CMS Creates Two Sets of Criteria for E-Prescribing Incentive Program

AAFP Dissects Rules for Incentive Payments, Penalties

March 08, 2011 04:40 pm Sheri Porter

Family physicians participating in CMS' electronic-prescribing, or eRx, incentive program must meet two different sets of criteria if they want to both avoid a penalty and earn an incentive payment, according to a recent MLN Matters( article.

According to the article, physicians must

  • submit 10 Medicare claims to avoid a 2012 e-prescribing penalty, and
  • submit 25 Medicare claims to earn a 2011 incentive and avoid a penalty in 2013.

Additionally, physicians may use a qualified electronic health record, or EHR, or a registry to submit data to qualify for the 2011 incentive payment and avoid the 2013 penalty.

Confused? It all boils down to CMS' interpretation of Section 132 of the Medicare Improvements for Patients and Providers Act of 2008, says Cynthia Hughes, C.P.C., an AAFP coding and compliance specialist and co-author of Family Practice Management's "Getting Paid" blog.

CMS specifies that to avoid a penalty against Medicare payments in 2012, physicians must submit 10 Medicare fee-for-service claims before June 30, 2011, that include the additional e-prescribing "G" code 8553 and specific CMS-designated codes in the denominator(

The agency must receive the information from physicians by June 30, 2011, to determine which physicians will incur the penalty beginning Jan. 1, 2012. It's a timing issue, says CMS, noting that it will not even start to receive and process data from EHRs and registries until after Jan. 1, 2012, the date that the agency will apply penalties to physicians' Medicare payments.

CMS will penalize physicians who are not deemed e-prescribers by reducing Medicare payments by

  • 1 percent in 2012,
  • 1.5 percent in 2013, and
  • 2 percent in 2014.

Ironically, physicians who successfully participate in the eRx program by submitting 25 claims within the calendar year via a registry or EHR -- but who do not submit 10 claims with the G8553 code before June 30 -- will be subject to the penalty in 2012, but they still will be eligible for the 2012 eRx incentive.

"Physicians who find themselves in this situation will break even, because they will pay a 1 percent penalty and earn a 1 percent incentive," says Hughes.

Hughes points out that physicians earning the 2011 eRx incentive will be exempt from the eRx penalty in 2013 because CMS will use the 2011 reporting period to determine which physicians incur a penalty in 2013.