Electronic Prescribing: the Double-Edged Sword

In these days of information overload, it’s easy to overlook things that affect a provider’s bottom line.  One such item is the Electronic Prescribing (eRx) Incentive Program.  Established in 2009, eRx encourages eligible professionals (EPs) who render services to Medicare Part B beneficiaries to participate in this effort aimed at preventing medication errors and reducing adverse drug events.  Another advantage of eRx is the EP’s instant access to drug formulary and coverage information which reduces patient out-of-pocket costs and subsequent calls to the provider for medication changes. Prescriptions for Medicare Advantage members do not count for this program.

Incentive Payment

The program has two parts:  one is an incentive for participation. For medications prescribed in 2012 using eRx, EPs will receive an incentive payment equal to 0.5% (down from 1% in 2011) of their total Medicare Part B payments for the year.  This incentive will be reflected in the payments received by the EP from January 1 through December 31 of 2013.  Please note that EPs participating in the Medicare EHR incentive program are not eligible for the eRx incentive.

The target for the 2012 payment is at least 25 unique prescribing events when providing a billable Medicare Part B service during 2012.  Electronically generated refills do not count, and faxed prescriptions are not considered electronic submissions. The incentive payment is triggered by the addition of the G8553 code to the service codes submitted on the claim. Finally, it’s advisable for EPs to check their EOBs to ensure the G-code is reflected in the National Claims History (NCH) database.  If CMS does not indicate acceptance of 25 eRx codes, the incentive will not be paid.


Some EPs believe that forgoing the incentive ends the eRx conversation for the calendar year.  This is a huge mistake because the second half of this program involves a penalty for non-submission.  For 2012, EPs must submit no less than 10 electronic prescriptions during the first six months of 2012 to avoid a penalty of 1.5% (up from 1% in 2011) to be reflected in all the payments for Medicare Part B services the EP receives from January 1 through December 31 of 2013.   This reduction is reflected on the Medicare allowable amount and will impact co-insurance payments as well.

Once again, checking EOBs is crucial to ensure the G-code is properly captured and reflected in the NCH database.   The deadline to make any changes or resubmissions to correct missing or faulty codes is July 27, 2012.

Some exemptions to the penalty exist for providers who prescribe less than 100 prescriptions in the first six months of the year; rural practices without high-speed internet access; and providers whose state laws prohibit electronic prescriptions or for whom a significant hardship precludes their participation.  The EP will need to submit a hardship exemption to avoid the penalty.

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