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Home / News & IndustryManaged Care Insight and Analysis
Updated: Feb. 17, 2009
Final 2009 Physician Payment Rule Implements New E-Prescribing Incentive Program

A new initiative for physicians to trade in their prescription pads and improve efficiency and safety when ordering drugs for patients with Medicare has been launched by the Centers for Medicare and Medicaid Services (CMS).

The initiative is included in the Medicare physician fee schedule final rule for calendar year 2009.

Widespread adoption of e-prescribing can eliminate medication errors that result from the misreading of handwritten prescriptions. Medicare beneficiaries may also have reduced out-of-pocket costs as e-prescribing facilitates communication between prescribers and pharmacies on lower-cost generic alternatives.

Physicians and other eligible professionals who adopt and use qualified e-prescribing systems to transmit prescriptions to pharmacies may earn an incentive payment of 2.0 percent of their total Medicare allowed charges during 2009. This incentive is in addition to a 2.0 percent incentive payment for 2009 for physicians who successfully report measures under the Physician Quality Reporting Initiative (PQRI), and both incentive payments are in addition to the 1.1 percent fee schedule update required by the Medicare Improvements for Patients and Providers Act of 2008. Thus, a physician who successfully reports under both the e-prescribing and PQRI initiatives could receive up to a 5.1 percentpay boost for 2009.

To participate in the e-prescribing incentive program, physicians will need to have a qualified e-prescribing system with certain required capabilities. Qualified systems must be able to:

  • Communicate with the patient’s pharmacy;
  • Help the physician identify appropriate drugs and provide information on lower cost alternatives for the patient;
  • Provide information on formulary and tiered formulary medications; and
  • Generate alerts about possible adverse events, such as improper dosing, drug-to-drug interactions, or allergy concerns.

To earn the incentive payment, physicians must successfully report one of three codes for the e-prescribing measure when submitting claims for specified types of medical visits, indicating either that:

  • They did not prescribe any medications during the visit;
  • They used e-prescribing for any medications prescribed during the visit; or
  • They did not use e-prescribing for a prescription because the law prohibits e-prescribing for the specific type of drug, such as a controlled substance.

CMS said payment rates for physician fee schedule services will be increased by 1.1 percent this year. Total Medicare spending under the 2009 physician fee schedule is projected at $61.9 billion, up 4 percent from the $59.5 billion projected for 2008.

In the final rule, CMS also adopts improvements to the PQRI, which allows eligible professionals to report quality measures relating to their clinical practice. Physicians who successfully report on their cases during 2009 will be able to earn an incentive payment, in addition to the e-prescribing incentive payment of 2.0 percent of their total Medicare allowed charges.

Address: Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244; (877) 267- 2323,

  This article was taken from:
The Executive Report on Physician Organizations

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