The GAO has examined how private-sector efforts to adjust physician payments to reflect quality and efficiency could be applied successfully to the Medicare program. As previously reported, CMS developing a physician value-based payment modifier (Value Modifier), which was mandated by the ACA as a way to reward physicians for providing higher quality and more efficient care. The Medicare Value Modifier is being phased in from 2015 to 2017, with 2013 serving as the initial performance period for the 2015 Value Modifier. Under the final 2013 Medicare physician fee schedule rule, the Value Modifier initially will apply to all groups of physician with 100 or more eligible professionals. These groups will be able to choose two payment calculation options: (1) Value Modifier based strictly on participation in the Physician Quality Reporting System, or (2) Value Modifier based on quality tiering, with payments based on quality and costs. Based on a review of successful private-sector practices, the GAO recommends that CMS: consider rewarding physicians for performance improvement in addition to meeting absolute benchmarks; make more timely Medicare payment adjustments to enhance the significance of the incentive to physicians; and develop a strategy to reliably measure the performance of solo or small group practices. HHS concurred with the recommendations.