CMS Releases Final Rule Modifying eRx Incentive Program

The Centers for Medicare and Medicaid Services (“CMS”) released a final rule modifying the Medicare Electronic Prescribing Incentive Program (“eRx Program”) on August 31, 2011.  The eRx Program provides an incentive to “Eligible Professionals” who adopt e-prescribing technology beginning in 2009 and a payment adjustment (or penalty) for late adopters beginning in 2012.  The 2012 payment adjustment is based on January 1, 2011 – June 30, 2011 claims.  The recent amendments to the eRx Program rules attempt to harmonize the eRx Program with the EHR Incentive Program, extend the period through which Eligible Professionals can register for a hardship exception for the 2012 calendar year to November 1, 2011, and provide Eligible Professionals who have registered under the EHR Incentive Program (meaningful use) with a hardship exception to the eRx Program payment adjustment.

Eligible Provider

An “Eligible Professional” is an individual that meets the definition set forth on the CMS website at https://www.cms.gov/erxincentive/.  Generally these are physicians and other health care providers that bill directly under the Medicare program.  The eRx Program also allows registration and reporting of Eligible Professionals on a group practice basis.

Incentive and Payment Adjustment

The eRx Program creates a two percent (2%) margin between Eligible Professionals who adopt e-prescribing technology and those who have not.  The incentive payment is paid following completion of the applicable measurement year.  The payment adjustment is applied to claims filed in the calendar year following the measurement period.  The eRx Program incentive payment is not available to Eligible Professionals that have registered under the EHR Incentive Program.  However the eRx Program payment adjustment does apply to individuals without regard to their participation in the EHR Incentive Program.

The incentive amounts and payment adjustments are set forth in the chart below:

Year	Incentive	Payment Adjustment (Penalty)
2009	2.0
2010	2.0
2011	1.0
2012	1.0	1.0
2013	0.5	1.5
2014		2.0

Reporting

Eligible Professionals may begin reporting the eRx measures at any time throughout the 2011 program year of January 1 – December 31, 2011 to be eligible for the 2011 incentive, but Eligible Professionals must do so prior to June 30, 2011 to be exempt from the 2012 eRx payment adjustment.  The eRx Program measures adoption of e-prescribing technology through an analysis of claims submitted by Eligible Professionals.  The scope of the analysis covers a limited set of CPT codes that generally represent psychological evaluations, general ophthalmology, assessments, office or outpatient visits and office consultation.1  These CPT codes, referred to as “Denominator Codes,” are the only claims subject to the e-prescribing analysis.

To be a successful electronic prescriber and be eligible to receive an eRx incentive payment, the Eligible Professional must generate and report one or more electronic prescriptions associated with a patient visit, a minimum of 25 unique visits per year.  To avoid the 2012 eRx payment adjustment, the Eligible Professional must report on a minimum of 10 unique visits via claims from January 1, 2011 through June 30, 2011.  Each visit must be accompanied by the eRx G-code attesting that during the patient visit at least one prescription was electronically prescribed. Electronically generated refills do not count and faxes do not qualify as an electronic prescription.  New prescriptions not associated with a code in the denominator of the measure specification are not accepted as an eligible patient visit and do not count towards the minimum unique eRx events.

Avoiding the Payment Adjustment (Penalty)

In order to avoid payment adjustment, an eligible professional must: 1) complete the claims based reporting requirement during the initial six-month period in the year prior to the applicable payment adjustment year (January – June 2011 for 2012 payment year); 2) apply for and receive a hardship exception; or 3) fall within one of the following exclusions based on patient base/prescribing practices:

• 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;

• less than 10% of an Eligible Professional’s (or group practice’s) allowed charges for the January 1, 2011 through June 30, 2011 reporting period are comprised of Denominator Codes; or

• the Eligible Professional has less than 100 cases containing an encounter code falling within the Denominator Codes for the same January 1, 2011 through June 30, 2011 reporting period.

CMS can also provide hardship exceptions to Eligible Professionals on a case by case basis.  Due to delays in the promulgation of various regulations, the time period for requesting hardship exceptions for the 2012 payment adjustment has been extended through November 1, 2012.  Hardship exceptions are available for the 2012 payment adjustment in the following circumstances:

• The practice is located in a rural area without high speed internet access.

• The practice is located in an area without sufficient available pharmacies for electronic prescribing.

• Registration to participate in the Medicare or Medicaid EHR Incentive Program and adoption of Certified EHR Technology by no later than October 1, 2011.

• Inability to electronically prescribe due to local, state or federal law or regulation.

• Limited prescribing activity.

• Insufficient opportunities to report the eRx measure due to limitations of the measure’s denominator (e.g., surgeons, neuro-ophthamologists, orthopedic doctors and radio oncologists).

Should you have questions, please contact Michael T. Batt at 317.977.1417 or mbatt@hallrender.com or your regular Hall Render attorney.

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