An analysis published in the Annals of Internal Medicine determined that the Value-Based Payment Modifier program is not associated with differences in performance between practices serving higher-risk and lower-risk patients.

Using a regression discontinuity analysis, Eric T. Roberts, PhD, of the Department of Health Policy and Management, University of Pittsburgh Graduate School of Public Health, and colleagues analyzed a sample of Medicare beneficiaries who were enrolled in practices subject to the Value-Based Payment Modifier program.

Medicare claims from 2014 were used to estimate differences in practice performance associated with exposure of practices with 100 or more clinicians to full incentives, which included bonuses and penalties, and exposure of practices with 10 or more clinicians to partial incentives, which included bonuses only. The investigators repeated the analyses with 2015 claims.

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The authors examined the 3 annual measures of quality and spending that the Centers for Medicare & Medicaid Services assess, including admissions for ambulatory care-sensitive conditions (ACSCs), total Medicare Part A and Part B spending per beneficiary, and all-cause readmissions within 30 days of hospital discharge.  

After adjusting for patient characteristics and the linear relationship with practice size, differences in hospitalization for ACSCs, readmission, Medicare spending, and mortality between practices above the size thresholds and those below were not statistically significant in 2014. Nor did analyses of the threshold of 100 or more clinicians find any statistically significant discontinuities in 2015 data.

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The findings of the analysis suggest that pay-for-performance programs with weak incentives and inadequate risk adjustment could contribute to increasing healthcare disparities without improving care. The authors found that adjusting for additional patient characteristics narrowed performance differences between practices that served more patients with medically complex conditions and lower income and those that served fewer of these patients. However, practices with more patients who were sick or socioeconomically disadvantaged had higher rates of hospitalization for ACSCs, Medicare spending, and mortality. Therefore, penalties for more adverse outcomes may provide incentives for practices to avoid sicker or poorer patients.

The authors suggest that to mitigate this problem, a portion of payments to practices in the Merit-based Incentive Payment System might involve a monthly per-patient payment, such as a care management fee, that is increased for higher-risk patients and does not depend on practice performance.


Roberts ET, Zaslavsky AM, McWilliams JM. The value-based payment modifier: Program outcomes and implications for disparities [published online November 28, 2017]. Ann Intern Med. doi:10.7326/M17-1740