E-Prescribing Incentives and Penalties

A lot of attention has been paid to the American Recovery and Reinvestment Act (ARRA) and its meaningful use requirements for electronic health record systems, leaving the requirements related to electronic prescribing (e-prescribing or eRx) lost in the shuffle. But did you know that the incentives and penalties in this area will affect your practice before ARRA? Let’s review the facts:

Q: When were the e-prescribing penalties announced?
In November 2010, the Centers for Medicare & Medicaid Services (CMS) announced that beginning in 2012, eligible professionals who are not successful electronic prescribers may be subject to a payment adjustment. Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) authorizes CMS to apply this payment adjustment whether or not the eligible professional is planning to participate in the eRx Incentive Program.

Q: Why is it important to know about MIPPA?
The eRx Incentive Program under MIPPA – given its importance based on the impending schedule of penalties – warrants a quick recap:

Year Incentives* Penalties*
2011 1%
2012 1% 1%**
2013 0.5% 1.5%**
2014 on 2%

* Percent of provider’s total Medicare Part B FFS allowable charges. (Incentives assume provider does not receive EHR incentive for that year under the ARRA.)

** See more information at: http://www.cms.gov/ERxIncentive/04_Statute_Regulations.asp

Q: Who is eligible for the eRx Incentive Program?
Eligible providers are medical doctors, nurse practitioners or physician’s assistants with prescribing authority; at least 100 encounters with the specified CPT codes; specified CPT codes must constitute at least 10% of the provider’s Medicare charges.

Q: What impact will MIPPA have on eligible providers?

  • 2012: Providers who do not successfully e-prescribe on 10 Medicare encounters between January and June 2011 will be subject to a 1% reduction in 2012 Medicare rates.
  • 2013: Providers who do not successfully e-prescribe on 25 Medicare encounters between January and December 2011 will be subject to a 1.5% reduction in 2013 Medicare rates.
  • 2011: By e-prescribing 25 times, you can also earn the 1% e-prescribing incentive in 2011.

Q: What about meaningful use?Q: Is the eRx Incentive Program separate from PQRS (formerly known as PQRI)?
Yes, it is separate from and in addition to the Physician Quality Reporting System (PQRS – formerly known as PQRI) program authorized by Division B of the Tax Relief and Health Care Act of 2006 – Medicare Improvements and Extension Act (MIEA-TRHCA) of 2006. Eligible professionals do not need to participate in PQRS to participate in the eRx Incentive Program.

Legislation does not allow providers to collect both the e-prescribing and electronic medical records incentives (as a Medicare provider) in the same year. So groups have a choice — to collect the MIPPA incentive in 2011 and start pursuing meaningful use in 2011 or forego the MIPPA incentive in 2011 and attest to meaningful use in 2011. In either case, providers must continue to comply with MIPPA requirements to avoid future penalties associated with the eRx Incentive Program.

Q: How are incentives earned?
Incentives are earned per provider, and each provider must individually meet the requirements. This means that some providers within a group practice might qualify for an incentive, while others might incur a penalty. (Group reporting options exist, but they are limited and require qualification.)

Reporting is by G-Code and there is only one: Use G-8553 on the Medicare claim to report that “at least one prescription or Rx was generated and transmitted using a qualified e-prescribing system during the patient encounter.”

Q: What is the overlap between MIPPA and the electronic health records meaningful use requirements under ARRA?
The ARRA EHR program provides incentives from 2011 to 2016 and introduces penalties beginning in 2015, while the MIPPA e-prescribing program provides incentives from 2009 to 2013 and provides for penalties from 2012 onward. Both programs require providers to use e-prescribing technology. Based on a report from the Government Accountability Office, the GAO has proposed eliminating the overlap in the reporting requirements. (For more information, visit: http://www. gao.gov/products/GAO-11-159.)

Q: What is a qualified e-prescribing system?
Surescripts® certification qualifies an e-prescribing system. (This designation is distinct from the certification required for EHR systems.)

Q: Are the Practice Partner®, Medisoft® Clinical and Lytec® MD e-prescribing modules from McKesson Surescripts-certified?
Yes. The electronic prescribing feature in McKesson’s Practice Partner, Medisoft Clinical and Lytec MD EHRs offers the highest level of Surescripts certification under the electronic prescribing categories including: prescription benefit, medication history, prescription routing, company name/eligibility, formulary reporting, retail Rx and mail-order Rx.

Q: Where can I read more about the eRx Incentive Program?
Details about the program can be found on the CMS web site: www.cms.gov/ERXincentive/.

For more information, contact our consultants. Call 800-955-0321 or click here.

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