Penalty for Not Prescribing Electronically Kicks in Jan. 1, 2012

Family physicians who participate in Medicare but who did not successfully implement electronic prescribing in 2011 -- or apply for and receive a hardship exemption -- will notice slightly lower payments in 2012. Specifically, those physicians will see a 1 percent penalty applied to all payments made for Medicare Part B services they provide from Jan. 1, 2012 to Dec. 31, 2012.

Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 gives CMS the authority to penalize eligible professionals who are not e-prescribing as directed by Medicare's Electronic Prescribing Incentive Program. The penalty -- referred to as a "payment adjustment" by CMS -- will increase with each new reporting period from 2012 through 2014.

Therefore, in 2013, affected physicians will receive 1.5 percent less than the payment amount allowed by the Medicare physician fee schedule for professional services rendered. In 2014, a 2 percent penalty for physicians not prescribing electronically will be applied to all payments made for Medicare Part B services.

A recent article in CMS' MLN Matters (5-page PDF; About PDFs) has more details about what affected physicians will see when they receive Medicare payments for services provided. For example, remittance advice documents sent to physicians will include a claim adjustment reason code "237" indicating that the adjustment is due to a legislated regulatory penalty. In addition, physicians will see a remark code "N545" stating that the payment was reduced based on the physician's status as an unsuccessful e-prescriber per Medicare's e-prescribing program.

Answers to additional questions about the Medicare payment adjustment are available on the CMS website or by contacting the agency's QualiltyNet help desk at (866) 288-8912 or by e-mail. The help desk is staffed Monday through Friday from 7 a.m. to 7 p.m. CST.