Choosing not to participate in the CMS incentive programs

The Centers for Medicare & Medicaid Services (CMS) oversees several programs that offer eligible professionals (EP) incentives for successful participation and penalties for nonparticipation. These programs include the Electronic Prescribing (eRx) Incentive Program, the Physician Quality Reporting System (PQRS), and the Electronic Health Record (EHR) Incentive Program. The deadlines for enrollment in some of these programs are already in place, and others are drawing near.

To help surgeons successfully comply with the requirements associated with participating in these programs, the American College of Surgeons (ACS) has continued to make available new or updated information concerning each phase of the programs’ implementation in the Bulletin, on the ACS website, and in other ACS communications. This column summarizes the different reporting options available and what happens when surgeons and other EPs elect to not participate in the programs. Table 1 provides an overview of the incentives and penalties associated with the PQRS and eRx and EHR programs.

Table 1: Total CMS incentive programs incentives and penalties 2011 and beyond

Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
PQRS 1% 0.5% 0.5% 0.5% -1.5% -2% -2% -2% -2% -2% -2%
eRx 1% 1% -1% 0.5% -1.5% -2.% X X X X X X X
EHR- Medicare 2011:
$18,0002012:
$12,0002013:
$8,0002014:
$4,0002015:
$2,000
2012:
$18,0002013:
$12,0002014:
$8,0002015:
$4,0002016:
$2,000
2013:
$15,0002014:
$12,0002015:
$8,0002016:
$4,000
2014:
$12,0002015:
$8,0002016:
$4,000
-1% -2% -3% -4% -5% -5% -5%

What is the penalty if I do not participate in the eRx Incentive Program?

EPs who choose not to participate in the eRx Incentive Program and who do not qualify for an automatic exemption may be penalized starting in calendar year (CY) 2014. To avoid a 2014 eRx payment penalty of 2 percent of the Medicare Part B physician fee schedule amount for covered professional services, health care professionals must meet one of the following criteria:

  • Report electronically 25 times for denominator eligible visits from January 1 to December 31, 2012. Refer to Table 2 for a list of the denominator eligible codes.
  • Report electronically at least 10 times from January 1 to June 30, 2013, for any visit. The visit does not have to be associated with a denominator eligible code, but must be submitted in conjunction with a billable, covered procedure not associated with a global period.
  • Apply for a 2014 significant hardship exemption by June 30, 2013, once the portal opens in early 2013. See the sidebar for a list of the 2014 significant hardship exemptions.
  • Be automatically exempt from the eRx Incentive Program. EPs who meet any one of the automatic exemptions do not have to apply or submit anything to CMS. EPs will be automatically exempt from the 2014 eRx Incentive Program penalty if they meet any one of the following:
    • EP is a successful electronic prescriber during the 2012 eRx 12-month reporting period of January 1 to December 31, 2012
    • EP is not an individual with a medical degree, doctor of osteopathic medicine, podiatrist, nurse practitioner, or physician assistant by June 30, 2013
    • EP does not have at least 100 Medicare Part B physician fee schedule cases containing denominator eligible codes as listed in Table 2, for dates of service from January 1 to June 30, 2013
    • At least 10 percent or more of the EPs Medicare Part B physician fee schedule charges are not from denominator eligible codes for dates of service from January 1 to June 30, 2013
    • The EP does not have prescribing privileges, and reported G8644 on a billable Medicare Part B service at least once on a claim between January 1 to June 30, 2013

    Table 2. eRx measure denominator codes (eligible cases)

    90801, 90802, 90804, 90805, 90806, 90807, 90808, 90809, 90862, 92002, 92004, 92012, 92014, 96150, 96151, 96152, 99201, 99202, 99203, 99204, 99205, 99211, 99212, 99213, 99214, 99215, 99304, 99305, 99306, 99307, 99308, 99309, 99310, 99315, 99316, 99324, 99325, 99326, 99327, 99328, 99334, 99335, 99336, 99337, 99341, 99342, 99343, 99344, 99345, 99347, 99348, 99349, 99350, G0101, G0108, G0109

    What is the penalty for not participating in the PQRS program?

    EPs who choose not to participate or who are unsuccessful in their attempts to comply with the PQRS program face a payment penalty of 1.5 percent of the Medicare Part B physician fee schedule amount for covered professional services in CY 2015. EPs who are unable to satisfy any of the PQRS reporting requirements for this program in CY 2013 will be penalized in 2015. More information on the finalized PQRS reporting options is available in the 2013 Medicare physician fee schedule final rule found at www.ofr.gov/OFRUpload/OFRData/2012-26900_PI.pdf.

    Note that EPs may still qualify to receive incentive payments for successfully participating in the PQRS program in CY 2013 and 2014. EPs who satisfy the requirements may be eligible to receive an incentive payment of 0.5 percent of their total Medicare allowed charges in CY 2013 and a 0.5 percent bonus in CY 2014 if they continue to satisfy the PQRS requirements.

    What is the penalty for not participating in the Medicare EHR Incentive Program?

    EPs who choose not to participate in the EHR Incentive Program will be assessed a penalty of 1 percent of professional services covered under the Medicare Part B physician fee schedule in CY 2015. An EP can avoid this penalty by becoming a Stage 1 meaningful use provider by July 3, 2014, and attesting as such no later than October 1, 2014. To avoid the 2015 EHR penalty, EPs who have already achieved their first year of meaningful use must complete their full calendar year reporting in 2013.

    Note that EPs may still receive incentive payments for the Medicare EHR Incentive Program if they successfully meet the meaningful use requirements and complete their attestation to CMS by the specified date. EPs who began reporting Stage 1 requirements in CY 2011 or 2012 will be eligible for a full incentive payment of $44,000. EPs who begin reporting Stage 1 requirements in 2013 will be eligible to receive $39,000, and EPs who begin reporting in 2014 may qualify for a bonus of up to $24,000.

    How will the bonuses and penalties affect my bottom line?

    Each bonus payment is added to an EPs Medicare Part B fee schedule payment amount. For example, if an EP is eligible for bonus payments for all three programs in CY 2012 and has $100,000 in Medicare allowed charges, the EP would be eligible for a $18,500 bonus—a $500 bonus for the PQRS program, and an $18,000 bonus for the EHR Incentive Program—if the EP began participating in the EHR Incentive Program in 2012. An EP is also required to participate in the eRx program in order to avoid a penalty in 2014 by meeting the criteria required to gain an incentive payment, minimally report to avoid the penalty, or claim an exemption. However, if an EP is eligible to receive the Medicare EHR incentive bonus, he or she is not eligible to receive the eRx bonus. Therefore, an EP who successfully participates in the PQRS, EHR, and eRx programs in the scenario described above could expect a total of $18,500 between the EHR and PQRS incentives. Successful compliance with the eRx program requirements will result in the avoidance of future eRx program penalties Note that each program has a different distribution period for the payout. Therefore, an EP may not receive the incentive payments at the same time.

    Likewise, penalties are applied to an EP’s Medicare Part B fee schedule services. The last payment penalty for the eRx Incentive Program will be assessed in 2014, a year before the PQRS and EHR penalties begin. Hence, if an EP has $100,000 in Medicare allowable charges and is assessed an eRx penalty in 2014, the provider will see a reduction of $2,000. Additionally, if an EP has $100,000 in Medicare allowed charges and is unsuccessful in meeting PQRS and EHR requirements and is assessed the 2015 penalties for both programs, total Medicare Part B payments will be reduced $2,500 due to a $1,500 penalty for the PQRS program and a $1,000 penalty for the EHR Incentive Program. (Note that each program has a different time frame for assessment of the penalty.)

    What resources are available to assist with enrollment and participation in each program?

    The ACS is a professional partner of AmericanEHR Partners, which provides information on various EHR vendor ratings, podcasts that offer an overview of various components of the program, proposals from various vendors, disseminates e-newsletters, and more. To register with AmericanEHR, visit their website.

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