Skip to content


BY VICTORIA HOUGHTON, ASSISTANT MANAGING EDITOR, DERMATOLOGY WORLD | As featured in the Answers in Practice column of Dermatology World, the following is an interview with Jon Ward, MD, Founder and President of Dermatology Specialists of Florida, about managing and thriving in a value-based payment system.


The value-based modifier (VBM) was created through the Affordable Care Act and assigns value-based payments to providers for Medicare services.Under MACRA it will be replaced by the resource use, or cost, category, which will not count toward a provider’s MIPS score during the first year of the program (2017, with bonuses and penalties applied in 2019).

Q: Tell me about your practice.

Dr. Ward: I am the president of an 11-physician and 13-midlevel dermatology group practice located in Florida, Alabama, and Mississippi.

Q. Tell me about your experience with the value-based modifier program.

Dr. Ward: We received an exciting notification from the Centers for Medicare and Medicaid Services (CMS) in June that we were one of 128 group practices nationwide to receive a value-based modifier [VBM] bonus. The VBM award is a 15.92 percent increase in Medicare payments. According to our Quality Resource Use Report, we achieved the bonus based on the low cost of our services. We achieved greater than one standard deviation of the mean in the cost analysis. This is the first year the VBM became available for our group’s size. In 2015, it was only for groups with more than 100 providers and this year it opened up to groups with 10 to 99 providers. There were more than 13,000 eligible groups of that size who could have received the award, placing our quality reporting in the top 1 percent nationwide. A total of 58 of the 128 groups — both primary care and various specialties — were awarded the 15.92 percent increase.

Q: How does your practice manage the administrative workload associated with reporting for this program?

Dr. Ward: We use a certified registry through our EHR vendor. This registry allows us to see how we are performing on our chosen metrics against the national benchmark. We are able to handle the administrative workflow because we spent extensive time researching the implications of the Physician Quality Reporting System (PQRS) and the VBM programs prior to 2014. As a result, we adjusted our clinical workflows to assure we implemented the necessary steps to satisfy the requirements on the measures we were reporting throughout the year. By building this into our workflow, we did not have a huge administrative burden playing “catch up.”

Q: How much time is spent on reporting for programs like the VBM?

Dr. Ward: We put a great deal of emphasis on continually educating our staff on our reporting programs. We have a small team — made up of our chief information officer, our director of practice operations, and a consultant who specializes in PQRS and meaningful use — that monitors our reporting numbers on a monthly basis and constantly provides feedback to our clinical staff on how we are doing and of any improvements that need to be made. Each month, we send our reporting numbers out to our office administrators and providers so they can see where we are throughout the year. If one of our offices is not meeting their measures, we can track that performance down to the group and individual provider.

Q: Can you describe one or two quality measures that you report on and the protocol you have in place to ensure that the practice is consistently performing at the highest level?

Dr. Ward: PQRS 138 — Melanoma: Coordination of Care — looks at the “percentage of patients, regardless of age, with a new occurrence of melanoma who have a treatment plan documented in the chart that was communicated to the physicians providing continuing care within one month of diagnosis.” This is all about workflow and proper tracking within our EHR software. We ensure that all of our treatment plans are thoroughly documented within the progress note and we have a strict policy ensuring that our treatment plans are promptly sent to the primary care physician. In order to make sure no patients fall through the cracks, we are able to track all of our melanoma patients by ICD-10 code within our EHR system to follow up and make sure that we have communicated treatment plans in a timely manner. PQRS 130 — Documentation of Current Medications in the Medical Record — looks at the “percentage of visits for patients age 18 and older for which the eligible professional attests to documenting a list of current medications in the patient’s medical record.” Again, this comes back to making sure you have the proper workflows and tracking measures in place. It is standard procedure for our clinical staff to verify all patient medications on every patient encounter. We leverage technology through our EHR system to notify a clinician at the time of service to remind them to “verify” all medications.

Q: What can you tell us about how your practice manages cost?

Dr. Ward: The cost composite is based on the cost of the physician, the medications, and any ordered ancillaries, so we have significant control over our costs and try to be mindful of the resources we use. Cost management is attained through our quality-control processes implemented through our practice’s Medical Advisory Committee which is made up of five of our physicians and one non-physician clinician. We educate all of our physicians and non-physician clinicians — in person annually and by phone quarterly — about high-cost procedures and medications and make sure we select less-expensive options when appropriate.

Q: What standards do you have in place to control costs?

Dr. Ward: Since the inception of the AAD’s Mohs Micrographic Surgery Appropriate Use Criteria (AUC), we have encouraged all of our providers to download the app and adhere firmly to the guidelines. We educate our providers on the importance of prescribing generic drugs first, and only selecting branded drugs when less-expensive options are unavailable. We also have an in-house dermatopathologist who is judicious in his use of immunohistochemistry and special stains. We disseminate information about the practices we have put in place through the physician and physician assistant email and we send out various memos.

Q: How does your practice ensure that patients receive the best possible treatment rather than the least expensive available option?

Dr. Ward: I think there are flaws in the cost and value metrics. The general idea is that by being compared to your peers, judicious use of branded drugs and biologics will be advantageous. It truly does penalize practices with higher acuity cancer surgery and complex patients with high-cost medicine, such as the psoriasis patients on biologics. Our practice manages with the best outcomes in mind, but does factor cost into the equation when selecting the best therapy. We aren’t able to truly track medication expense through our EMR, but we are able to track every provider’s charges per patient to identify potential over-utilizers of services.

Q. Even though the VBM will transition to the ‘resource use’ and ‘quality’ requirements under the new Merit-Based Incentive Payment System (MIPS) under the Medicare Access and CHIP Reauthorization (MACRA) law, what advice do you have for other practices to ensure that they are performing these cost and quality standards at the highest level?

Dr. Ward: Be proactive. A lot of practices are aware of the 4 percent penalty for noncompliance but were unaware of the potential positive financial impact with the VBM program. Invest the time to get a good understanding of the MIPS program so your practice can meet the desired measures. You have flexibility on the measures you can attest to so take the time to get familiar and decide what measures work for you. Above all, educate and train your clinical staff on proper workflows and give them insight on how meeting these measures has a positive impact on the practice but also on patient care.

Q: What advice do you have for a small or solo practice that may not have the resources available to manage the administrative workload associated with these types of requirements?

Dr. Ward: Leverage EHR technology as much as possible and consider bringing in an outside consultant to perform an analysis. While the MIPS program will start small with a 4 percent penalty, it will only increase before topping out at a 9 percent payment adjustment. The other reason to take quality measures seriously is the high likelihood that commercial payers will adopt the MIPS standards, so investing now and getting ahead of this will pay dividends in the future. By being proactive and meeting the quality of care and cost metrics, you will be able to demonstrate high quality which could help in commercial payer negotiations. These requirements can be managed and it’s important to remember that there’s more than just a stick to these programs. There’s a carrot for you if you do it right.