CMS Expands Hardship Exemptions for E-Prescribing in Attempt to Fix Program Overlap

FPs Need to Act Now to Avoid 2013 Penalties

August 10, 2012 05:35 pm Sheri Porter

"Many physicians got stung by the 1 percent electronic prescribing penalty for 2012. We don't want to repeat that experience in 2013," noted Jason Mitchell, M.D., assistant director for the AAFP's Center for Health IT, in reference to news that HHS recently proposed adding two more significant hardship exemption categories for Medicare's Electronic Prescribing (eRx) Incentive Program.

The proposal was published in the July 30 Federal Register(

In an interview with AAFP News Now, Mitchell agreed with the intent of CMS' proposal. He said the rules set up to guide Medicare's eRx Incentive Program and the mechanism for reporting in that program and in Medicare's Electronic Health Record (EHR) Incentive Program, also known as meaningful use, "collided in a very ugly way."

"Now, CMS is trying to fix the problem," said Mitchell.

According to the posting in the Federal Register, Medicare's EHR Incentive Program and e-Rx Incentive Program "share a common goal of encouraging electronic prescribing and the adoption of technology that enables eligible professionals to electronically prescribe."

story highlights

  • HHS wants to add two more significant hardship exemption categories for Medicare's Electronic Prescribing Incentive Program.
  • The second of the two exemptions deals with "intent to participate" and likely will be most helpful to family physicians.
  • Physicians must closely follow instructions to ensure securing a hardship exemption and thus avoid a 1.5 percent Medicare pay cut in 2013.
  • Physicians have until Oct. 15 to apply for the proposed hardship exemptions.

However, each incentive program has specific requirements for how physicians must demonstrate their electronic prescribing activity, and that has created angst among family physicians.

"In most cases, we believe the electronic prescribing objective of meaningful use would be a more rigorous standard for eligible professionals to meet than the standard adopted under the electronic prescribing incentive program," wrote CMS in the proposed regulation. "We believe it may pose a significant hardship for eligible professionals who are meaningful EHR users to additionally comply with the requirements of being a successful electronic prescriber under the e-Rx Incentive Program."

Mitchell noted that in a perfect system, physicians who have attested to meaningful use should automatically be exempted from penalties under the e-prescribing program. "But rather than using an automated process, CMS is requiring physicians to go through a manual process to apply for the hardship exemptions. A physician has to actively say to CMS, 'I'm a meaningful EHR user, don't penalize me,'" he said.

According to Mitchell, the exemption for which most family physicians would qualify is option B, which deals with "intent to participate." Specifically, that exemption would extend to "eligible professionals or group practices who demonstrate intent to participate in the EHR Incentive Program and adoption of certified EHR technology."

He noted that although physicians can qualify for the incentive programs as individuals or as a group practice, there is no way to apply for a hardship exemption request as a group for 2013. "Only individual exemption requests will be accepted; the process for 2014 still is not clear," he said.

Mitchell laid out additional details that physicians should keep in mind. For example, to qualify for the option B exemption, physicians cannot previously have adopted certified EHR technology or received an incentive payment through the Medicare or Medicaid EHR Incentive Programs. In addition, physicians must

  • register to participate in the Medicare EHR Incentive Program via the registration and attestation system(,
  • include the product number of the certified EHR they are using, and
  • submit the hardship exemption request as soon as possible but no later than the Oct. 15 deadline.

Although the process can be completed online, Mitchell suggested that a hard copy sent through the mail would be safer. "I urge members to crank out a letter to CMS saying they are registered in the system, have adopted a certified EHR and are requesting a hardship exemption for the e-prescribing program," said Mitchell.

Mail those requests to: CMS, Office of Clinical Standards and Quality, Quality Measurement and Health Assessment Group, 7500 Security Blvd., Mail Stop S3-02-01, Baltimore, MD 21244-1850.

Regarding option A of the proposed new hardship exemptions, Mitchell said there's little physicians can do now to meet that proposed hardship exemption, which would extend to "eligible professionals or group practices who achieve meaningful use during certain eRx payment adjustments."

"Anyone who started using their certified EHR after April to get the meaningful use incentive would not qualify for the first hardship exemption," said Mitchell. "A physician's continuous 90-day reporting period had to be between Jan. 1, 2012, and June 30, 2012.

"Physicians can and should consider meeting that 90-day requirement between October and December to qualify for a meaningful use bonus for 2012; however, doing so will not prevent them from also receiving an eRx penalty," said Mitchell.

Exemptions already are available to physicians who

  • practice in a rural area with limited high-speed Internet access;
  • work in an area where few pharmacies have implemented e-prescribing;
  • generate fewer than 100 prescriptions during a six-month reporting period;
  • have insufficient opportunity to use the required CPT codes; or
  • are unable to e-prescribe because of local, state or federal regulations.

Physicians who are granted exemptions will not face penalties for nonparticipation. As Mitchell noted, some physicians already are seeing the results of a 2012 penalty that amounts to a 1 percent reduction in physicians' Medicare payment; the penalty increases to 1.5 percent in 2013 and to 2 percent in 2014.