To understand the e-prescribing penalties, one must first understand how it is tied to the e-prescribing incentive that took effect under the Medicare Improvements for Patients and Providers Act of 2007 (MIPPA). Under MIPPA, affected physicians are eligible to receive bonus payments if they began e-prescribing in their practice. Bonus amounts were 2% in 2009 and 2010. In 2011, the bonus decreased to 1%.
By the end of 2011, physicians who have not implemented e-prescribing into their practice will receive a 1% penalty starting in 2012. The penalty will increase by half a percent in each subsequent year until the physician implements e-prescribing into their practice.
Physicians may be exempt from the penalties if they fit into certain scenarios.
The first exemption includes physicians, nurse practitioners and physician assistants that have not met the minimum number of relevant claims.
The provider must have filed at least 100 claims with an applicable encounter code during the timeframe of January 1, 2011 through June 30, 2011. So logically, if the provider has not met this minimum number of claims, the penalty would not apply to him/her.
Also, if the provider's claims with the applicable encounter codes do not total at least 10% of their total Medicare Part B claims, the penalty will not apply to them.
Providers who do not have prescribing privileges between the time frame indicated above are also exempt form the penalty.
There are two hardship exceptions that a provider may fall under:
- If the provider practices in a rural area that lacks sufficient internet access, they are exempt from the e-prescribing penalty
- If the provider practices in an area where pharmacies are not sufficiently ale to participate in the e-prescribing program, the provider is exempt from the penalty
In order for a provider to invoke the above exemptions, they must submit a specific encounter code sometime between January 1, 2011 and June 30, 2011.
The penalties of the e-prescribing program should not be confused with the Federal EHR Incentive Program. Each program is distinct. Each program consists of separate requirements, incentives, and penalties. The American Medical Association is actively advocating for an extension to the time frames stated above.