Below is a list of updates to clarify common issues CMS has heard from physicians and other health care professionals regarding the Medicare Electronic Prescribing (eRx) Incentive Program and the 2012 eRx payment adjustment.

Statutory Authority/Background

CMS is required to adjust the payments of eligible professionals who are not successful electronic prescribers beginning in 2012. This requirement is outlined in Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). CMS listed the requirements for being a successful e-prescriber for purposes of avoiding the 2012 payment adjustment in the 2011 Physician Fee Schedule final rule. In February 2012, all eligible professionals who did not meet these requirements were sent a letter notifying them of this fact.

Significant Hardship Exemption Requests

In response to stakeholder feedback, CMS also published a standalone eRx rule in September 2011 to provide additional circumstances under which eligible professionals would qualify for hardship exemptions. Eligible professionals initially had until November 1, 2011, to submit a request for a hardship exemption for the 2012 eRx payment adjustment via the newly-created Quality Reporting Communication Support Page; this deadline was later extended to November 8, 2011. CMS finished its review of these requests in February 2012 and continues to notify requestors via email whether their request was approved or denied.

Questions and Concerns

Although there is no appeal or review process established for the eRx Incentive Program and payment adjustment, CMS encourages eligible professionals with questions or concerns about the eRx payment adjustment and hardship exemption requests to contact the QualityNet Help Desk. Through the QualityNet Help Desk, CMS is working with eligible professionals and CMS-selected group practices that have questions about eRx payment adjustments and/or hardship exemption decisions. CMS is handling all hardship exemption requests and any questions or concerns on a case-by-case basis. Contact the QualityNet Help Desk if you have issues relating to the eRx payment adjustment and/or the rationale for denial of your hardship exemption request. The QualityNet Help Desk can be reached Mon – Fri, 7 am to 7 pm CMT, at (866) 288-8912 or QNetSupport@sdps.org.

2013 & 2014 eRx Payment Adjustment

Please note that payment adjustments under the eRx Incentive Program run until 2014. For information on how to avoid the 2013 and 2014 eRx payment adjustments, please visit the Electronic Prescribing Incentive Program webpage and review MLN Matters Article #SE1206.

The Centers for Medicare & Medicaid Services (CMS) announced yesterday that they would again extend the enforcement discretionary period, allowing practices an additional 90 days to become fully compliant with the use of HIPAA 5010 transaction standards.

What this means for physicians is that while the implementation date of January 1, 2012, is still in effect, contractors will not reject claims submitted in the 4010 electronic formats until July 1, 2012.

CMA has also surveyed the major payors in California to understand whether they will require claims to be submitted in 5010 format on April 1. While some did require 5010 on January 1, others were allowing for contingencies until April 1. SFMS members will receive a quick reference guide with information on which major payors will require 5010 transactions on April 1 in the March SFMS eNewsletter (due out today).

SFMS/CMA encourages all physicians to continue working with their vendors, clearing houses and billing services to transition to the 5010 format as soon as possible. Offices that transmit directly must ensure their software is updated.

The 10-month postponement of cuts to Medicare physician payment rates leaves Congress in what some see as its toughest spot to date when it comes to preventing deep pay reductions.

Lawmakers missed a major opportunity to pass a long-term solution to the broken Medicare sustainable growth rate formula. The pursuit of yet another short-term patch makes attaining a permanent fix to the SGR in 2012 significantly more difficult, with the price of a repeal going even higher above the $300 billion mark and the added pressures of competing for legislative attention in a presidential election year.

A payroll tax reduction extension package approved by Congress and signed into law on Feb. 22 by President Obama also freezes Medicare doctor pay rates for the rest of 2012. Medicare pay was set to decrease by 27.4% on March 1 after Congress had postponed the SGR cut for only two months in December 2011. But keeping rates stable only through the end of the year means that pay is scheduled to decrease by an estimated 32% in January 2013.

AMA and CMA have strongly criticized the temporary fix. Organized medicine made a concerted bid for Congress to break the cycle of payment patches by using funds projected to be saved from winding down the wars in Afghanistan and Iraq to eliminate the SGR formula, which has threatened reductions to Medicare rates since 2002. But lawmakers rejected that strategy, instead passing legislation that spends roughly $20 billion to postpone the cut and extend other Medicare pay provisions for only 10 months, while increasing the cost of a permanent solution by about $25 billion.

What it takes to buy 10 months of Medicare pay relief

As part of the most recent Medicare physician pay patch, lawmakers used cuts to hospitals, labs and other areas to offset the $17.3 billion cost of freezing doctor rates for 10 months, as well as the cost of additional Medicare pay extenders in the measure.

• $6.9 billion through reduced funding to hospitals for unpaid Medicare co-pays and deductibles.
• $5 billion through reduced funding for the prevention and public health fund created by the health system reform law.
• $4.1 billion through rebased payments for hospitals serving a disproportionate number of low-income patients.
• $2.5 billion through rescinding enhanced Medicaid pay to Louisiana under the health system reform law.
• $2.4 billion through rebased payments for Medicare clinical laboratory services.

Source: American Medical News, February 27, 2012.

A federal court judge has cleared the way for nearly $200 million in awards to be disbursed to physicians through a settlement against UnitedHealth Group. This disbursement would settle claims from physicians for 15 years of artificially low payments the insurer paid for out-of-network health services. Physicians who filed a claim with UnitedHealth should expect to receive their check soon.

Spearheaded by the Litigation Center of the American Medical Association (AMA), the California Medical Association and other state medical societies, this decade-long legal battle exposed a fundamental conflict of interest at UnitedHealth. The Litigation Center’s work with organized medicine, state regulators and U.S. senators succeeded in calling into question the system for paying out-of-network medical bills, which has been controlled completely by insurers.

For more information about the settlement award distribution, click here.

The state of California announced that it will institute short-term payment delays to Medi-Cal institutional providers due to a severe cash flow shortage. Implementation of the delays is effective March 1, 2012 (the first check release date of March). Reimbursement to Medi-Cal institutional providers, except for clinics, designated public hospitals and local educational agencies, will be held per the schedule below:

• Payments scheduled for March 1 [electronic funds transfer (EFT) date of March 5] will be held until March 15 (EFT date of March 19), and will be paid along with all services normally scheduled for payment that week.

• Payments scheduled for March 8 (EFT date of March 12) will be held until March 22 (EFT date of March 26), and will be paid along with all services normally scheduled for payment that week.

• Payments to Medi-Cal non-institutional providers will not be held. Please note that the list below is limited to providers whose claims are processed by the ACS, the Medi-Cal fiscal intermediary.

To ensure implementation of this proposal, the Department of Health Care Services (DHCS) will hold reimbursement to the following Medi-Cal institutional providers:

• Adult Day Health Care Centers
• Assistive Device and Sick Room Supply Dealers
• Blood Banks
• Clinical Laboratories
• Fabricating Optical Laboratory/Prison Industry Authority
• Home Health Agencies
• Community Hospital Outpatient Departments
• Community Hospital Inpatient (with the exception of designated public hospitals)
• Long-Term Care (LTC) facilities
• Pediatric Subacute Care – LTC
• Ground Medical Transportation
• Genetic Disease Testing
• Air Ambulance Transportation Services
• Certified Hospice Service per Assembly Bill 4249
• Home and Community Based Services Nursing Facilities
• Mental Health Inpatient
• County Hospital Inpatient (with the exception of designated public hospitals)
• County Hospital Outpatient
• Multipurpose Senior Services Program
• Residential Care Facilities for the Elderly

The following institutional providers are exempt from the temporary payment withhold:

• Indian Health Clinics
• Rural Health Clinics
• Federally Qualified Health Centers
• Free Clinics
• Community Clinics
• Chronic Dialysis Clinics
• Multi-Specialty Clinics
• Surgical Clinics
• Exempt from Licensure Clinics
• Rehabilitation Clinics
• County Clinics Not Associated with a Hospital
• Birthing Centers – Primary Care Clinics
• Clinic Otherwise Undesignated
• Alternate Birthing Centers – Specialty Clinics
• Expanded Access to Primary Care Clinics
• Designated Public Hospitals
• Local Education Agencies

DHCS acknowledges that this difficult decision is painful for providers. SFMS/CMA is working with DHCS to mitigate the impact of this action on physicians.