ePrescribing 2011: The Irony and the Ecstasy

The number of different government programs, and the length of the rules that describe how to take advantage of each of them, can be overwhelming. But one thing is eminently clear: the importance of ePrescribing in 2011. There are three compelling reasons to ePrescribe in the coming year:

  1. Physicians can earn a 1% bonus on their 2011 Medicare revenue. Aside from the patient-care and physician-efficiency benefits that ePrescribing offers, ePrescribing on at least 25 unique Medicare encounters in 2011 will qualify a physician for an additional 1% of that year’s Medicare Part B Fee-for-Service revenue under MIPPA (Medicare Improvements for Patients and Providers Act). That money would be received in the fall of the following year.

  2. 2011 ePrescribing activity protects physicians from the Medicare ePrescribing penalties in 2012 and 2013. Odd as it sounds, while bonuses for 2012 and 2013 will be based on successful ePrescribing in each of those years, penalties for those years will be assessed based on 2011 activity. To avoid penalties in 2012, (1% of Medicare revenue), physicians must report ePrescribing on 10 unique Medicare encounters between January and June, 2011. To avoid penalties in 2013 (1.5% of Medicare revenue), physicians must report at least 25 times during the full 2011 year.

  3. ePrescribing is a great way to begin the transition to an EHR, particularly if a physician intends to participate in the EHR incentives program (ARRA). ePrescribing is an integral part of the Meaningful Use requirements and—with the right software—a great way to begin the transition to a digital office.

Based on the above, I offer a few strategies for consideration. The rules, and the interplay between them, have created a number of consequences, that intended or not, can be used by physicians to their financial advantage:

  1. It is important to start ePrescribing early in 2011. Ironically, even if a physician meets the 25-prescription minimum and earns the 2011 incentive, he or she would still be subject to a penalty in 2012 if that ePrescribing activity—no matter how extensive—occurs only in the second half of the year. So at a minimum, ePrescribe 10 times in the first half of the year and 15 times in the second half.

  2. Since the rules (MIPPA and ARRA) do not allow collecting under both programs during the same year, physicians can maximize the combined revenue by earning the ePrescribing bonus in 2011, and waiting to begin participation in Meaningful Use until 2012. Beginning in 2012 still allows a physician to qualify for the full 5 years of EHR incentives ($44,000 as a Medicare provider).

  3. Another irony is that, although ePrescribing is integral to ARRA, it is possible to satisfy the measures for one program and not satisfy the requirements of the other in any particular year. The requirements differ, and the onus is on the physicians to meet each set of rules to qualify for the respective incentives.

As confusing as the above appears, it is actually even more so, because there are also some exceptions. Not surprisingly, there are organizations (MGMA and AMA, for example) actively petitioning the government to reconsider the basis for 2012 and 2013 ePrescribing penalties and asking for harmonization of the MIPAA and ARRA regulations. For further information on the implications for your practice, I invite you to take advantage of the educational resources available through SRSsoft by calling our Government Affairs Department: 201-802-1300 X 1229.

Preserving Physician Income in a Low-Margin Environment: EMR Strategy

A frequent concern I hear in my conversations with physicians is that they are challenged by increasingly harsh economic pressures. Healthcare reform, lower—or at best stagnant—reimbursement rates from government and private payers, and the higher proportion of lower-paying Medicare patients are reducing or capping practice revenue. At the same time, overhead costs are escalating unrelentingly, since employees still expect raises and other operating costs continue to rise. While the common perception is that physicians are not businessmen/women, they are in fact running small businesses; and now, more than ever, they need to focus on ways to maintain business viability in light of lower margins.

Physician Income Calculator

The above graph illustrates the economic challenges. Click on it to enter your own practice data and assumptions concerning anticipated growth or decline in reimbursement and expenses, and observe the effect on physician income—the green line. Given that physicians have no control over reimbursement rates, the only way to positively impact that green line is by effecting fundamental changes to practice operations—and the right EMR is critical to this end.

First, it is imperative to significantly reduce overhead—the orange line. Government programs that may, or may not, deliver short-term financial incentives do not address cost structure. What is needed is an EMR that delivers sustainable and significant reductions in the staff-to-physician ratio and more efficient management of all resources—depressing the orange line. Increasing revenue—the blue line—requires increases in physician productivity and patient volume. The challenge here is to wade through EMR marketing hype to identify the EMR that will actually shift the orange line down and the blue and green lines up.