Proposed Changes to the e-Rx Incentive Program: Is CMS Softening the Blow?

For the past couple of weeks we have been talking about the contents of the proposed rule for the 2012 Medicare PFS. While not written in stone, the proposed rule does provide insight into the direction CMS is headed. In this last post (I promise) related to the proposed rule, let’s take a look at what may be in store for the e-prescribing incentive program. As you may recall, the e-Rx program is one of the first “carrot & stick” incentive programs unleashed by CMS. As with the PQRS program, the incentive and the adjustment (clever way of saying penalty) represent a percentage of the provider’s entire Medicare Part B allowable for the calendar year. The current schedule for the e-Rx program is noted below:
 

 
Note, there are no e-Rx incentives or penalties authorized beyond 2014. Also remember, those of you choosing to demonstrate meaningful use via the Medicare path may not “double dip” and also receive the e-Rx incentive, although you could be subject to the e-Rx penalty.
 
So what’s new in the proposed rule? Qualifying for the incentive is unchanged. The nephrologist, NP or PA must generate and transmit a script electronically during 25 eligible encounters with Medicare Part B beneficiaries. “Eligible encounters” for the incentive continues to be defined by the same 56 CPT and HCPCS codes that have been in place since 2010. Effectively these are the office based E & M codes for the typical nephrologist. Conveying participation to CMS can occur as it does today: 1) put the e-Rx G code (G8553) on the claim submitted for the office encounter, 2) submit the information through a CMS qualified PQRS registry, or 3) utilize one of the EHRs that permit direct reporting of the e-Rx measure to CMS.
 
The exciting news (OK, I admit “exciting” is a stretch when it comes to the Medicare PFS) relates to a couple of items within the penalty section of the proposal. The first one comes from a single sentence buried in the proposal: “We also believe that eligible professionals who have met the 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 they should not be subject to the payment adjustment in future years.” In plain English this means if you have been paid for participating in the e-Rx program in the past you cannot be penalized in the future. This is HUGE!
 
The second item of interest in the proposed rule relates to the short 2013 and 2014 payment adjustment reporting periods. Those periods are basically the first six months of the preceding year. That is, CMS will observe your behavior between Jan 1 and June 30, 2012, to determine whether or not to penalize you in 2013 for not being a successful e-prescriber. Hopefully this is not the first time you have heard this story because verse one occurred during the first six months of this year. The good news for nephrologists is the proposal to avoid the penalty in 2013 and 2014 basically would look for evidence that you sent a script electronically during 10 encounters with ANY Medicare Part B beneficiary. No longer would those scripts need to be related to an encounter in the office (one of the 56 CPT/HCPCS codes referenced above). If you are making rounds in the dialysis unit on a Part B beneficiary and send a script electronically, that would count as one of your 10 scripts to avoid the penalty.
 
What can we learn from this section of the proposed rule? I think the clearest message is CMS is working hard to attenuate the penalty phase of the e-Rx program. Combined with their hurried approach to include demonstrating meaningful use as a means to avoid the e-Rx penalty, the two tidbits I called out above are welcome news. Of course this remains a proposed rule, but from my perspective this is a positive step and may provide a window into CMS’ intentions related to the penalty phases of the other programs occasionally featured in this blog.