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Original Investigation
August 1, 2017

Association of Practice-Level Social and Medical Risk With Performance in the Medicare Physician Value-Based Payment Modifier Program

Author Affiliations
  • 1Division of General Medicine, Department of Internal Medicine, University of Michigan, Ann Arbor
  • 2Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor
  • 3Center for Healthcare Outcomes and Policy, University of Michigan, Ann Arbor
  • 4Office of the Assistant Secretary for Planning and Evaluation, US Department of Health and Human Services, Washington, DC
  • 5Department of Medicine, Brigham and Women’s Hospital, Boston, Massachusetts
  • 6Department of Health Policy and Management, Harvard T. H. Chan School of Public Health, Boston, Massachusetts
  • 7Atrius Health, Newton, Massachusetts
  • 8Now with Commonwealth Medicine, University of Massachusetts Medical School, Shrewsbury
  • 9Now with Washington University School of Medicine, St Louis, Missouri
JAMA. 2017;318(5):453-461. doi:10.1001/jama.2017.9643
Key Points

Question  Was there an association between the social or medical risk of patients treated at physician practices and performance during the first year of the Medicare Physician Value-Based Payment Modifier Program?

Findings  Practices that served more socially high-risk patients had lower quality and lower costs, and practices that served more medically high-risk patients had lower quality and higher costs. These patterns were associated with fewer bonuses and more penalties for high-risk practices.

Meaning  As value-based payment programs continue to increase in size and scope, practices that disproportionately serve high-risk patients may be at particular risk of receiving financial penalties.

Abstract

Importance  Medicare recently launched the Physician Value-Based Payment Modifier (PVBM) Program, a mandatory pay-for-performance program for physician practices. Little is known about performance by practices that serve socially or medically high-risk patients.

Objective  To compare performance in the PVBM Program by practice characteristics.

Design, Setting, and Participants  Cross-sectional observational study using PVBM Program data for payments made in 2015 based on performance of large US physician practices caring for fee-for-service Medicare beneficiaries in 2013.

Exposures  High social risk (defined as practices in the top quartile of proportion of patients dually eligible for Medicare and Medicaid) and high medical risk (defined as practices in the top quartile of mean Hierarchical Condition Category risk score among fee-for-service beneficiaries).

Main Outcomes and Measures  Quality and cost z scores based on a composite of individual measures. Higher z scores reflect better performance on quality; lower scores, better performance on costs.

Results  Among 899 physician practices with 5 189 880 beneficiaries, 547 practices were categorized as low risk (neither high social nor high medical risk) (mean, 7909 beneficiaries; mean, 320 clinicians), 128 were high medical risk only (mean, 3675 beneficiaries; mean, 370 clinicians), 102 were high social risk only (mean, 1635 beneficiaries; mean, 284 clinicians), and 122 were high medical and social risk (mean, 1858 beneficiaries; mean, 269 clinicians). Practices categorized as low risk performed the best on the composite quality score (z score, 0.18 [95% CI, 0.09 to 0.28]) compared with each of the practices categorized as high risk (high medical risk only: z score, −0.55 [95% CI, −0.77 to −0.32]; high social risk only: z score, −0.86 [95% CI, −1.17 to −0.54]; and high medical and social risk: −0.78 [95% CI, −1.04 to −0.51]) (P < .001 across groups). Practices categorized as high social risk only performed the best on the composite cost score (z score, −0.52 [95% CI, −0.71 to −0.33]), low risk had the next best cost score (z score, −0.18 [95% CI, −0.25 to −0.10]), then high medical and social risk (z score, 0.40 [95% CI, 0.23 to 0.57]), and then high medical risk only (z score, 0.82 [95% CI, 0.65 to 0.99]) (P < .001 across groups). Total per capita costs were $9506 for practices categorized as low risk, $13 683 for high medical risk only, $8214 for high social risk only, and $11 692 for high medical and social risk. These patterns were associated with fewer bonuses and more penalties for high-risk practices.

Conclusions and Relevance  During the first year of the Medicare Physician Value-Based Payment Modifier Program, physician practices that served more socially high-risk patients had lower quality and lower costs, and practices that served more medically high-risk patients had lower quality and higher costs.

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