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209,000 Doctors At Risk For E-Prescribing Penalties

Healthcare providers who don't write prescriptions electronically may be subject to a 1% Medicare payment reduction in 2012.

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Unbeknownst to many medical practices, as many as 209,000 physicians and other healthcare providers may already be in line for a 1% Medicare payment reduction in 2012 for not writing prescriptions electronically. The Centers for Medicare and Medicaid Services (CMS) is looking at claims for the first six months of 2011 to determine who will be penalized starting next year.

"The concern now, really, is the timing," said Robert Tennant, a Washington-based senior policy advisor for the Medical Group Management Association. "There are a lot of practices that are scrambling to come up with a solution."

The 2008 Medicare Improvements for Patients and Providers Act (MIPPA) instituted a Medicare e-prescribing program that pays small incentives to doctors who write at least 10% of their prescriptions electronically, with some exceptions. The bonus was 2% of eligible Medicare Part B charges in 2009-10, 1% in 2011-12, and 0.5% in 2013. But deductions for noncompliance start at 1% in 2012, then climb to 1.5% in 2013 and 2% in 2014.

The law did permit CMS to start measuring e-prescribing levels prior to 2012 for the purpose of determining who is subject to the penalties in 2012. The agency chose January-June 2011.

"Under the law, the payment adjustment affects claims for services no earlier than January 1, 2012, so, no one is receiving payment adjustments yet," CMS said in an e-mailed statement. "However, in order for us to figure out whether a provider may have a payment adjustment kick in next year, we have to have a baseline period from which to assess his or her e-prescribing activity. That's why we're looking at claims from Jan. 1 to June 30 of this year."

This potentially creates an ironic situation for some who are planning on achieving "meaningful use" of electronic health records (EHRs) during the second half of 2011, according to Tennant. Physicians and other providers who meet federal EHR usage standards for 90 consecutive days this year can earn $18,000 in Medicare bonus money. The first payments went out two weeks ago.

Although this year's standards for meaningful use require physicians to e-prescribe at least 75% of the time--more than enough to meet the 10% threshold for avoiding the 2012 penalty--doctors don't have to start the 90-day clock for meaningful use until October 1. "You could be a meaningful user and receive $18,000 in incentive payments, and still get penalized for not e-prescribing," Tennant noted. "It really makes little sense."

CMS did start to address part of the conundrum last week by publishing proposed regulations to expand "hardship" exemptions from the e-prescribing rules. Under the plan, doctors and other healthcare professionals who prescribe drugs could qualify for an exemption if they don't write a lot of prescriptions, live in an area that restricts e-prescribing, or postpone installing e-prescribing technology because they plan on acquiring a more complete EHR to participate in the other incentive program.

Currently, only those in remote areas with limited Internet access or where many pharmacies aren't able to accept e-prescriptions can seek a hardship exemption. CMS said that the proposed changes could make as many as 109,000 providers eligible for exemptions. The agency estimated that 209,000 providers nationwide are in line for 2012 penalties unless they reach the 10% e-prescribing level by June 30.

"CMS has listened to the provider community, and I'll applaud them for that," Tennant said. "But it's still late in the game ... and it's not final," he added. Providers have until Oct. 1 to request exemptions for 2012.

However, CMS is accepting public comments until July 25 and thus can't finalize the changes before that date, so there will not be much time to apply for an exemption.

"What we don't want is some providers to adopt a standalone e-prescribing system, only to scrap it a few months later when they install a full-fledged EHR," Tennant said.

The Healthcare IT Leadership Forum is a day-long venue where senior IT leaders in healthcare come together to discuss how they're using technology to improve clinical care. It happens in New York City on July 12. Find out more.

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