E-Prescribing Penalty Could Hit Up to 109,000 Clinicians

Robert Lowes

May 31, 2011 — The Centers for Medicare and Medicaid Services (CMS) is proposing more exemptions to an electronic prescribing requirement that could penalize as many as 109,000 physicians, nurse practitioners, and other prescribers who do not adopt the technology.

The penalty is the flip side of a Medicare program created in 2008 that gives clinicians a bonus if they transmit prescriptions electronically to pharmacies, using approved software. The bonus is 1% in 2011 and 2012 and 0.5% in 2013; it disappears the following year. Meanwhile, clinicians who do not report at least 10 electronic prescriptions on Medicare claims during the first 6 months of 2011 will experience a 1% pay cut in 2012 that grows to 1.5% in 2013 and 2% in 2014 with continued noncompliance.

Not every clinician who treats Medicare patients is eligible to earn the bonus or liable to incur the penalty. For someone to warrant either, his or her e-prescriptions must come during the course of 55 particular medical services (mostly various types of "evaluation and management" services) that are listed by Medicare billing codes. These codes must account for at least 10% of the clinician's Medicare allowed charges. In addition, some clinicians cannot participate because of special billing arrangements they have with the program.

The 2012 penalty will not apply under current regulations to clinicians who:

• lack at least 100 claims involving the 55 billing codes through the first half of 2011,
• lack prescribing privileges, or
• were not licensed practitioners as of June 30, 2011.

In a proposed set of regulations released May 26, CMS estimates that roughly 209,000 clinicians could be subject to the 2012 penalty unless they become successful e-prescribers or qualify for hardship exemptions. Right now, there are only 2 kinds of exemption: if a clinician practices in a rural area without sufficient high-speed Internet access, or if local pharmacies do not receive electronic prescriptions. Because roughly 100,000 clinicians now participate in the e-prescribing incentive program, CMS estimates that as many as 109,000 clinicians could potentially request a hardship exemption to avoid a penalty in 2012.

Harmonizing 2 Incentive Programs

The proposed regulations set forth a number of new hardship exemptions in response to complaints from organized medicine, which views the current rules for the incentive program as confusing and cumbersome.

One of those new exemptions attempts to harmonize the e-prescribing incentive program with its counterpart under Medicare and Medicaid for electronic health records (EHRs), which makes e-prescribing a condition for earning a 6-figure bonus. CMS noted that medical practices may have delayed adopting e-prescribing technology because they intended to participate in the EHR incentive program, which began this year. As a result, a practice that planned to demonstrate "meaningful use" of an EHR during a 90-day period in the second half of 2011 would fail to meet the e-prescribing requirement for the first half of 2011. Accordingly, CMS is proposing to grant an e-prescribing exemption to clinicians who register for the EHR incentive program and adopt certified EHR technology.

Other new hardship exemptions would apply to:

• Clinicians who practice in areas where local, state, or federal laws or regulations impede e-prescribing. A state, for example, may limit or prohibit the electronic transmission of a script through a third-party network, and some clinicians order a large volume of narcotics, which may not be e-prescribed in some states, CMS notes.
• Clinicians who are eligible to write prescriptions but do so infrequently or not at all.
• Clinicians who normally do not write prescriptions for the kind of visits covered by the 55 billing codes. A surgeon, for example, may e-prescribe for his or her patients, but not necessarily in connection with evaluation and management services, which make up most of the pertinent codes.

The proposed rule would extend the deadline for requesting a hardship exemption from next year's e-prescribing penalty from June 1, 2011, to October 1, 2011.

In addition, CMS wants to harmonize the EHR and e-prescribing incentive programs on a technological basis. Under current regulations, e-prescribers must use software programs that CMS deems "qualified."

Under the proposed rule, a clinician could earn an e-prescribing bonus with an EHR system that has been certified by any number of federally appointed vetting organizations.

CMS will be accepting public comments on its proposals, which are to be published in the Federal Register, through July 25, 2011. The draft regulations explain several ways to submit comments.

More information on the e-prescribing incentive program, and how to apply for an exemption, is available at the CMS Web site.