Are You Exempt from the 2012 e-Rx Penalties?

If you aren’t e-Prescribing in 2011, then you risk a reduction in Medicare payments of 1.0% in 2012 and 1.5% in 2013. 

 

In order to avoid the 1% payment reduction in 2012, you must have successfully e-Prescribed and reported G8553 on 10 Medicare billable E&M office visits by June 30, 2011.

 

If you missed the June 30, 2011 deadline, and can answer “yes” to any of the following questions, you may qualify for the “significant hardship exemptions” recently finalized by CMS: 

Request a Hardship Exemption
CMS has announced that billing managers, office managers, receptionists, and other office staff cannot submit an eRx hardship exemption request on behalf of their eligible professionals.   Physicians (or providers) must make this request themselves. 

 

Requests for hardship exemptions must be made online.  You will indicate which exemption you are applying for and will be provided an opportunity to justify your exemption request in 250 words or less.  CMS reviews requests for exemptions on a case-by-case basis.  There is not an appeal process if your request is denied.  Hardship exemptions are only valid for one year; must reapply annually.   

 

The deadline to apply for the significant hardship exemption request is November 1, 2011.  Apply online at: https://www.qualitynet.org/portal/server.pt/community/communications_support_system/234

 

What if I Don’t Qualify for a Hardship Exemption?
If none of the hardship exemptions applied to you and

you are subject to the 1% Medicare payment reduction for 2012 and on the road to the 1.5% payment reduction for 2013. 

 

It’s not too late to earn the 1% incentive for 2011 for e-Prescribing.  If you don’t have an EHR or an eRx system, visit www.nationalerx.com to learn about a FREE internet based system.  In order to receive the 1% incentive for 2011, report G8553 (indicating you e-Prescribed during the visit) at least 25 times for Medicare billable office visits (non-billable pre-op and post-op visits don’t count) between now and December 31, 2011.  Although in most states you are unable to electronically prescribe narcotics, remember that NSAIDS, antibiotics, and even OTC medications can be e-Prescribed. 

 

Begin e-Prescribing today and not only will you earn the incentive for 2011, but you will avoid the penalty for 2013.  (Note, you cannot earn the e-Prescribing bonus and receive the EHR Meaningful Use incentive in the same year). 

 

Question:  I don’t qualify for any of the exemptions in 2012… now what?
Answer:  Many hand surgeons who did not adopt e-Prescribing technology by 2011 or have converted to an EHR will receive a 1% reduction in Medicare payments in 2012.  However, there is still time to avoid the 1.5% Medicare payment penalty for 2013 AND receive a 1% Medicare bonus in 2011.

 

By avoiding the penalty in 2013 (reporting G8553 25 times before December 31, 2011), you actually qualify to receive the 1% Medicare incentive for 2011.   However, ff you qualify under Meaningful Use, you will not also qualify for the eRx Incentive (no double-dipping.)  Keep in mind that you can e-Prescribe NSAIDS, antibiotics, and even OTC medications (https://questions.cms.hhs.gov/app/answers/detail/a_id/10636/kw/otc) Report your 25 before year end and receive the 1% Medicare bonus.

 

Question:  In my practice, I write very few prescriptions. If I do not write 25 prescriptions for Medicare patients, will I be subject to the penalty?
Answer:  You may apply for the “limited prescribing activity” significant hardship exemption for writing less than 10 prescriptions January 1 – June 30, 2011.  These exemptions are reviewed on a case-by-case basis by CMS for approval - you are pleading your case to CMS.  Deadline is November 1, 2011.   

 

Question:  Basically, does this mean I become penalized for not writing prescriptions?
Answer:  Luckily, the “limited prescribing activity” exemption was included.  Apply by November 1, 2011.

 

Question:  Are narcotics considered eligible for e-Prescribing?
Answer:  The Drug Enforcement Administration’s (DEA) Interim Final Rule (IFR) on electronic prescriptions for controlled substances was published in the Federal Register on March 31, 2010 and went into effect June 1, 2010.  Full implementation of these rules in ambulatory care settings is not wide spread.  For more information on the requirements for e-Prescribing narcotics visit the DEA website:  http://www.deadiversion.usdoj.gov/ecomm/e_rx/index.html

 

From a practical standpoint, work with your e-Prescribing vendor or your EHR vendor to enable electronic prescribing of narcotics.  Keep in mind that there may be state restrictions as well.  State regulations do supersede the DEA rule.  We must put pressure on the vendors to make this work.

 

Although narcotics are by and far the most prescribed drug for many surgeons, look at your prescribing of NSAIDs, antibiotics and OTC medications. 

 

There is a significant hardship exemption for “inability to electronically prescribe due to local, state, or federal law or regulation” - that otherwise has general prescribing authority from electronically prescribing (for example, eligible professionals who prescribe a large volume of narcotics, which may not be electronically prescribed in some States).  However, in order to apply for this exemption for 2012, you must have and use an eRx system as June 30, 2011.  Check with your state first to determine if it is possible to electronically prescribe controlled substances. 

 

Question:  What is the penalty percentage for not complying? 
Answer:  The penalty in 2012 is a 1% reduction in your Medicare payments.  In 2013, the penalty is a 1.5% reduction of your Medicare payments. 

 

Question: What is the "1%" bonus based on?
Answer:  The bonus for successfully e-Prescribing in 2011 (granted that you do not also participate in the EHR incentive for 2011 – you can’t double dip) is 1% of your annual Medicare Allowable Charges (think the 80% that you receive from Medicare plus the 20% you receive either from the patient or their secondary insurance.)

 

Question: Is e-prescribing bonus and penalty based on the group or per individual basis?
Answer:  The bonus and the penalty are calculated on a per provider basis. However, payment is made to the Taxpayer Identification Number (TIN) for the provider, so the payment goes to the group.

 

Question:  What if you are not practicing because of medical leave?
Answer:  There is an exemption if you do not have at least 100 claims that contain an encounter code that falls within the denominator codes for the period of time January 1, 2011 to June 30, 2011. 

 

Question:  This does not just relate to Medicare patients, correct?
Answer:  The incentive and the penalty are Medicare programs.  However, many practices discover the benefits of e-Prescribing and do it for all of their patients, not just the Medicare patients. 

Author Contact Information
Cheyenne Brinson, MBA, CPA
Consultant and Speaker, KarenZupko and Associates, Inc.
625 N. Michigan Avenue, Suite 2225, Chicago, IL 60611
(312) 642-5616 ext 220
cbrinson@karenzupko.com