E-Prescribing Incentive Program: Either Play . . . or Pay
By: Justin Vaughn, CPC, M.Div
Director of Compliance
12/16/2010

In my last alert concerning the e-prescribing incentive program, I stated that among the stipulations found in the proposed rule for 2011 was a possible penalty for those prescribing providers who do not successfully participate in the program.  Based on a review of the recently released final rule, it is clear that a financial penalty will indeed be assessed in 2012 and 2013 against providers who are not “successful” prescribers in 2011.

The Centers for Medicare & Medicaid Services (CMS) is requiring providers with “prescribing authority” to report via the normal claims process at least 10 eligible e-prescribing encounters from Jan 1 through June 30, 2011.  Failure to do so will mean a 1% reduction in a provider’s overall Medicare reimbursement in 2012.  To avoid an even higher penalty in 2013 (1.5% reduction in Medicare reimbursement), the provider must successfully report 25 e-prescribing encounters from January 1 to December 31, 2011.  Therefore, you will have 6 months to obtain and successfully use (for at least 10 patient encounters) an e-prescribing system to avoid the 2012 penalty; and you will have a year to successfully report e-prescriptions (for 25 patient encounters) to avoid the 2013 penalty.

Though healthcare-related societies have issued strong opposition to the penalty mandates found in the final rule, CMS seems to be set on this carrot-and-stick approach.  If you successfully report in 2011, a 1% bonus will be added to your total Medicare reimbursement; if you do not, your reimbursement will be reduced.  With this in mind, providers who issue prescriptions as part of their patient care should move with urgency to determine if participation in the e-prescribing program is right for them.  Those wishing to learn more about the e-prescribing incentive (and penalty) program, should download the “Electronic Prescribing Measure,” which can be accessed by visiting: http://www.cms.gov/ERxIncentive/06_E-Prescribing_Measure.asp#TopOfPage.

While there are limited circumstances that may exempt certain providers from the penalties discussed above, it is my belief that those “safe harbors” will not apply to most of our clients.  We will continue to keep you updated regarding any changes CMS may elect to seek in the current structure of this program.

The information presented herein reflects general information that is current as of the date it was first published.  In light of changes that may occur in the health care regulatory and compliance environments, the author's presentation of this information might become outdated.  Please check with your individual legal and/or compliance advisor(s) prior to taking any significant actions based upon the information and advice presented.