Medicare Outlines e-Rx Incentive

HDM Breaking News, October 31, 2008

The Medicare program in 2009 will provide physicians with a financial incentive to use electronic prescribing in hopes of boosting the efficiency and safety of care.

Physicians and other clinicians who adopt and use qualified electronic prescribing systems to transmit prescriptions to pharmacies may earn an incentive payment of 2% of their total Medicare allowed charges during 2009. This incentive is in addition to a 2% incentive payment to those who successfully report measures under the Physician Quality Reporting Initiative.

In addition, the Centers for Medicare & Medicaid Services will implement a 1.1% Medicare fee schedule hike in 2009 as required by the Medicare Improvements for Patients and Providers Act of 2008.

Under the Medicare Improvements for Patients and Provider Act of 2008, Medicare’s e-prescribing incentive payments will be 2% in 2009 and 2010; 1% in 2011 and 2012 and 0.5% in 2013. Beginning in 2012, Medicare payments to physicians not electronically prescribing would be reduced by 1%, then 1.5% in 2013 and 2% in subsequent years.

To participate in the e-prescribing incentive program, physicians must:
* use a system that can communicate with the patient’s pharmacy;
* help them identify appropriate drugs and provide information on lower cost alternatives;
* provide information on formulary and tiered formulary medications; and
* generate alerts about possible adverse events, such as improper dosing, drug-to-drug interactions or allergy concerns.

To earn the incentive payment, physicians must report one of three codes when submitting claims for specified types of medical visits. The codes indicate:
* that they did not prescribe any medications;
* that they used e-prescribing for any medications prescribed; or
* that they did not use e-prescribing because the law prohibits e-prescribing for the specific type of drug, such as a controlled substance.

The final rule on the e-prescribing incentive program will appear Nov. 19 in the Federal Register. Comments on the rule are due by Dec. 29.

CMS also announced that it’s reinstating the original computer-generated facsimile exemption that was adopted in the November 7, 2005 e-prescribing final rule, effective January 1, 2009.

This means providers can continue faxing prescriptions, for an undetermined time period, if their e-prescribing system does not actually send an electronic prescription or refill request to a pharmacy, but generates a computerized fax. CMS' earlier effort to prohibit computer-generated faxes was designed to push vendors to build--and physicians to use--"true" electronic prescribing systems. But industry comments convinced federal officials that some in the industry are not yet ready to transition from computerized faxes to true electronic transmissions to pharmacies.

More information is available at cms.hhs.gov.

For more information on related topics, visit the following channels:

• Consumer Health
• Decision Support
• Disease Management
• Electronic Health Records
• Medication Management
• Policies/Regulation
• Hospitals
• Group Practices
• Payers