Value-Based Payment Modifier - American Society of Anesthesiologists (ASA)

The Value-Based Modifier Program (VM) is a budget neutral payment modifier based on relative quality and cost of care. Medicare adjusts physician payments using quality data from the Physician Quality Reporting System (PQRS) and cost data from Medicare claims for fee-for-service patients. This is a pay for value (i.e., quality relative to cost) program — higher value gets higher pay; lower value gets lower pay.

Payments based upon the VM will not apply after CY 2018. Instead, the VM has been transitioned into the Merit-based Incentive Payment System (MIPS) Cost Component

Who will be subject to the VM?

In CY 2018, Medicare will apply the value modifier to physicians, physician assistants (PAs), nurse practitioners (NPs), clinical nurse specialists (CNSs), and certified registered nurse anesthetists (CRNAs) in groups with 2+ EPs and those who are solo practitioners, as identified by their Tax Identification Number (TIN). For a detailed timeline of VM implementation, please visit the CMS Value-Based Payment Modifier Timeline page.

How is the VM calculated?

The VM is calculated for a group (identified by their TIN) using a quality composite score and a cost composite score. The quality composite scores are derived from six quality domain scores; each domain score is based on performance scores for PQRS measures reported, using its associated domain. Quality-tiering will determine if group performance is statistically better, the same, or worse than the national mean, based on standard deviation calculations.

How are VM payment adjustments determined? 

Groups and solo practitioners will be designated under one of the following two categories for the purposes of determining payment adjustments under the VM in 2018. 

  • Category 1: Includes all solo practitioners who satisfactorily report PQRS quality measures as individuals and those in group practices that meet the criteria via GPRO for the purpose of avoiding the 2018 PQRS payment adjustment during the 2016 reporting year.
    • Groups that do not self-nominate through GPRO under PQRS but have at least 50 percent of EPs who meet the criteria for satisfactory reporting for PQRS as individuals will be included in Category 1. 
    • Groups and EPs participating in a Medicare Shared Saving Program (MSSP) ACO that successfully reports quality measures data will be part of Category 1
  • Category 2: Includes all groups and solo practitioners that do not fall under Category 1 and are subject to an automatic 2018 VM penalty (Failure to meet PQRS 2016 criteria). 
    • Groups and EPs participating in an MSSP-ACO that does not successfully report quality measures data will be part of Category 2. 

How does PQRS participation impact my VM?

The VM relies on PQRS participation for the purpose of determining quality performance. In 2018, the quality score under the VM will be based on 2016 PQRS reporting, as well as CMS-calculated outcomes measures related to hospital readmissions and hospital admissions for certain chronic and acute conditions.

For the 2018 payment year, CMS eased downward adjustments in the value-based payment modifier (VM):

  • Individuals and practices that satisfactorily participated in PQRS are assessed under "Category 1" and will be assessed under quality-tiering. Category 1 groups and individuals are exempt from any negative 2018 VM payment adjustment. 
  • Groups of 10 or more EPs who failed to meet PQRS reporting requirements ("Category 2"): CMS has reduced the automatic downward VM payment adjustment for those practices from negative four percent to negative two percent (-2.0 percent).
  • Groups of 2-9 EPs and solo practitioners who failed to meet PQRS reporting requirements ("Category 2"): CMS has reduced the automatic downward VM payment adjustmentfrom negative two percent to negative one percent (-1.0 percent).

What is quality-tiering?

The quality-tiering methodology is used to determine whether a group or solo practitioner in Category 1 will receive an upward or neutral VM payment adjustment in 2018, based on 2016 reporting data. As in previous years of the VM, under the quality-tiering methodology, each group and solo practitioner’s quality and cost composites will continue to be classified into high, average, and low categories depending upon whether the composites are at least one standard deviation above or below the mean and statistically different from the mean.

For the 2018 payment year, the following quality-tiering methodology will be considered in determining the VM payment adjustment. An * in the charts below indicate an upward VM payment adjustment factor. VM is a budget neutral program so the positive adjustments are based on the practices who were penalized for not participating in or not satisfactorily meeting criteria for PQRS.

CY 2018 VM Amounts Under the Quality-Tiering Approach for Physicians, PAs, NPs, CNSs, and CRNAs Who Are in Groups or Solo Practitioners



Low Quality

Average Quality

High Quality

Low Cost




Average Cost




High Cost





Where can groups (identified by their Tax Identification Number or "TIN") find their 2016 VM and Quality and Cost Composite Scores? 

The quality and cost data used to calculate the 2018 Value Modifier will be contained in the 2016 Annual Quality and Resource Use Reports (QRURs). The Annual QRURs show how payments to physicians in the TIN will be affected by the Value Modifier in 2018, including any upward, neutral, or downward payment adjustment. Educational documents on the QRURs are available on the QRUR website.

Who should I contact for VM questions?

For questions regarding the VM Program, please contact the Physician Value Help Desk:
Monday – Friday: 8 a.m. – 8 p.m. EST
Phone: 1 (888) 734-6433, press option 3; (TTY 1-888-734-6563)

For information on the Value-Based Payment Modifier, please contact the ASA Department of Quality and Regulatory Affairs at (202) 289-2222 or

Thank You Industry Supporters

Whose contributions allow the American Society of Anesthesiologists® to create world-class education and resources to improve patient care and outcomes.

Learn More