CMS Releases Final Rule on the 2012 Medicare E-Prescribing Penalty Program

The Centers for Medicare and Medicaid Services (CMS) this week released the Final Rule on the 2012 Medicare e-prescribing penalty program. The NCMS has learned that changes reflected in the Final Rule involved issues that were raised with CMS Administrator, Donald Berwick, MD, after the proposed rule was published in June. However, the Final Rule does not include an additional reporting period in 2012 as recommended by the AMA.

AMA says the Final Rule does provide more flexibility under the exemption categories so that more physicians can be eligible for an exemption to avoid the 2012 e-prescribing penalty, which is scheduled to take effect on January 1, 2012. The penalty for not successfully participating in the e-prescribing program or not filing for an exemption is a 1 percent payment reduction based on the 2012 Medicare fee schedule amounts during the year.

Final exemption hardship categories for eligible physicians to avoid the 2012 Medicare e-prescribing penalty are:

  • The physician’s practice is located in a rural area without high speed internet access.
  • The physician’s practice is located in an area without sufficient available pharmacies for e-prescribing (CMS added more examples including natural disaster caused disruption of e-prescriptions between physician offices and pharmacies).
  • The physician is registered to participate in the Medicare or Medicaid EHR Incentive Program and has adopted Certified EHR Technology by October 1, 2011, and prior to the time the physician requests an exemption.
  • Inability to electronically prescribe due to local, state or federal law or regulation (CMS clarifies that physicians who mainly prescribe narcotics, but due to certain limitations cannot submit these prescriptions electronically, can apply for this exemption category).
  • Limited prescribing activity (physicians who do not prescribe on a regular basis may apply for this exemption).
  • Insufficient opportunities to report the e-prescribing measure due to limitations of the measure’s denominator (physicians who do not e-prescribe on the service date can apply for this exemption).

Physicians can apply for more than one exemption category if a combination of the categories apply to their particular hardship. CMS has extended the deadline to apply for an exemption to November 1, 2011, but the NCMS strongly encourages physicians to apply for an exemption as soon as the Web-based portal is available to avoid claims processing. The NCMS will alert members as soon as the portal is available.

Instructions for accessing the Web-based tool to apply for an exemption will be available on CMS’ E-Prescribing Incentive Program website at

Individual physicians must apply on-line via a Web-based tool (you cannot submit a request via mail, e-mail or fax) for an exemption(s) by no later than November 1, 2011, in order to avoid the January 1, 2012, Medicare e-prescribing penalty. Physicians are required to include the following information in their exemption request:

  • Identifying information such as TIN, NPI, name, mailing address, and e-mail address of all affected eligible professionals
  • The significant hardship exemption category (ies) that apply
  • A justification statement describing how compliance with the requirement for being a successful e-prescriber for the 2012 e-prescribing penalty program during the reporting period resulted in a significant hardship to the eligible physician
  • An attestation of the accuracy of the information provided.

Group practices already participating in the 2011 e-prescribing group practice reporting option that wish to submit an exemption request must submit their request via mailed letter (you cannot submit a request on-line) containing all of the information necessary for the exemption request. The letter must be postmarked no later than November 1, 2011. More information on how group practices may request exemptions by mail, including the address, is available at

Questions about the use of the Web-based tool can be directed to the Quality Help Desk: 1-866-288-8912 or by email at [email protected]. Further information on the Quality Help Desk is available at

Click here to read the Final Rule (PDF).


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