Value Based Payment Modifier



What is the Value Based Payment Modifier (VM)?

The VM assesses both quality of care furnished and the cost of that care under the Medicare Physician Fee Schedule (MPFS) and CMS has begun with a phase-in of the VM in 2015, which will be completed by 2017. Implementation of the VM is based on participation in Physician Quality Reporting System (PQRS). For CY 2013, the VM applies to groups of physicians with 100 or more eligible professionals (EPs). In CY 2014, CMS is expanding this to groups with 10 or more EPs. 

Overview of VM Program in 2013 and 2014 Reporting Periods

Value Modifier Chart


Click here for additional information on the VM program available on the CMS website.

How does the Value Modifier work with PQRS?


How are my Quality and Cost Scores Calculated?

CMS VBPM Quality Tiering

Each group then receives two composite scores (quality and cost), based on the group's standardized performance (e.g. how far away from the national mean). Group cost measures are adjusted for specialty composition of the group. This approach identifies statistically significant outliers and assigns them to their respective quality and cost tiers.

Quality/ Cost

Low Cost

Average Cost

High Cost

High Quality




Medium Quality

 +1.0x* +0.0%


Low Quality


How are Patients Attributed to my Group for Purposes of Cost Calculation?

Step 1: Identify all beneficiaries who have had at least one primary care service rendered by a physician in a group. 
Step 2: Assign beneficiaries who have had a plurality of primary care services (allowed charges) rendered by primary care physicians.
Step 3: For beneficiaries that remain unassigned, assign beneficiaries who have received a plurality of primary care services (allowed charges) rendered by any EP. 

Exclusions: patients that are part year beneficiaries (including those new to Medicare), died during the year, or had one or more months of Medicare Advantage are excluded from the attribution for calculating costs. 

What Role to the Physician Feedback (QRURs) Reports Play in This?

The QRUR reports distributed by CMS to physicians play a crucial role in informing providers and groups impacted by the VM on areas that present opportunities for improvement as it relates to their quality and cost scores. The bottom half of the timeline below shows when the reports are releases and who will receive them. Those groups (25+ EPs) receiving the reports in September of this year will notice new features in the report, including:
  • Drill down table including all beneficiaries attributed to the group, their resource use, specific chronic disease
  • Drill down table including all hospitalizations for attributed beneficiaries
  • Drill down table of individual EP PQRS reporting (December 2013)
All groups and solo practitioners will receive QRURs in late summer of CY 2014

Click Here to access QRUR reports (and archived reports) on the CMS website.

I'm in a Group with 10+ EPs, What Do I need to do in CY 2014?

Step 1: Choose a PQRS Reporting Mechanism 
  • Web interface (GPRO)- Group must self-nominate/ register (May 2014- September 2014)
  • CMS Qualified Registry (such as the Academy's PQRSWizard)
  • EHR
  • Utilize 50% Individual Reporting Option

Under the individual reporting option, each provider in your group can choose how they wish to report on PQRS. All measure performance for the group is then rolled together and 70% of the EPS in the group must meet QPRS criteria for CY 2016 payment adjustment in order to meet the 2016 VM requirements. Groups do not have to self-nominate for this option. Individuals can report via Claims, EHR, CMS Qualified Registries, or new Clinical Data Registries (QCDRs).

Click Here to self-nominate / register for the VM program with CMS.

CMS VBPM Timeline

If you have questions regarding the value based modifier, please contact the Academy at