Physician’s E-Prescribing Deadline June 30, 2012 – Medicare 1.5% Payment Reduction if Not Successful

May 23, 2012

June 30, 2012 is the deadline for physicians to report on at least 10 electronic scripts in order to avoid Medicare’s e-prescribing program penalty. If a physician does not successfully report the production of 10 electronic scripts between January 1, 2012 – June 30, 2012, Medicare will apply a 1.5% payment reduction on all Medicare claims for calendar year 2013.

The e-prescribing penalty program originated in 2008 through the Medicare Improvements for Patient and Providers Act (MIPPA). MIPPA established Medicare’s five-year incentive/penalty program in 2009 with the goal of encouraging all eligible physicians to adopt the practice of e-prescribing. From 2012 through 2014, physicians who are eligible for Medicare e-prescribing yet fail to do so will incur a penalty, while those who are successful will receive an incentive payment. Currently, physicians that did not report e-prescriptions in 2011 are seeing a payment reduction of -1.0% (while physicians that did e-prescribe are receiving a 1.0% incentive payment). Those who do not successfully report on claims in 2012 will see a -1.5% penalty on their 2013 Medicare claims (versus the 0.5% incentive payment for those who do). Finally, those who fail to e-prescribe in 2013 will face a -2.0% penalty for 2014 Medicare claims (while those who do will receive neither incentive nor penalty). As described, the penalties are based on a lack of e-prescribing from the previous calendar year, while bonus payments are made to successful physicians at the conclusion of the calendar year in which they e-prescribed.

In order to “successfully report” e-prescribing, a physician must bill a G8553 CPT code on claims in which additional office services were rendered. CPT G8553 (At least one prescription generated and transmitted via a qualified ERX system) carries a $0.00 fee. Without reporting this code, Medicare will have no way of knowing whether or not a physician is indeed e-prescribing, and thus the penalty will be assessed. It is imperative that physicians and medical billing companies verify that these codes are being transmitted on electronic claims. Certain medical billing companies and billing software may have an “error scrubber” that incorrectly removes these codes from claims because the CPT is billed at $0.00. If this is the case, your billing company must establish a software override to ensure your successful reporting.

CMS does have a “hardship exemption” for eligible physicians to avoid the penalty. Physicians that are eligible for the exemption include those who prescribe fewer than 100 prescriptions between January 1, 2012 – June 30, 2012; those who are in a rural area without access to high-speed internet; those who are located in area without access to pharmacies that accept e-prescriptions; those who are unable to e-prescribe due to local, state, or federal law. To apply for an exemption, physicians must complete and submit CMS’s required form (available on the CMS website).

For more information, the AMA has a helpful guide on the basics of Medicare Electronic Prescribing, while CMS also has a website dedicated to the incentive program.