Association of Practice-Level Social and Medical Risk With Performance in the Medicare Physician Value-Based Payment Modifier Program.

Importance: Medicare recently launched the Physician Value-Based Payment Modifier (PVBM) Program, a mandatory pay-for-performance program for physician practices. Little is known about performance by practices that serve socially or medically high-risk patients.

Objective: To compare performance in the PVBM Program by practice characteristics.

Design, Setting, and Participants: Cross-sectional observational study using PVBM Program data for payments made in 2015 based on performance of large US physician practices caring for fee-for-service Medicare beneficiaries in 2013.

Exposures: High social risk (defined as practices in the top quartile of proportion of patients dually eligible for Medicare and Medicaid) and high medical risk (defined as practices in the top quartile of mean Hierarchical Condition Category risk score among fee-for-service beneficiaries).

Main Outcomes and Measures: Quality and cost z scores based on a composite of individual measures. Higher z scores reflect better performance on quality; lower scores, better performance on costs.

Results: Among 899 physician practices with 5 189 880 beneficiaries, 547 practices were categorized as low risk (neither high social nor high medical risk) (mean, 7909 beneficiaries; mean, 320 clinicians), 128 were high medical risk only (mean, 3675 beneficiaries; mean, 370 clinicians), 102 were high social risk only (mean, 1635 beneficiaries; mean, 284 clinicians), and 122 were high medical and social risk (mean, 1858 beneficiaries; mean, 269 clinicians). Practices categorized as low risk performed the best on the composite quality score (z score, 0.18 [95% CI, 0.09 to 0.28]) compared with each of the practices categorized as high risk (high medical risk only: z score, -0.55 [95% CI, -0.77 to -0.32]; high social risk only: z score, -0.86 [95% CI, -1.17 to -0.54]; and high medical and social risk: -0.78 [95% CI, -1.04 to -0.51]) (P < .001 across groups). Practices categorized as high social risk only performed the best on the composite cost score (z score, -0.52 [95% CI, -0.71 to -0.33]), low risk had the next best cost score (z score, -0.18 [95% CI, -0.25 to -0.10]), then high medical and social risk (z score, 0.40 [95% CI, 0.23 to 0.57]), and then high medical risk only (z score, 0.82 [95% CI, 0.65 to 0.99]) (P < .001 across groups). Total per capita costs were $9506 for practices categorized as low risk, $13 683 for high medical risk only, $8214 for high social risk only, and $11 692 for high medical and social risk. These patterns were associated with fewer bonuses and more penalties for high-risk practices.

Conclusions and Relevance: During the first year of the Medicare Physician Value-Based Payment Modifier Program, physician practices that served more socially high-risk patients had lower quality and lower costs, and practices that served more medically high-risk patients had lower quality and higher costs.