E-Prescribing and EHR – The Stick is Coming

September 2011

By: Sarah E. Swank

Maryland Physician Magazine

This article originally appeared in the September 2011 issue of Maryland Physician Magazine.

The phrase "the carrot and the stick" is often used to describe the two electronic health record (EHR) incentive programs - meaningful use and e-prescribing ( eRx). Currently, physicians who take Medicare patients may receive incentive payments from one of the programs, but in the future could face penalties soon. Some of you might not find this carrot that appetizing. Others might not know that the stick is coming sooner than you think. The confusing and complex laws related to the two incentive programs contributed to slowing the widespread adoption of EHR technology among physicians. Below is a summary of the two incentive programs and what you need to know before penalties begin.

eRx vs. Meaningful Use

eRx allows physicians to transmit electronic prescriptions to a patient’s pharmacy without the need for paper prescriptions. Arguably, this technology cuts down on adverse events, drug interactions and patient allergic reactions. Incentive payments began in 2009 and Medicare payment adjustments begin as early as 2012 at 1% (2013 – 1.5% and 2014- 2%). The eRx program provides for significant hardship exemptions for physicians and group practices that are unable to meet the definition of successful e-prescribers to avoid these penalties.

The Meaningful Use program provides incentive payments to eligible professionals, hospitals, and critical access hospitals for the Meaningful Use of certified EHR technology, including e-prescribing. This program began in 2011 and concludes in 2016. Those physicians treating Medicare patients who do not participate by 2015 will see their payments adjusted. Physicians may see payment reduction starting at 1% and with increased penalties each year that Medicare eligible physician does not demonstrate Meaningful Use, to a maximum of 5%. The program will roll out in multiple stages. Currently, we are in Stage 1, with Stage 2 and 3 likely to be out soon. Perhaps a Stage 4 will follow if the earlier stages set aggressive functionality goals for EHRs. The Meaningful Use program also includes Medicaid incentive. Each state’s Medicaid Meaningful Use programs follows its own scheduled launch dates.

The Good News

CMS released proposed changes eRx program in response to a report out this winter from the General Office of Accounting (GOA), which stated that the duel incentive programs created inconsistencies and delays in technology development of electronic prescription systems. The technology requirements under the two programs are similar, but not identical. For example, similar to a qualified eRx system, a certified EHR system must be capable of checking for drug-to-drug interactions or whether a drug is on the formulary. Under the EHR incentive program, however, the certified EHR must be tested and certified by an authorized body approved by CMS, currently the Office of National Coordinator for Health Information Technology. In contrast, the eRx program does not rely on a third party’s certification of the system. Under the current eRx program, physicians often rely on information received from the EHR vendor to determine if the system meets the standards under that program. The new regulation proposes to add a new hardship category allowing those who have a certified EHR system to also meet the requirements of the eRx program to avoid the upcoming penalties.

The Bad News

EHR technology is expensive and duel federal standards are not only costly, but impractical. Free technology from hospitals and other providers likely trigger federal laws for physicians, who face civil and criminal penalties for violations. Although CMS solicited comments on its proposed regulation to align the two incentive programs, physicians subject to the eRx program still needed to meet the June 30, 2011 deadline for reporting or qualify for an exemption. Providers who delayed adoption of an e-prescribing system based in favor of participating in the meaningful use program will likely need to apply for the proposed “case-by-case” hardship exemption under the eRx program once finalized.

Now What?

EHRs are here to stay. EHRs not only support the healthcare reform goals of providing high quality and low cost care to patients. Providers will have to wait until this fall, when the proposed regulating aligning the two programs is due. It is a game of wait and see regarding the two programs, which should be out this fall. It is uncertain how aggressive the new stages for the Meaningful Use program and the required functionality of EHR systems will be. The big question is – Will the technology need to catch up with the law or will the law create a low bar for EHR to ensure widespread usage of the technology? Either way, watch out for that stick.