CMS ANNOUNCES PROPOSED RULE FOR THE ELECTRONIC PRESCRIBING (ERX) INCENTIVE PROGRAM

For Immediate Release: Thursday, May 26, 2011
Contact: CMS Office of Public Affairs
202-690-6145

Overview

The Centers for Medicare & Medicaid Services (CMS) today proposed changes to the Medicare Electronic Prescribing (eRx) Incentive Program. 

Background

Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) amended the Social Security Act to require the Secretary to establish a new reporting program that offers a combination of financial incentives and payment adjustments to eligible professionals to encourage electronic prescribing.  Section 1848(m)(3)(B) of the Social Security Act (the Act), as added and amended by MIPPA, sets forth the requirements for being a successful electronic prescriber.

Although the Electronic Prescribing Incentive Program has similarities in structure and processes to the Physician Quality Reporting System (formerly the Physician Quality Reporting Initiative or PQRI), the Electronic Prescribing Incentive Program is a standalone program with distinct reporting requirements and associated incentive payments and payment adjustments. 

Under the eRx Incentive Program, eligible professionals who are successful electronic prescribers can receive a 1-percent incentive payment for program years 2011 and 2012, and 0.5 percent for 2013. In addition to incentive payments, MIPPA requires a Medicare Physician Fee Schedule (PFS) payment adjustment, beginning in 2012, for eligible professionals who are not successful electronic prescribers. For the 2012 electronic prescribing payment adjustment, the fee schedule amount for covered professional services furnished by such professionals during the year shall be 1.0 percent less than the PFS amount that would otherwise apply.  The PFS reductions for eligible professionals who are not successful electronic prescribers in the future are as follows: 1.5 percent for 2013 and 2.0 percent for 2014. 

Provisions of the 2012 eRx Payment Adjustment Established in the 2011 MPFS Final Rule

In addition to setting forth the requirements for reporting the electronic prescribing quality measure for the 2011 eRx incentive, the calendar year (CY) 2011 Medicare Physician Fee Schedule (PFS) Final Rule, published in the Federal Register on November 29, 2010, established the program requirements for reporting the electronic prescribing quality measure for the 2012 eRx payment adjustment. 

For individual eligible professionals, the 2012 eRx payment adjustment is not applicable if one of the following applies: 

-          The eligible professional is not a physician (MD, DO, or podiatrist), physician assistant, certified registered nurse anesthetist, or certified nurse midwife as of June 30, 2011.  This determination is based on the primary taxonomy code in the National Plan and Provider Enumeration System (NPPES);

-          The eligible professional does not have prescribing privileges and reports g-code G8644 (defined as not having prescribing privileges) at least one time on an eligible claim prior to June 30, 2011;

-          The eligible professional does not have at least 100 cases containing an encounter code in the electronic prescribing measure's denominator;

-          The eligible professional's total 2011 Medicare Part B PFS allowed charges for all such covered professional services submitted for the electronic prescribing measure's denominator codes are less than 10 percent;

-          The eligible professional reports a significant hardship code and CMS determines that the hardship code applies (see "Significant Hardship Exemptions" section below); OR

-          The eligible professional is a successful electronic prescriber by reporting the electronic prescribing measure via claims for at least 10 unique electronic prescribing events for patients in the denominator of the measure between January 1, 2011 and June 30, 2011.

For a group practice participating in the eRx group practice reporting option (GPRO), the 2012 eRx payment adjustment is not applicable if: 

-          The group practice reports a significant hardship code in the group practice's 2011 self-nomination letter for participation in the Physician Quality Reporting System and the eRx Incentive Program as a group practice (see "Significant Hardship Exemptions" section below) and CMS determines that the hardship exemption applies; OR

-          The group practice is a successful electronic prescriber. Depending on the group practice's size, the group practice is a successful electronic prescriber if the group practice reports the electronic prescribing measure via claims for at least 75-2,500 unique electronic prescribing events for patients in the denominator of the measure between January 1, 2011 and June 30, 2011.

Significant Hardship Exemption Categories.  Section 1848(a)(5)(B) of the Act provides that the Secretary may, on a case-by-case basis, exempt an eligible professional from the application of the payment adjustment, if the Secretary determines, subject to annual renewal, that compliance with the requirement for being a successful electronic prescriber would result in a significant hardship. In the CY 2011 PFS Final Rule, CMS established the following two significant hardship exemption categories in the form of g-codes for the 2012 eRx payment adjustment: 

-          The eligible professional practices in a rural area without sufficient high speed internet access (report code G8642);

-          The eligible professional practices in an area without sufficient available pharmacies for electronic prescribing (report code G8643). 

In order to request a significant hardship exemption from the 2012 eRx payment adjustment via one of the two significant hardship g-codes mentioned above, the eligible professional or group practice must report the g-code at least one time on a claim between January 1, 2011 and June 30, 2011. 

Proposed Changes to the Medicare eRx Incentive Program

Since publication of the CY 2011 PFS Final Rule, CMS has received requests to better align the eRx Incentive Program with the Medicare and Medicaid EHR Incentive Programs, as well as suggestions that we expand the significant hardship exemption categories.  To address these concerns, the proposed rule announced today would do the following:

Modify the existing 2011 electronic prescribing measure to address the technological requirements of the Medicare eRx Incentive Program: The description statement of the existing 2011 electronic prescribing measure (the electronic prescribing quality measure used for certain reporting periods in 2011) would be revised to also recognize as certified electronic health record (EHR) technology as defined at 45 CFR 170.102 as a "qualified" eRx prescribing system. This proposed change to the 2011 electronic prescribing measure provides eligible professionals and groups participating in the eRx Incentive Program with the option of adopting either a qualified eRx system or certified EHR technology. 

Provide additional significant hardship exemption categories for the 2012 e-Rx payment adjustment: The eligible professional or group practice would need to, in its significant hardship exemption request, demonstrate that one of these situations applies to the respective practice: 

-          Eligible professionals who register to participate in the Medicare EHR Incentive Program or the Medicaid EHR Incentive Program and adopt certified EHR technology;

-          Inability to electronically prescribe due to local, state, or federal law;

-          Limited prescribing activity; or

-          Insufficient opportunities to report the electronic prescribing measure due to limitations of the measure's denominator. 

Extend the deadline to request a significant hardship exemption for the two hardship exemption categories finalized in the CY 2011 MPFS final rule to October 1, 2011. This deadline would apply to the two significant hardship exemption categories established in the CY 2011 MPFS Final Rule, as well as to the proposed additional significant hardship exemption categories. 

Allow submission of significant hardship exemption requests for the 2012 eRx payment adjustment via a web-based tool (if CMS is able to develop such a tool) or a mailed letter. 

CMS' proposed rule may be viewed at: http://www.ofr.gov/OFRUpload/OFRData/2011-13463_PI.pdf  

A news release sheet on the proposed rule may be viewed here: http://www.cms.hhs.gov/apps/media/press_releases.asp 

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