Get to Know VBPM


Get to Know VBPM


You probably know that CMS will introduce a new value measurement system in a couple of years: MIPS (Merit-based Incentive Payment System), which will incorporate PQRS and other quality measures. More information will become available over the next few months. In the meanwhile, we need to understand the systems that are currently in place. The Value-Based Payment Modifier (VBPM) is an important measure you need to understand, especially because it will be incorporated into the new value measurement system.

Q. What is the VBPM program?

A. The VBPM program evaluates the performance of physicians on the quality and cost of care they provide to their fee-for-service Medicare beneficiaries. The VBPM is applied to both solo practitioners and groups as identified by their Taxpayer Identification Number (TIN). For each TIN subject to the VBPM, CMS uses quality and cost metrics to calculate a Value Modifier1 that adjusts the TIN’s physicians’ Medicare Physician Fee Schedule (MPFS) payments upward or downward, based on the TIN’s performance.

Suzanne L. Corcoran, COE, is executive vice president and founder of Corcoran Consulting Group (CCG), San Bernardino, CA, which specializes in coding and reimbursement issues for ophthalmic practices.

As with other CMS metrics (such as PQRS), there is a lag. For example, services provided in 2014 affect 2016 Medicare payments. For the 2014 data reporting period, the large majority of physicians did not experience any adjustment to their MPFS.2 Administrators can learn of any impact of the VBPM in confidential Quality and Resource Use Reports (QRURs).3

The program was phased in. Large physician groups (100 or more eligible professionals) became subject to the VBPM adjustments in 2015, based on 2013 data. The program was extended to groups of 10 or more eligible professionals this year, based on 2014 data. All physicians, including solo practices, are subject to VBPM in 2017, based on 2015 data.

Q. How does CMS assign Medicare beneficiaries?

A. Most Medicare beneficiaries are assigned to the TINs of primary care physicians (PCPs). PCPs are defined as family practice, internal medicine, geriatric medicine, or general practice physicians. “Primary care services” include CPT codes for evaluation and management (E/M) services rendered in-office, nursing facilities, rest homes, or the patient’s home.4 Inpatient services and emergency room services are excluded from “primary care services” and eye codes (920xx) are omitted from the defining code set.

Only if a Medicare beneficiary did not receive primary care services from a PCP is that person possibly assigned to a specialist, such as an ophthalmologist, and then only to a specialist who provided more primary care services than any other physician or health care professional in the reporting period. So, relatively few Medicare beneficiaries are assigned to TINs of ophthalmologists. You are subject to the VBPM only if your TIN is assigned applicable Medicare beneficiaries.

Q. Can we identify these beneficiaries at the time of service?

A. No. It is not feasible or practical to determine if a Medicare beneficiary has been assigned to a TIN, or which TIN, at the time of service because Medicare assigns a beneficiary to a TIN only after the end of the year.

Q. Are drugs administered by physicians included in the calculation of the VBPM?

A. Yes. All costs incurred within Part A and Part B Medicare are included in the cost reporting metrics for VBPM. This includes Part B Medicare reimbursements for all outpatient procedures and drugs used during these procedures, including drugs administered by intravitreal injection.

The impact of drug costs varies. For the majority of Medicare beneficiaries with one or more chronic diseases, medications represent a negligible part of the cost of health care in the calendar year. In the exceptional case, where a Medicare beneficiary assigned to an ophthalmic TIN has no other health-care services in the same year, the impact on cost can be significant.

Q. Are all Medicare beneficiaries included in the calculation of the VBPM?

A. No, they are not. This program applies only to regular Medicare enrollees in traditional Part B. Medicare beneficiaries who elect a Medicare Advantage plan or reside outside the United States are excluded from the calculation of the VBPM.

In addition, any Medicare beneficiaries who do not receive “primary care services” are not assigned to a TIN. This might occur if: 1) the beneficiary only receives inpatient care or emergency care; or 2) the beneficiary is not cared for by any physician or other healthcare professional. RP


1. CMS. Value-Based Payment Modifier. Available at: Accessed June 8, 2016.

2. CMS. Medicare FFS Physician Feedback Program/Value-Based Payment Modifier. Available at: Accessed June 8, 2016.

3. CMS. How to obtain a QRUR. Available at: Accessed June 8, 2016.

4. CMS. Fact Sheet: Two-step Attribution for Measures Included in the Value Modifier. August 2015. Availbloe at: Accessed June 8, 2016