Physicians to CMS: Re-evaluate Timelines, Implementation of Penalty Phases

We are writing "to express our profound concern about the imminent storm that is about to occur due to simultaneous implementation of multiple programs that will create extraordinary financial and administrative burden, as well as mass confusion, for physicians."

Thus begins a letter (5-page PDF; About PDFs) to Acting CMS Administrator Marilyn Tavenner, M.A., spearheaded by the AMA and signed by more than 110 national and state physician specialty organizations, including the AAFP. The organizations are calling on CMS to ease the regulatory and financial burdens on physician practices by re-evaluating penalty timelines, as well as administrative and financial requirements, associated with various federal regulatory programs.

In the letter, the AAFP and other organizations urge CMS to re-evaluate penalty timelines associated with programs such as the Medicare electronic prescribing program, the Medicare and Medicaid Electronic Health Record (EHR) Incentive programs and the Physician Quality Reporting System (PQRS). They also ask CMS to examine the administrative and financial burdens on physicians caused by the intersection of the various federal regulatory programs.

CMS should use its discretionary authority over these programs to develop ways to synchronize the programs to minimize the burden on physician practices, says the letter. In addition, the agency needs to propose its solutions in the 2013 proposed Medicare physician fee schedule.

Putting the cumulative impact of these regulations and financial penalties into perspective, the letter points out that physicians are facing an ongoing threat of steep Medicare payment cuts because of the sustainable growth rate (SGR) formula. In addition, the threatened SGR payment cut coincides with a 2 percent deficit-reduction sequester starting January 2013. "These cuts alone will take a huge toll on physician practices and patient access to care," says the letter.

"Physicians are also facing present and future financial penalties if they do not successfully participate in multiple Medicare programs, including the e-prescribing program, the EHR meaningful use program and the Physician Quality Reporting System. In addition, physicians are being required to meet separate requirements under these overlapping health (information technology [IT]) programs and have been and will be unfairly penalized if they decided to participate in one program over the other."

In addition to all this, says the letter, CMS has decided to back-date reporting requirements for the penalty programs. For example, CMS is basing the e-prescribing penalty for 2012 on a physician's 2011 e-prescribing activities.

CMS also is proposing to back-date the penalty program for stage two of the Medicare and Medicaid EHR incentive programs, which are based on physicians' meaningful use of EHRs. The law requires that penalties for not documenting meaningful use begin in 2015, which means that physicians who do not successfully meet the requirements in 2013 or by Oct. 3, 2014, would face a penalty starting on Jan. 1, 2015. "Further, CMS is basing the 2015 PQRS penalty on clinical quality measure reporting that occurs in 2013 and is using 2013 as the basis for payment adjustments for the 2015 value-based payment modifier," the letter says.

As a result, CMS essentially has "pushed up deadlines for participation by a full year or more, and this back-dating policy will subject a significant number of physicians to financial penalties and slow down the adoption and implementation rates of EHRs."

"We urge that CMS, in the physician fee schedule proposed rule for calendar year 2013, discontinue its plans to back-date penalty programs, while better synchronizing the incentive and penalty programs so that physicians who successfully participate in one program are protected from penalties associated with the other programs. Relief from this back-dating policy will also avoid the reality that physicians could receive an incentive payment and a penalty in the same year for the same program, which undermines any incentive for greater reporting or use of health IT."