. With the Affordable Care Act, it shined a spotlight on just how fragile the health care system can be.”

Going forward, physicians must continue to strive for leadership roles in defining quality in medicine. Tokish said, “It needs to be patient-based — that is first. Secondly, it is critical that those patient-based metrics are risk-stratified so that we are comparing apples to apples across the board, so that surgeons and performance and patient outcomes can be standardized. I think if we could start with that, we would be well on our way to providing true value as opposed to some of the definitions that are floating around.” – by Colleen Owens

References: Instruments/PQRS/How_To_Get_Started.html.

For more information:

David C. Ayers, MD, can be reached at University of Massachusetts Memorial Medical Center, 119 Belmont St., Worcester, MA 01605; email:

Stephen T. Duncan, MD, can be reached at the University of Kentucky, 1000 S. Limestone, Lexington, KY 40536; email:

Jay R. Lieberman, MD, can be reached at Keck School of Medicine of USC, 1520 San Pablo St., HCCII Suite 2000, Los Angeles, CA 90033; email:

Khaled J. Saleh, MD, can be reached at Southern Illinois University School of Medicine, 701 N. First St., PO Box 19679, Springfield, IL 62794-9679; email:

John M. Tokish, MD, can be reached at the Steadman Hawkins Clinic of the Carolinas, 200 Patewood Dr., Suite C100, Greenville, SC 29615; email:

Disclosures: Ayers and Saleh report no relevant financial disclosures. Duncan is a consultant for Smith & Nephew and Depuy Mitek. Lieberman receives royalties from DePuy for total knee replacement and he is a consultant for Arthrex. Tokish is a consultant for Arthrex and DePuy Mitek.


Are the PQRS measures adequate for orthopedics?


Performance measures do not represent typical orthopedic practice

The current PQRS performance measures are not adequate for orthopedic surgery. In fact, the current set of measures barely reflects the practice of a typical orthopedic surgeon in the United States. Many of the current measures are process measures and not outcome measures. It is unclear whether adherence to these process steps improves orthopedic patient outcomes. Many of these measures call for the measurement or assessment of a condition, but do not address the actual and practical treatment of that condition in our patients.

David S. Jevsevar

David S. Jevsevar

Another concern is that several of the current measures reflect hospital inpatient services related to musculoskeletal care, but not the direct care of an orthopedic surgeon or within the standard practice of many orthopedic surgeons. For example, although many orthopedic surgeons address the use of tobacco or weight loss by their patients, most practices refer rather than offer direct support to patients who wish to address these issues.

Although most orthopedic procedures in the United States occur in the outpatient setting, the current set of measures does not reflect this crucially important aspect of orthopedic care. Many members of the American Academy of Orthopaedic Surgeons (AAOS) express concern there are not enough orthopedic/musculoskeletal or surgical measures for them to use to comply with the PQRS requirements of nine measures across three domains of care. The cross-cutting measures are often difficult to apply to routine musculoskeletal care. Because of the paucity of performance measures, the AAOS created the Performance Measures Committee to collaborate with orthopedic specialty societies to create relevant, important and practical orthopedic performance measures to improve the care of orthopedic patients.


Measurement is important, yet measures that neither improve practice nor improve outcomes are all too abundant. Drowning in measures will not improve clinical practice or save money and not all measures reflect actual practice. For orthopedics, readmission rates, complications and patient-reported measures of pain and function seem important. Why not start there?

David S. Jevsevar, MD, MBA, can be reached at the Dartmouth-Hitchcock Health Center, Lebanon, NH.

Disclosure: Jevsevar reports no relevant financial disclosures.


Current PQRS model not a good fit

The PQRS was created in 2007 and began in 2009 as PQRI. For several years there has been a “reward” for the physician for participation via an increase in Medicare reimbursement. Many physicians thus embraced PQRS as a “funded mandate” as opposed to the many unfunded mandates that have been levied on during the past several years. Unfortunately, PQRS will soon be unfunded and will go one step further: Non-participation will carry a penalty beginning in 2016, which increases each year through at least 2018. Those who satisfactorily report for the 2015 program year will avoid the 2017 PQRS negative payment adjustment.

William R. Beach

William R. Beach

For 2015, there have been significant increases in reporting options. Physicians can report individually or as a group, and the requirements and financial ramifications are potentially large. The entire program is complicated and trying to educate oneself on the options is necessary, but confusing. The CMS and Medicaid services website provides plenty of detail, but the description is lengthy. One of the more concise references is the 2015 PQRS implementation guide.

The AMA points out the government has aligned the two programs so clinical quality measures in the Electronic Health Record Incentive Program are also included in the PQRS programs.

The question is does the system collect the data will improve patient care or identify beneficial physician procedures? Concerns are, especially for orthopedic surgeons with our many subspecialties, that one model does not fit all or even most. Initially there were few clinical measures that were available for orthopedics. That has been expanded and the group options make the goal attainable, but what is the goal? If the goal is data collection with an emphasis on patient-reported outcomes, working together with surgical subspecialties, CMS could create a much better system.

William R. Beach, MD, can be reached at Tuckhahoe Orthopaedics, Richmond, VA.

Disclosure: Beach reports he is a consultant for Arthrex.