Most Anesthesiologists Will Be Exempt from Medicare Electronic Prescribing Penalties


June 6, 2011

The deadline for submitting at least ten Medicare claims for services involving an electronic prescription (eRx) is just 25 days from now. The Medicare eRx Incentive Program requires “eligible professionals” to submit ten claims with modifier G8553, indicating the use of an eRx, between January 1 and June 30, 2011, or else be subject to a one percent reduction in their payments in 2012. “Eligible professionals” include physicians, nurse anesthetists and anesthesiologist assistants. Groups participating in the eRx group practice reporting option (GPRO) also face a payment adjustment. This Alert will use the words “anesthesiologist” and “physician” to cover all eligible professionals. We will not address the GPRO because of its likely irrelevance to anesthesia practices.

In general, an eligible professional who is not a successful e-prescriber will receive 99 percent of his or her Medicare payment for covered services. The penalty will increase to 1.5 percent in 2013 for professionals who submit fewer than 25 e-prescriptions by the end of this year, and then to two percent in 2014.

The vast majority of anesthesiologists will not face the Medicare payment deductions, however, because they will have billed for fewer than 100 outpatient visits and/or because fewer than ten percent of their Medicare allowed charges will be attributable to such visits, during the first six months of 2011. CRNAs and AAs (and others) who do not have prescribing privileges will also be exempt if they report a specific code (G8644) to Medicare before June 30.

There is potential relief on the horizon for pain physicians whose prescriptions are mostly for narcotics, for which federal (e.g., DEA) or state law prohibits eRx. CMS recently released a proposed rule containing a new set of exceptions to the eRx requirement.

The current Program allows for just two exceptions: (1) the physician practice is located in a rural area without high speed internet access and (2) it is located in an area without sufficient available pharmacies for electronic prescribing. The physician must apply for either of these “hardship” exemptions.

Four New Categories of Exemption in the Proposed Rule

The four new proposed categories of exemptions are:

  1. Registration to participate in the Medicare or Medicaid Electronic Health Record (EHR) Incentive Program and adoption of certified EHR technology.
  2. Inability to electronically prescribe due to local, State or Federal law or regulation.
  3. Limited or no prescribing activity
  4. Insufficient opportunities to report the electronic prescribing measure due to limitations of the measure’s denominator.

The first of the newly proposed exemptions, participation in one of the two EHR Incentive Programs and adoption of a certified EHR system, is a response to critics who showed CMS that there was a conflict between the requirements of the eRx and the EHR Programs. Until there are Medicare-certified EHRs for anesthesia services, this new exemption will not be of much use to the specialty. Pain physicians may have adopted certified EHR technologies, however, and if so, this exemption will shield them from the 2012 eRx penalty.

The second proposed exemption may be helpful to a number of pain physicians. State laws and regulations may prohibit eRx for controlled substances including narcotics. The federal DEA issued an Interim Final Rule that went into effect, albeit with some open issues, on June 1, 2010 and made e-prescriptions for controlled substances permissible under certain onerous conditions. Since CMS will decide whether to allow a hardship exemption on a case-by-case basis, either the difficulty of complying with the DEA eRx requirements or applicable state law may provide grounds for an exemption.

Some states prohibit or limit the transmission of e-prescriptions via a third-party network such as Surescripts. CMS’ discussion indicates that physicians subject to such restrictions would also have grounds to request an exemption.

In its third proposed category, “limited prescribing activity,” CMS would exempt physicians who write very few prescriptions at all. CMS cites as examples “a nurse practitioner who may not write prescriptions under his or her own NPI, a physician who decides to let his [DEA] registration expire during the reporting period without renewing it, or an eligible professional who prescribed fewer than 10 prescriptions between January 1, 2011 and June 30, 2011 regardless of whether the prescriptions were electronically prescribed or not.”

Lastly, CMS proposes to exempt physicians who e-prescribe, but only for types of visits that don’t count toward the 10-eRx minimum. Among the visits that do count, identified by more than fifty CPT® codes, are all five levels of both the new patient and established patient office or other outpatient visits (codes 99201-99205 and 99211-99214). To the extent that anesthesiologists or pain physicians e-prescribe, and submit claims for outpatient or office visits to Medicare, but do not normally write any prescriptions associated with those visits, they might be able to demonstrate hardship and be granted exemptions.

Process for Requesting an Exemption

As noted above, the new exemptions appear in CMS’ proposed regulation. The proposals may be modified a lot or a little before the rule is finalized. It can only be finalized after July 25, 2011, when the public comment period closes. CMS will not be able to accept requests for exemptions until the final rule is released.

The proposed rule establishes October 1, 2011 as the deadline for the submission of requests for exemption from the 2012 “payment adjustment.”

According to the proposed rule, the request will need to include a detailed explanation of how the particular “significant hardship” exemption sought applies to the physician. CMS provides the following examples:

  • If the request is based on a statute or regulation restricting eRx, the physician must cite the particular legal provision and describe how it restricts his or her ability to e-prescribe.
  • If the physician invokes the limited-prescribing exemption, he or she must provide the number of prescriptions written during the January 1-June 20 period.

The Agency will be able to request additional supporting information. Its decisions will be made case by case and will not be appealable.

If you intend to rely on one of the four newly proposed exemptions, bear in mind that they might change or be eliminated. Not submitting the claims for at least ten visits involving eRx before the end of June is thus a gamble – but in all probability a very small gamble for anesthesiologists and pain physicians, rather few of whom will meet the 100-visit and 10% of allowable charges minimums.

CMS estimates that 209,000 eligible professionals could potentially be subject to the 2012 payment adjustment if they do not become eligible providers – or obtain exemptions -- based on claims data. In 2010, however, 100,444 professionals participated in the eRx Incentive Program. The technology has certainly taken hold in other specialties. In its National Progress Report, Surescripts indicates that nearly half of all cardiologists, family physicians and internists are actively e-prescribing:

We hope that eRx technology will develop to the point where it is as useful a tool for our specialty as it appears to be for those listed in the table above.

With best wishes,

Tony Mira
President and CEO


P.S. The American Society of Anesthesiologists is asking for member feedback on the use of ultrasound in anesthesia practice, according to an ASA release.

The survey includes questions on how ultrasound is used in anesthesia practice, including whether ultrasound is used for vascular access and regional anesthesia. If you are an ASA member, please complete the survey here.