1. (a) The value-based payment modifier amount for a group and a solo practitioner subject to the value-based payment modifier is based upon a comparison of the composite of quality of care measures and a composite of cost measures.

2. (b) Quality composite and cost composite are classified into high, average, and low categories based on whether the composites are statistically above, not different from, or below the mean composite scores.

   1. (1) Quality composites that are one or more standard deviations above the mean are classified into the high category. Quality composites that are one or more standard deviations below the mean are classified into the low category.
   2. (2) Cost composites that are one or more standard deviations below the mean are classified into the low category. Cost composites that are one or more standard deviations above the mean are classified into the high category.

3. (c)

   1. (1) The following value-based payment modifier percentages apply to the CY 2015 payment adjustment period:

      CY 2015 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach

      Quality/cost	Low cost	Average cost	High cost(percent)
      High quality	+ 2.0x*	+ 1.0x*	+ 0.0
      Average quality	+ 1.0x*	+ 0.0%	-0.5
      Low quality	+ 0.0%	-0.5%	-1.0
      * Groups of physicians eligible for an additional + 1.0x if (1) reporting Physician Quality Reporting System quality measures through the GPRO web-interface or CMS-qualified registry, and (2) average beneficiary risk score is in the top 25 percent of all beneficiary risk scores.

   2. (2) The following value-based payment modifier percentages apply to the CY 2016 payment adjustment period:

      CY 2016 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach

      Quality/cost	Low cost	Average cost	High cost(percent)
      High quality	+ 2.0x*	+ 1.0x*	+ 0.0
      Average quality	+ 1.0x*	+ 0.0%	-1.0
      Low quality	+ 0.0%	-1.0%	-2.0
      * Groups of physicians eligible for an additional + 1.0x if reporting Physician Quality Reporting System quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores.

   3. (3) The following value-based payment modifier percentages apply to the CY 2017 payment adjustment period:

      1. (i) For groups with 10 or more eligible professionals:

         CY 2017 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Groups With 10 or More Eligible Professionals

         Cost/quality	Low quality	Average quality	High quality
         Low Cost	+ 0.0%	* + 2.0x	* + 4.0x
         Average Cost	−2.0%	+ 0.0%	* + 2.0x
         High Cost	−4.0%	−2.0%	+ 0.0%
         * Groups eligible for an additional + 1.0x if reporting Physician Quality Reporting System quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores, where `x' represents the upward payment adjustment factor.

      2. (ii) For groups with two to nine eligible professionals and solo practitioners:

         CY 2017 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Groups With Two to Nine Eligible Professionals and Solo Practitioners

         Cost/quality	Low quality	Average quality	High quality
         Low Cost	+ 0.0%	* + 1.0x	* + 2.0x
         Average Cost	+ 0.0%	+ 0.0%	* + 1.0x
         High Cost	+ 0.0%	+ 0.0%	+ 0.0%
         * Groups and solo practitioners eligible for an additional + 1.0x if reporting Physician Quality Reporting System quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores, where `x' represents the upward payment adjustment factor.

   4. (4) The following value-based payment modifier percentages apply to the CY 2018 payment adjustment period, for physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists who are solo practitioners or who are in groups of any size:

      CY 2018 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Physicians, Physician Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists

      Cost/quality	Low quality	Averagequality	High quality
      Low Cost	+0.0%	* +1.0x	* +2.0x
      Average Cost	+0.0%	+0.0%	* +1.0x
      High Cost	+0.0%	+0.0%	+0.0%
      * Eligible for an additional +1.0x if reporting Physician Quality Reporting System quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores, where `x' represents the upward payment adjustment factor.

4. (d)

   1. (1) Groups of physicians subject to the value-based payment modifier that have an attributed beneficiary population with an average risk score in the top 25 percent of the risk scores of beneficiaries nationwide and for the CY 2015 payment adjustment period elect the quality-tiering approach or for the CY 2016 payment adjustment period are subject to the quality-tiering approach, receive a greater upward payment adjustment as follows:

      1. (i) Classified as high quality/low cost receive an upward adjustment of + 3x (rather than + 2x); and
      2. (ii) Classified as either high quality/average cost or average quality/low cost receive an upward adjustment of + 2x (rather than + 1x).

   2. (2) Groups and solo practitioners subject to the value-based payment modifier that have an attributed beneficiary population with an average risk score in the top 25 percent of the risk scores of beneficiaries nationwide and for the CY 2017 payment adjustment period are subject to the quality-tiering approach, receive a greater upward payment adjustment as follows:

      1. (i) Classified as high quality/low cost receive an upward adjustment of + 5x (rather than + 4x) if the group has 10 or more eligible professionals or + 3x (rather than + 2x) if a solo practitioner or the group has two to nine eligible professionals; and
      2. (ii) Classified as either high quality/average cost or average quality/low cost receive an upward adjustment of + 3x (rather than + 2x) if the group has 10 or more eligible professionals or + 2x (rather than + 1x) if a solo practitioner or the group has two to nine eligible professionals.

   3. (3) Groups and solo practitioners subject to the value-based payment modifier that have an attributed beneficiary population with an average risk score in the top 25 percent of the risk scores of beneficiaries nationwide and for the CY 2018 payment adjustment period are subject to the quality-tiering approach, receive a greater upward payment adjustment as follows:

      1. (i) Classified as high quality/low cost receive an upward adjustment of +3x (rather than +2x); and
      2. (ii) Classified as either high quality/average cost or average quality/low cost receive an upward adjustment of +2x (rather than +1x).

[77 FR 69368, Nov. 16, 2012, as amended at 78 FR 74822, Dec. 10, 2013; 79 FR 68008, Nov. 13, 2014; 80 FR 71385, Nov. 16, 2015; 82 FR 53363, Nov. 15, 2017]