Retirement-Age Physicians Should Not Be Hit With eRx Penalty

July 27, 2011

July 27, 2011 — Any physician who is currently eligible for Social Security retirement benefits — or will be by 2014 — should be exempted from the Medicare penalty that debuts next year for not electronically prescribing, organized medicine stated Monday in a letter to the Centers for Medicare and Medicaid Services (CMS).

The rationale for the exemption, the American Medical Association and 91 other national and state medical societies argue, is that physicians close to retirement would find it economically burdensome to install and use an e-prescribing system. In addition, many of these physicians may retire or close their practices to Medicare patients simply to avoid the penalty, thus making it harder for seniors to find a clinician.

The retirement loophole is one of several that the medical societies floated in response to proposed CMS regulations that would spare more physicians, nurse practitioners, and other prescribers from the penalty in 2012. The deadline for responding to these draft regulations, published in May, was July 25.

In its letter, organized medicine endorsed the loopholes that CMS wants to create but lobbied for more. CMS has estimated that the 2012 penalty could hit as many as 109,000 clinicians.

The proposed CMS regulations in question are different from those the agency published early this month that would help clinicians avoid the e-prescribing penalty in 2013 and 2014 as opposed to 2012.

Medical Societies Ask for Year’s End to Claim Exemption

In 2008, Congress created an incentive program that gives clinicians a bonus if they transmit prescriptions electronically with approved software to pharmacies for their Medicare patients. The bonus is 1% of Medicare-allowed charges in 2011 and 2012, and 0.5% in 2013, the last year for such rewards. However, clinicians who failed to report at least 10 electronic prescriptions on Medicare claims during the first 6 months of 2011 face a 1% pay cut — a payment adjustment, in CMS parlance — the following year. The penalty grows to 1.5% in 2013 and 2% in 2014.

As federal regulations stand now, clinicians will avoid the 2012 penalty if they e-prescribed at least 10 times during separate office visits over the first 6 months of 2011. The letter from organized medicine to CMS this week urged the agency to create a second reporting period — the first 6 months of 2012 — so physicians would have another crack at generating 10 e-prescriptions and avoiding the penalty that year.

In the spirit of taking things slow and easy, the medical societies also asked CMS to levy the 2012 penalty in 2013.

Clinicians can sidestep the penalty altogether by claiming either of 2 exemptions now on the books: practicing in a rural area without sufficient high-speed Internet access or relying on pharmacies that do not receive electronic prescriptions. In May, CMS proposed 4 more exemptions for the 2012 penalty that apply to clinicians who:

  • Register for the Medicare or Medicaid incentive program for electronic health records and adopt certified electronic health record technology;

  • Are unable to e-prescribe because of local, state, or federal law;

  • Infrequently prescribe — that is, fewer than 10 times in a 6-month reporting period; or

  • Lack insufficient opportunities to e-prescribe because they do not submit enough of the 56 billing codes — most in the realm of evaluation and management services — that must be associated with the scripts.

Organized medicine supports these proposed exemptions but also wants to give out 2 other free passes: one for physicians who are eligible, or soon will be, for a Social Security check, and another for physicians who report their electronic prescriptions to CMS with the wrong billing code, or no code at all.

Physicians had until June 30 to claim an exemption from the 2012 penalty. CMS has proposed extending the deadline to October 1. Medical societies recommend pushing it out until the end of the year.

More information on the e-prescribing incentive program, and how to avoid the penalty, is available at the CMS Web site.

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