• A
  • |
  • A
  • Text size

Medicare ePrescribing Incentive/Penalty Program

Changes to Medicare ePrescribing Program and New Ways to Avoid a 2013 Penalty
At the AMA’s urging, in the 2012 physician fee schedule rule, the Centers for Medicare & Medicaid Services (CMS) made several improvements to the Medicare e-prescribing program. In summary, CMS: (1) added two hardship exemption categories tied to participation in the meaningful use electronic health record (EHR) incentive program making it easier to avoid e-prescribing penalties in 2013 and 2014; (2) established a review/appeals process so that physicians encountering problems associated with the e-prescribing incentive and penalty programs can request CMS’ review of their case; and (3) lowered the e-prescribing reporting requirement for eligible group practices comprised of 2-24 health care professionals from 225 to 75. In addition, CMS is updating certain e-prescribing technological standards under Medicare Part D to improve e-prescribing functionalities.

Learn more about the changes to the Medicare e-prescribing program and Part D e-prescribing standards.


In January 2009 the Centers for Medicare & Medicaid Services (CMS) began offering eligible providers incentive payments for their use of an electronic prescribing (ePrescribing) system to prescribe for Medicare patients. As established in law, for 2009 and 2010, ePrescribing incentive amounts were 2 percent of a provider’s total estimated allowed charges for covered professional services during the reporting period (one calendar year). The incentive amount was reduced to 1 percent in 2011 and 2012 and will be 0.5 percent in 2013.

Eligible professionals who were successful electronic prescribers received an average bonus payment of just over $3,000 (and $14,501 per practice) from the ePrescribing Incentive Program in 2009 and $3,836 in 2010.

Steps to Take in 2013 to Get Incentive and Avoid 2014 Penalty
For 2013 the incentive payment is equal to 0.5 percent of total Medicare Part B allowed charges.

  • The CMS ePrescribing program has two reporting periods: 2014 Penalty (January 1 to June 30, 2013) and 2013 incentive (January 1 - December 31, 2013).
  • How to get the 2013 Incentive: Eligible professionals need to report 25 separate electronic prescribing events during the reporting period (2013 calendar year) to receive the incentive (successful e-prescribers receive a check in 2014)
  • How to avoid the penalty in 2014: Eligible professionals need to report 10 separate electronic prescribing events by June 30, 2013 to avoid the 2014 penalty.
  • Data may be reported in three ways: 1) to CMS via Medicare Part B claims; 2) to a qualified registry; or 3) to CMS via a qualified electronic health record (EHR) product. CMS has posted a list of qualified registries and qualified EHR vendors and products for the 2012 Electronic Prescribing Incentive Program on its website. View the CMS slide deck on ePrescribing program (slides 4-17).

Steps to Take in 2013 to Get Incentive and Avoid 2014 Penalty

Hardship Categories
Below are the hardship categories available to physicians. Physicians should note that CMS has also added two hardship categories associated with those participating in the Meaningful Use of Electronic Health Records Program. Physicians do NOT need to apply for a hardship related to the Meaningful Use hardship exemptions – CMS will automatically determine if they meet them. These hardship exemption categories include:

  • Inability to electronically prescribe due to state, or federal law, or local law or regulation;
  • The eligible professional prescribes fewer than 100 prescriptions during a 6–month payment adjustment reporting period;
  • The eligible professional practices in a rural area without sufficient high-speed Internet access (G8642); and
  • The eligible professional practices in an area without sufficient available pharmacies for electronic prescribing (G8643).
  • (New) Eligible professionals who achieve meaningful use during certain eRx timeframes. For the 2013 eRx payment adjustment, this will include any eligible professional who achieved meaningful use during an applicable reporting period in 2011 or 2012 and has attested to this by January 31, 2013.
  • (New) Eligible professionals who demonstrate intent to participate in the EHR Incentive Program and adoption of Certified EHR Technology by registering for the EHR Incentive Program by January 31, 2013. To avoid a penalty in 2013, a physician who is demonstrating meaningful use for the first time must register to participate in the EHR meaningful use incentive program by registering for the program between January 2, 2012 and January 31, 2013, and adopt certified EHR technology. Please note: EHR Incentive Program participants must provide their entire EHR Certification Number in the CMS EHR Certification ID field during registration to receive this hardship. If an eligible professional previously registered for the EHR Incentive Program but did not supply the EHR certification Number for their EHR product at that time, and has not since achieved meaningful use, they need to go back and add that piece of information to their registration before January 31, 2013.

Tips for Avoiding a Penalty

  • Retain Documentation: Retain any correspondence from the QualityNet Help Desk or CMS associated with the incentive or penalty including the email from CMS notifying those who filed and received a hardship exemption.
  • File Hardships under Personal NPI: Physicians who applied for an exemption are required to submit their individual National Provider Identifier (NPI).
  • Talk to your Vendor: There have been some cases where vendors/billers/clearinghouses have inappropriately removed the G code - G8553 - from a physician's Medicare Part B claims thinking that the G-code was reported in error. Some vendors/billers/clearinghouses do not allow you to report a code with a zero value. Please make sure your vendors/billers/clearinghouses understand why you are including the G8553 code on your claims and make sure that they do not remove the G8553 code from your Medicare Part B claims. NOTE: Medicare does not permit you to resubmit a claim simply for the purpose of adding an e-prescribing G code.
  • Review your Remittance Advice: Remember to review your remittance advice regularly to ensure you receive the N365 code when submitting the G8553 codes on your Medicare Part B claims. The N365 code is your indication that the G8553 code passed into the Medicare National Claims History (NCH) database

Medicare ePrescribing 2012 Feedback Reports Available

Doctors and group practices who submitted data for the 2012 Electronic Prescribing (eRx) Incentive Program can now access their 2012 eRx Incentive Program Feedback Reports. You can access the report one of two ways:

  1. Taxpayer Identification Number (TIN)-level reports are available for download on the Physician and Other Health Care Professionals Quality Reporting Portal (Portal) via QualityNet. TIN-level reports on the Portal require an Individuals Authorized Access to CMS Computer Services (IACS) account. IACS Quick Reference Guides are available on the Portal and these guides provide step-by-step instructions on how to request an IACS account and access the Portal.
  2. National Provider Identifier (NPI)-level reports can be requested through the Communication Support Page by creating a NPI-level feedback report request. The report will be sent electronically within 2-4 weeks to the email address you provide in your request.

Distribution of eRx incentive payments to EPs and group practices who successfully participated in the program in 2012 is scheduled to begin in the fall of 2013. Physicians / practices can an informal review of their performance and these will be accepted beginning November 1, 2013 through February 28, 2014. For more information about how to request an informal review, please read the 2012 eRx Incentive Program Informal Review Made Simple fact sheet. For other questions related to the eRx Incentive Program, physicians should contact the QualityNet Help Desk at 866-288-8912 (TTY 1-877-715-6222) or qnetsupport@sdps.org. They are available Monday through Friday from 7am-7pm CT.

Use of Qualified ePrescribing Technology

To be eligible for the incentive, you must use qualified ePrescribing technology. A qualified ePrescribing system is one that is capable of all of the following:

  1. Generating a complete, active medication list incorporating electronic data received from applicable pharmacies and pharmacy benefit managers if available
  2. Selecting medications, printing prescriptions, electronically transmitting prescriptions and conducting provider notifications (that is, signals to warn the prescriber of possible undesirable or unsafe situations including potentially inappropriate dose or route of administration of a drug, drug-drug interactions, allergy concerns, or warnings and cautions).  This functionality must be enabled.
  3. Providing information related to the availability of lower cost, therapeutically appropriate alternatives (if any). The ability of an electronic prescribing system to receive tiered formulary information, if available, would suffice for this requirement for reporting the electronic prescribing measure during the reporting periods occurring in CYs 2012 and 2013 until this function is more widely available in the marketplace.
  4. Providing information on formulary or tiered formulary medications, patient eligibility and authorization requirements received electronically from the patient's drug plan (if available). For reporting periods that occur in CYs 2012 and 2013, CMS will allow eligible professionals to use a system that meets all of the four above criteria OR they may choose to "Certified EHR Technology."

Reporting ePrescribing Activity

Eligible professionals must report prescribing activity using a qualified ePrescribing system. Follow these three steps to report ePrescribing activity and receive the incentive:

  • Step 1: Determine the eligibility of the patient encounter. Consider the list of Current Procedural Terminology (CPT®) codes. A list of codes is included in the CMS ePrescribing Measure Specifications, which identifies applicable services.
  • Step 2: Document the patient encounter on the Medicare Part B claim. All measure-specific coding should be reported on the same claim.
  • Step 3: Report G-code G8553 when a patient visit results in placing at least one electronic prescription.

Can I qualify for ePrescribing Incentives, EHR Incentives and PQRS Incentives?

The law allows eligible physicians to receive incentives under both the ePrescribing Incentive Program and the Physician Quality Reporting System (PQRS). However, a physician is not permitted to receive incentives under both the ePrescribing and Electronic Health Record Incentive program. A physician may receive incentives under PQRS and the EHR program.

Note: It is important to realize, however, that while a physician is not permitted to receive incentives under both the ePrescribing and EHR incentives programs, eligible physicians who participte in the EHR incentive program must report 10 instances of ePrescribing using the applicable G code in order to avoid a penalty under the ePrescribing program.

ePrescribing incentive program resources
AMA Advocacy on ePrescribing