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The program was part of Medicare’s efforts to improve the quality and efficiency of medical care, and to develop and apply a value-based payment modifier (VM) as directed under the Affordable Care Act to all physicians’ Medicare fee-for-service reimbursements by 2017. The VM paid physicians differentially based on a composite measure of the quality and cost of care furnished to Medicare beneficiaries.

To support CMS’s efforts to enhance the value of health care services provided to Medicare beneficiaries, Mathematica worked with Northrop Grumman to accomplish the following:(1) Provide technical support to CMS in the development and implementation of a VM, (2) Conduct research analyses on topics such as risk-adjustment and the application of attribution and benchmarking rules, (3) Support performance measure development and endorsement activities, (4) Respond to inquiries from recipients of reports. Mathematica has also assisted CMS with phasing in the design, development, production, and dissemination of physician feedback reports, known as quality and resource use reports (QRURs). We have also assisted CMS with scaling up report dissemination and increasing the number of provider performance measures included in the reports, such as per capita and episode costs, Physician Quality Reporting System and claims-based quality, and other quality measures. We have conducted extensive formative field research with physicians for the QRURs initially distributed to a few hundred physicians. In 2017, the final year of the VM, we produced and disseminated 271,805 QRURs and computed value-based payment adjustments for physicians in 207,151 medical groups and solo practices.  The Merit-based Incentive Payment System (MIPS) under the Quality Payment Program is replacing the Value Modifier. The first MIPS performance period is January through December 2017.