2011 Medicare e-Prescribing Incentives and 2012-2013 Medicare e-Prescribing Penalties

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) authorized a new and separate federal incentive program for eligible professionals (EPs) who are successful electronic prescribers.  This incentive is in addition to the electronic health record (EHR) program and the Physician Quality Reporting System (PQRS) program.

Providers could qualify for multiple incentive programs.  However, within the same year, providers could only qualify for the Medicare EHR incentive program OR the Medicare e-Prescribing incentive  program, not both.  Therefore, it would be advisable to participate for the e-Prescribing incentive program for 2011 and then apply for the Medicare EHR incentive program in the following year.  If the provider chooses to participate in the MediCaid EHR incentive program and the Medicare e-Prescribing incentive program in the same year, the qualified provider is eligible to receive incentives under BOTH programs.

Benefits of e-Prescribing

First, e-Prescribing is offered as a way to prevent medication errors that arise due to difficulties in reading or understanding handwritten prescriptions.  In addition, e-Prescribing could reduce adverse drug events (ADEs) by making information such as drug interactions and contraindications available to prescribers at the time they are preparing a prescription.  Finally, e-Prescribing may reduce patients’ out-of-pocket costs by placing formulary, coverage and copayment information at prescribers’ fingertips.

Reporting Period

The reporting period for the 2011 e-Prescribing incentive program will be for the entire 2011 calendar year (January 1, 2011 through December 31, 2011)

Incentive Amount

The 2011 Medicare e-Prescribing incentive program provides an incentive payment to eligible physicians who successfully e-Prescribe medications in 2011 equal to 1% of their total Medicare payments for the year.  For example, if you bill Medicare $100,000 in allowable charges in 2011 and successfully report on e-Prescribing, you would receive $1,000.

Year     Incentive Amount

  • 2011     1.0%
  • 2012     1.0%
  • 2013     0.5%
  • 2014     0.0%

Note: Payment bonuses are made after the conclusion of the calendar year in which eligible physicians e-Prescribe for their Medicare patients, not as an up front payment.

Reporting Requirements

To participate in the 2011 e-Prescribing incentive program, individual eligible physicians may choose to report on their adoption and use of a qualified e-Prescribing measure, G code, G8553.

Sample Claim Form With G-Code

In order to receive incentive payments for e-Prescribing in 2011, eligible physicians must report the e-Prescribing G-code, G8553, at least 25 times on their claim forms. At least 10 of the 25 claims should be reported between January 1, 2011 through June 30, 2011 reporting period.


According to MIPPA, physicians who are eligible but choose not to participate in the 2012 or 2013 Medicare e-Prescribing incentive program, the following penalties would apply based on their allowable charges for the year:

Year     Penalty Amount

  • 2011     -0.0%
  • 2012     -1.0%
  • 2013     -1.5%
  • 2014     -2.0%

CMS is basing the 2012 penalties on e-Prescribing activity that occurs during January 1, 2011 through June 30, 2011, and the 2013 penalties on e-prescribing activity that occurs throughout 2011.  To avoid penalties in 2013, an eligible physician must e-Prescribe and report the e-Prescribing G-Code, G8553, at least 10 times for applicable office visits and services for the January 1, 2011 through June 30, 2011 reporting period on Medicare claim forms (report at least 25 times throughout 2011 to avoid penalties in 2013).

Exceptions to Penalty for non-Participation

The 2012 and 2013 e-Prescribing penalty will not apply to:

  • An eligible physician who has less than 100 claims for dates of service between January 1, 2011 through June 30, 2011.


  • An eligible who is not a physician, nurse practitioner or physician assistant as of June 30, 2011;
  • An eligible physician for whom office visits and other services listed in the CMS e-Prescribing measure specifications represent less than 10% of their allowed charges in the first six months of 2011.

Reference: http://www.cms.gov/eRXincentive

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