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PQRS & Value-Based Payment

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PQRS and VBPM Guide for Hospitalists

Report Measures in PQRSwizard

(Under the PQRS Tab)

The Centers for Medicare and Medicaid Services (CMS) is pursuing a pay-for-performance agenda for physicians that aligns quality measures from the Physician Quality Reporting System (PQRS) with cost and efficiency measures to create the Value-Based Payment Modifier (VBPM). PQRS is a pay-for-reporting program, where successful reporting of quality measures will prevent the penalty. The VBPM is a pay-for-performance program, using PQRS quality measures and CMS-calculated cost measures to create a positive or negative payment adjustment based on performance. Together, these programs are designed to begin reimbursing for the value, not simply quantity, of services provided through Medicare.


Although CMS has aligned reporting in the programs, PQRS and the VBPM both have separate penalties because they were created separately. Providers who do not successfully meet the reporting requirements for PQRS will be assigned the full PQRS and value-based payment modifier penalties.

PQRS and VBPM Penalties in 2018 Based on 2016 Reporting
Group Size PQRS Non-Reporting Penalty Potential VM Penalty Total Potential Penalty
10+ EPs



Solo, 2-9 EPs -2.0% -2.0% -4.0%

What Can You Do?

  • Make sure you are participating in PQRS. Check whether or not you are reporting on quality measures to avoid the yearly penalties.
  • Stay informed. PQRS and the VBPM is updated and refined each year through the federal rulemaking process.
  • Share experiences. Input shared will help inform the SHM’s position and frame its comments provided to CMS. Join discussions around quality reporting and the VBPM in the Advocacy and Public Policy Community of SHM’s Hospital Medicine Exchange (HMX).

What is the Society of Hospital Medicine (SHM) Doing?

  • Providing feedback to CMS as part of the normal rulemaking process for the Physician Fee Schedule.
  • SHM’s Performance Measurement and Reporting Committee (PMRC) is dedicated to engaging quality measurement and working to ensure measures make sense for hospitalist quality improvement.