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“quality codes” and modifiers that may be used to report the measure, you are ready to start reporting. The final step is to establish a process in your office to ensure that you consistently identify eligible patients, correctly document the correlating clinical information in the patient’s chart, and accurately report the information on your Medicare claims. To ensure you successfully report for at least one patient, it is recommended that you overshoot the target and report the quality measure you select for at least several patients. With claims-based reporting, a quality code is billed like any other procedure or E/M code (on Line 24 of the CMS 1500 form or electronic equivalent). However, quality codes are billed at a $0.00 charge (or $0.01 if your billing system will not accept zero), and are denied by Medicare with remark code N365 indicating the code is not payable but is counted for tracking purposes. Quality codes are only counted when submitted in combination with an eligible diagnosis and service. Quality codes submitted by themselves or along with services that have already been paid will not be counted (i.e. no retroactive claims-based reporting). As with any other “billed” Medicare service, quality measures should be supported by documentation in the medical record, which will provide some protection in the event of an audit. Documentation should indicate in clinical terms the basis for the quality code that is reported; it is not sufficient to simply write the code in the medical record.

Earning PQRS Incentives

Physicians and other eligible providers may earn an incentive equal to 0.5% of allowed charges for 2013 and for 2014. To qualify, physicians must report at a higher frequency on at least three different individual measures (instead of just the one measure required to avoid the penalty) or one measures group (consisting of three or more related individual measures). Individual measures must be reported for at least 50% of eligible Medicare patient encounters, and all individual measures within a measures group must be reported for at least 20 unique Medicare patients. For claims-based reporting, the process for earning the incentive is similar to the process outlined above for avoiding the penalty – select measures, learn the reporting requirements, and start reporting on Medicare claims. To qualify for the incentive bonus, you should identify the three most frequently occurring measures (or the most applicable measures group) and you should report the measures as frequently as you can for eligible Medicare patients. Because the threshold to receive the incentive is so high, it is advisable for physician practices to implement processes that enable 100% reporting, which will maximize your chances of receiving the incentive bonus. This might include training your front-office staff or medical assistants to screen patients for reporting eligibility prior to each visit based on demographic and diagnosis information, and placing some sort of flag in the patient’s record to indicate eligibility. Some practices may even find it helpful to use tracking forms that can be placed in the eligible patient’s chart prior to the visit, completed by the physician and clinical staff during the encounter, and then used by billing staff to complete the reporting process. Also, physicians should be advised that the reporting period is January 1st to December 31st, and it may be challenging or even impossible to meet the 50% reporting threshold for the 2013 incentive. Regardless of whether you report individual measures or measuregroups, it is important to choose measures that occur frequently in your practice. By choosing relatively common measures or measure-groups, you will improve the likelihood of meeting the reporting thresholds. CMS encourages physicians to also consider your own quality improvement goals when selecting measures. While a physician’s goals for their patients should always be the primary driver behind any quality improvement ini-

tiative, they are unfortunately not even considered by CMS when determining penalties or incentives. Rather, avoiding the penalty in 2015 and obtaining incentives in 2013 and 2014 is entirely contingent on selecting measures that occur with enough frequency to ensure accurate reporting at or above PQRS minimum thresholds.

More Info about PQRS Reporting

EHR and Registry Reporting: In addition to claims-based reporting, physicians and other eligible providers can report PQRS measures through EHR systems (either directly or through a data-submission vendor) or through approved registries. Practices utilizing EHR systems should consult your vendors about implementing PQRS reporting in your practice, either for purposes of avoiding the penalty or earning the incentive bonus. One advantage of utilizing registry reporting is the ability to “retroactively” report quality measures for patient encounters for which the Medicare claim has already been submitted. Registry reporting provides a mechanism for physicians to report quality measures separate from the claims process. However, registry reporting may be an additional process or system in your medical practice, and you may prefer to utilize claimsbased reporting. Group Practice Reporting Option: The PQRS Group Practice Reporting Option (GPRO) is open to medical groups of any size, and provides different options depending on the size of the medical group. For example, in 2013, Group practices ranging in size from 25-99 eligible professionals will report 29 quality measures for 218 consecutive Medicare patients, or 411 consecutive patients for group practices with 100 or more professionals. Practices wishing to use GPRO must submit a self-nomination letter indicating interest in participation. The next opportunity for GPRO participation will be for the 2014 reporting period. Validation Process if Less Than Three Measures Can Be Reported: If fewer than three quality measures can be reported, physicians may still earn the incentive. CMS uses a “measure-applicability validation process” to verify whether a physician could have reported on additional measures before determining whether reporting requirements for the bonus have been met. CMS analyzes claims to determine if other measures could have been reported (based on ICD-9 and CPT codes). If CMS finds that 30 or more patients/encounters during the reporting period were eligible for reporting another measure, then the physician practice will not have met the reporting requirements. Financial Incentive Paid to TIN: PQRS tracks compliance with the reporting requirements at the individual provider level (using the NPI number), but the PQRS payment will be made to the Taxpayer Identification Number (TIN) used by the reporting physician. Participating physicians within the same practice (using a common TIN) should expect to receive the physicians’ incentives in a lump sum. Likewise, physicians who see patients on behalf of more than one practice (and, therefore, use more than one TIN when submitting Medicare claims) should expect their PQRS payment to be made to the respective TIN under which the services were reported.

Additional PQRS Resources

For more information about PQRS, the California Medical Association has published a guide that is available online at For official PQRS information, please visit the CMS website at www.


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