CMS eRX Incentive Program: 2012 & Beyond

With great anticipation, the final rule for the 2012 Medicare Physician Fee Schedule (PFS) arrived on November 2. Weighing in at 1,235 double-spaced pages, the PFS offers something for everyone. I do not intend to read it cover to cover, but there are some tidbits of interest for those of us following health IT and its intersection with nephrology. Today I’d like to review what’s new for the CMS eRx incentive program.

 

This program has attracted quite a bit of attention recently, in large part related to the looming penalty that will be imposed upon unsuccessful electronic prescribers in 2012. Many of you have received automated phone calls or letters in the mail advising you that your Medicare Part B allowable will decline 1% in 2012 due to this penalty. The 2012 PFS does not contain relief for the 2012 penalty but does provide advice on how to avoid future penalties and what it will take to receive an incentive in the remaining years of the program.

 

The program will sunset following the 2014 calendar year. The existing incentives and penalties for the remaining years are identified in the table below. The percentages are applied to the provider’s Medicare Part B Allowable for that year.

 

Year	Bonus	Penalty
2012	1.0 %	1.0 %
2013	0.5 %	1.5 %
2014	0	2.0%

 

The Bonus

Attaining the bonus in 2012 or 2013 has not changed and requires the same level of work we have seen in 2010 and 2011. Success requires the provider to generate and transmit at least one prescription electronically during 25 “denominator eligible” encounters with Medicare Part B beneficiaries. Eligible encounters continue to be defined by the same 56 CPT or HCPCS codes that have been in play for the past two years. For the typical nephrologist this confines an eligible encounter to one that takes place in the office using one of ten office based E & M codes (99211-215 or 99201-205). Receiving the bonus requires conveying your success to CMS in one of three ways: 1) placing the eRx G-code (G8553) on the claim for the 25 encounters, 2) reporting participation through a CMS-qualified PQRS Registry, or 3) reporting directly from a qualified EHR. Successful participation continues to require that at least 10 % of the provider’s Medicare Part B allowable originates from CPT codes in the measures denominator (office based E & M visits for most nephrologists).

 

The Penalty

The real news in the 2012 PFS related to eRx is how to avoid the penalty in future years. CMS has made this much easier in some respects, tougher in others. First, in both of the remaining years of the penalty (2013 & 2014), CMS has created two separate “adjustment reporting periods.” These are the periods of time during which a provider’s activity (or lack of activity) will determine whether or not they incur the eRx penalty. The two adjustment RPs for 2013 are calendar year 2011 and the first six months of 2012. The adjustment RPs for 2014 follow suit (calendar year 2012 and the first six months of 2013). To avoid the 2013 penalty a provider may either send an eRx for 25 eligible Part B beneficiaries during 2011 OR  may send an eRx for 10 eligible Part B beneficiaries between Jan 1, 2012 and June 30, 2012. In either circumstance the provider will avoid the 2013 penalty.

 

Of particular interest is the definition of eligible encounters within this context. During the year-long adjustment RP, CMS is essentially looking for evidence that e-prescribing took place during an incentive-eligible encounter (again, office based encounters for most nephrologists). This is identical to what is required to receive the incentive that year. In effect, CMS is stating that if you submit enough data to receive the incentive during a specific year, you will not be penalized the following year.

 

Avoiding the penalty is actually easier during the shorter six-month RP. Here, CMS is looking for evidence that a script was sent electronically during ANY 10 encounters with a Part B beneficiary. To take advantage of the six-month RP you must add the eRx G-code to 10 Part B claims during the first half of the year, but, again, any encounter during which a script was sent will count. This is a substantial change from the stricter requirements in the past and, I suspect, a reflection of their intent to create additional mechanisms to avoid the penalty.

 

Exemptions

Other differences in the remaining years of the program include a change in the hardship exemptions available to providers. As you may recall CMS recently expanded to six the number of hardship exemptions a provider could request in an effort to avoid the penalty in 2012. Shocking to me is the removal of the popular (and very appropriate) exemption allowing that if I demonstrate meaningful use I will not be penalized by the eRx program. Let me repeat, if you demonstrate meaningful use in 2012 or 2013 you will still be required to let CMS know you are a successful e-prescriber through one of the methods defined above or you may face the penalty. I am still scratching my head over this one. Basically, if you demonstrate meaningful use via the Medicare path, you cannot receive the eRx bonus, and, if you are not careful, you will be hit with the penalty.

 

Finally, there is a single sentence in the 2012 PFS I think is worth quoting: “We also believe that eligible professionals who have met the payment requirements for receiving an incentive payment under the eRx Incentive Program for a particular year have sufficiently demonstrated their adoption and use of electronic prescribing technology and thus should not be subject to the payment adjustment in a future year.” This of course sounds fantastic, but I only see it mentioned once in the body of this comment. If you have additional information confirming this send it to us and we will post it here.

 

In summary, the eRx incentive program will not extend beyond 2014. Avoiding the penalty will be easier in the years ahead due to the flexibility offered by the six-month adjustment reporting periods. And finally, those of you demonstrating meaningful use should not fall asleep at the wheel…you still need to let CMS know you are a successful e-prescriber.