It is simple to blog about how the government creates frustration for providers. It is easy pickings, and frankly, I have tried to refrain from the constant, depressing rhetoric that I see on other healthcare blog sites. That said, it is time to make an exception for the Electronic Prescribing (eRx) Incentive Program.

Let’s review the eRx quality incentive program. The eRx program was created as part of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA; PDF link). That program established a five year program of incentive payments to eligible professionals when they electronically prescribe or eprescribe for Medicare patients seen in their offices. So far it sounds good, right? More incentives for doing the “right” thing… but then things got complicated.

The next year, the American Recovery and Reinvestment Act of 2009 (aka the “Stimulus Package”) was enacted, and that law also includes the Electronic Health Records/EHR incentive (MU) program (for “Meaningful Use” of an EHR under the Health Information Technology for Economic and Clinical Health (HITECH) Act). The question is, “Do these two programs play well together?” and the answer is no.

If you participate in the EHR incentive program (MU), you are not permitted to obtain any incentive payments in the eRx program, even though you must attest to using electronic prescribing as part of your Meaningful Use of the EHR. So, no carrot there.

The eRx program for 2011 will pay a meager 1% of medical providers’ Medicare Part B Physician Fee Schedule covered professional services. Contrast that amount with the EHR incentive program (up to $18,000 in the first year; $44,000 over five years), and it is clear that providers should be focused on the EHR incentives and not the eRx program.

Incentive and Penalties for the eRx Incentive Program by Year

Year Incentive Penalty
2011 1% 0%
2012 1% -1%
2013 0.5% -1.5%
2014 +0% -2%

This table accurately reflects the eRx program incentives, but it is misleading!

Let’s do a quick recap before I explain why it is misleading:

  1. The government sponsors an eRx incentive program (1% of Medicare Part B PFS in 2011)
  2. The government sponsors an EHR incentive program (up to $18,000 in 2011)
  3. If you are in the EHR incentive program, you cannot qualify for the eRx incentive.

Here is where things get complicated. If you plan on targeting the EHR incentive program, you can still be penalized in the eRx program. Yes, even if you are trying to “do the right thing” and adopt an EHR, the eRx program can penalize you! If it sounds crazy, please read this excerpt from the Medicare website:

In November, the Centers for Medicare & Medicaid Services announced that, beginning in calendar year 2012, eligible professionals who are not successful electronic prescribers based on claims submitted between January 1, 2011 – June 30, 2011, may be subject to a payment adjustment on their Medicare Part B Physician Fee Schedule (PFS) covered professional services. Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) authorizes CMS to apply this payment adjustment whether or not the eligible professional is planning to participate in the eRx Incentive Program.

What Medicare is saying is that each provider, whether they are in the EHR incentive program or the eRx program, must prove that they are electronic prescribers during the months of January-June 2011. If a provider does not prove that they are an eprescriber during the first six months of 2011, they will be penalized in 2012. The “payment adjustment” (penalty) will be 1% of the covered professional services in 2012.

OK, so how do you prove that you are a successful electronic prescriber? You must add a G-code (procedure code) that tells Medicare that you prescribed electronically during an encounter to at least 10 of the corresponding claims between January-June 2011 to avoid that penalty in 2012.

Time for another recap:

  1. The government sponsors an eRx incentive program (1% of Medicare Part B PFS in 2011)
  2. The government sponsors an EHR incentive program (up to $18,000 in 2011)
  3. If you are in the EHR incentive program, you cannot qualify for the eRx incentive
  4. If you choose to participate in the EHR incentive program, you can still be penalized by the eRx program
  5. The penalty for not “proving” that you are a successful electronic prescriber is 1% of 2012 Medicare revenue
  6. To avoid penalties in 2012, a provider must add a special G-code to at least 10 claims in the first half of 2011
  7. The special G-code should only be added to claims that reflect an encounter that included ePrescribing
  8. In future years, the penalties for not proving that you are a successful electronic prescriber are 1.5% in 2013 and 2% in 2014.

Practically speaking, if you want to participate in the EHR (MU) incentive program and you don’t want to incur an eRx penalty, what should you do? With MediTouch EHR®, we have developed and provided a tool that, with a single click per encounter, will assist you in passing the proper G-code to Medicare so that you may avoid the eRx penalty.

The eRx program should be modified by Medicare so that any provider that is part of the EHR incentive program is exempt from having to report on 10 claims in the first part of this year. We hope that Medicare reconsiders their policy on penalizing providers who are well intentioned and participating in a program that already includes ePrescribing. Until such time, with just a few clicks in the MediTouch® system, providers can avoid eRx penalties.