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Medicare EHRIncentive Program,Physician QualityReporting Systemand e-PrescribingComparisonThis tip sheet identifies opportunities for certain Medicare providers to receive incentive payments for participating in important Medicare initiatives. In addition to the incentive programs mentioned in this tip sheet, Medicareproviders can maximize their overall Medicare payments by becoming a participating provider. The benefits ofMedicare participation include higher reimbursement compared to those providers who do not participate, directpayments to the Medicare provider because the claims are always assigned, and automatic forwarding of claimsinformation to Medigap insurers. More information on becoming a Medicare participating provider can be found .pdf on the Centers for Medicare & Medicaid Services(CMS) website.What incentive payments are available toMedicare eligible professionals?Provided a Medicare fee-for-service (FFS) eligible professional (EP) meets the eligibility and reporting requirementsfor each program, EPs may choose to participate in three payment incentive programs:A. Physician Quality Reporting System – The 2006 Tax Relief and Health Care Act (TRHCA) (P.L. 109-432)required the establishment of a physician quality reporting system, including an incentive payment for EPs whosatisfactorily report data on quality measures for covered professional services furnished to Medicare beneficiaries. CMS named this program the Physician Quality Reporting System.More information on the Physician Quality Reporting System program can be found at http://www.cms.gov/PQRI/01 Overview.asp on the CMS website.B. Electronic Prescribing (eRx) Incentive Program – Section 132 of the Medicare Improvements for Patients andProviders Act of 2008 (MIPPA) authorized a new and separate incentive program for EPs who are successfulelectronic prescribers as defined by MIPPA. This new incentive program, which began on January 1, 2009, isseparate from and is in addition to the Physician Quality Reporting System program. Eligible professionals donot need to participate in Physician Quality Reporting System to participate in the eRx Incentive Program. Note:Medicare EPs may not earn incentives under the eRx and Electronic Health Records incentive programsat the same time.1

More information on the eRx Program can be found athttp://www.cms.hhs.gov/ERxIncentive on the CMS website.C. Electronic Health Record (EHR) Incentive Program – TheAmerican Recovery and Reinvestment Act of 2009 (RecoveryAct) includes the Health Information Technology for Economicand Clinical Health Act, or the “HITECH Act,” which establishedprograms under Medicare and Medicaid to provide incentivepayments to EPs, hospitals, and critical access hospitals for the“meaningful use” of certified EHR technology. Note: MedicareEPs may not earn incentives under the eRx and ElectronicHealth Records incentive programs at the same time.More information on the EHR Incentive Program can be foundat http://www.cms.hhs.gov/Recovery/11 HealthIT.asp on theCMS website.Who is eligible to participate in eachincentive program?The definition of an EP varies by incentive program and is defined as follows:A. Physician Quality Reporting System and eRx Programs define an EP as—1. Physicians, defined as a doctor of medicine or osteopathy, a doctor of oral surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor;2. Practitioners, defined as a physician assistant, nurse practitioner, clinical nurse specialist, certified registerednurse anesthetist (and anesthesiologist assistant), certified nurse midwife, clinical social worker, clinical psychologist, registered dietician, nutrition professional, or audiologist; and3. Therapists, defined as a physical therapist, occupational therapist, or qualified speech-language therapist.To participate in the eRx Incentive Program, these professionals must additionally have prescribing authority.B. Medicare EHR Program defines an EP as— A doctor of medicine or osteopathy, a doctor of dental surgery ordental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor. Note: Hospital-basedEPs are not eligible to receive payments through the Medicare EHR Program.C. Medicaid EHR Program defines an EP as—Physicians, nurse practitioners, certified nurse-midwives, dentists,and physician assistants who practice in a Federally Qualified Health Center or rural health clinic that is led by aphysician assistant. Note: Hospital-based EPs are not eligible to receive payments through the MedicaidEHR Program.What are the time frames for each of the programs?A. The Physician Quality Reporting System incentive payments are available until 2014. Beginning in 2015, EPswho do not satisfactorily report Physician Quality Reporting System measures will be subject to payment adjustments.B. The eRx incentive payments are available until 2013. Beginning in 2012, payment adjustments will take effect forEPs who are not successful e-prescribers.C. The EHR Incentive Program begins in calendar year 2011. EPs can earn incentive payments for up to 5 years ifthey elect to receive their incentive payment through Medicare or up to 6 years if they elect to receive their incentive payment through Medicaid. However, no Medicare EHR incentive payments will be made to EPs whose firstyear of participation in the Medicare EHR Program is 2015 or later and beginning in 2015, payment adjustments2

will take effect for Medicare FFS EPs who cannot successfully demonstrate meaningful use of certified EHRtechnology. EPs can begin to participate in the Medicaid EHR Incentive Program until 2016, and there are currently no penalties for not demonstrating meaningful use for Medicaid EPs.What are the maximum incentive payments anEP can receive through each program?A. Physician Quality Reporting System – EPs who satisfactorily report on Physician Quality Reporting System quality measures will earn an incentive payment based on a percentage of their total estimated Medicare PhysicianFee Schedule (MPFS) allowed charges processed not later than 2 months after the end of the reporting period.For reporting year 2011, EPs who satisfactorily report Physician Quality Reporting System measures will earnan incentive payment equal to 1.0 percent of allowed charges. For reporting years 2012 through 2014, EPs whosatisfactorily report Physician Quality Reporting System measures will earn an incentive payment equal to 0.5percent of allowed charges. Additionally, for reporting years 2011 through 2014, EPs who satisfactorily reportPhysician Quality Reporting System measures can qualify to earn an additional 0.5 percent incentive paymentby, more frequently than is required to qualify for or maintain board certification status, participating in a maintenance of certification program and successfully completing a qualified maintenance of certification program practice assessment. Beginning in 2015, EPs who do not satisfactorily report under the Physician Quality ReportingSystem program will be subject to a payment adjustment equal to 1.5 percent of their Medicare PFS allowedcharges. The payment adjustment increases to 2.0 percent in 2016 and beyond.B. eRx – EPs who are successful e-prescribers can qualify to earn an incentive payment based on a percentage of their total estimated Medicare PFS allowed charges processed not later than 2 months after the end ofthe reporting period. For reporting years 2011 and 2012, EPs who are successful e-prescribers can qualify toearn an incentive payment equal to 1.0 percent of allowed charges. For reporting year 2013, EPs can qualify toearn an incentive payment of 0.5 percent of allowed charges. Beginning in 2012, EPs who are not successfule-prescribers in 2011 and do not qualify for a hardship exception will be subject to a payment adjustment equalto 1.0 percent of their Medicare PFS allowed charges. The payment adjustment increases to 1.5 percent in 2013and 2.0 percent in 2014.C. EHR – EPs may receive an incentive payment based on the criteria of the program under which they elect toreceive payment (Medicare or Medicaid). Before 2015, an EP may switch between the programs one time afterthe first incentive payment is initiated.1. Medicare – EPs who successfully demonstrate meaningful use of certified EHR technology during the relevant EHR reporting period may be eligible to receive an incentive payment, subject to an annual limit, equalto 75 percent of the EP’s allowed charges submitted not later than 2 months after the end of the calendaryear. The amount of the annual EHR incentive payment limit for each payment year will be increased by 10percent for EPs who predominantly furnish services in an areathat is designated by the Secretary (under section 332(a)(1)(A) ofthe PHS Act) as a geographic health professional shortage area(HPSA).2. Medicaid – EPs who adopt, implement, upgrade, or meaningfullyuse certified EHR technology in their first year of participationin the program and successfully demonstrate meaningful usein subsequent years may be eligible for an incentive paymentamount, subject to an annual limit.Table 1 illustrates the maximum EHR incentive payments available foreach program based on the year the EP first receives payment.3

Can EPs participate in multiple incentive programs at the same time?For the most part, EPs may participate in more than one incentive program at the same time. However, there aresome limitations. Table 2 outlines the programs that EPs may participate in at the same time:Table 1: Maximum EHR Incentive Payments by Program Based on the First Calendar Year (CY) for Which the EP Receives PaymentCY 2011CYCY 2012CY 2013CY 2014CY 2015CY 2016Medicare Medicaid Medicare Medicaid Medicare Medicaid Medicare Medicaid Medicare Medicaid Medicare Medicaid2011 18,000 21,2502012 12,000 8,500 18,000 21,2502013 8,000 8,500 12,000 8,500 15,000 21,2502014 4,000 8,500 8,000 8,500 12,000 8,500 12,000 21,2502015 2,000 8,500 4,000 8,500 8,000 8,500 8,000 8,500 21,250 8,500 2,000 8,500 4,000 8,500 4,000 8,500 8,500 21,250 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,50020162017 8,50020182019 8,50020202021Total(if EP doesnot switchprograms) 8,500 44,000 63,750 44,000 63,750 39,000 63,750 24,000 63,750 0 63,750 0 63,750NOTE: Medicare EPs may not receive EHR incentive payments under both Medicare and Medicaid.NOTE: The amount of the annual EHR incentive payment limit for each payment year will be increased by 10 percent for EPs who predominantly furnish servicesin an area that is designated as an HPSA.Table 2: Programs That EPs Can Participate in SimultaneouslyIf I am part of this program, can Istill participate in this program?PQRSeRxPQRSYes*eRxYesEHRYesEHRYes*Yes, but only if you elect to receiveEHR payments through Medicaid forthe year in questionYes, but only if you elect to receiveEHR payments through Medicaid forthe year in question*Providers participating in Physician Quality Reporting System (PQRS) cannot earn both an eRx incentive and an EHR incentive in the same year if theprovider elects to receive their EHR incentive payment through Medicare.What is the maximum incentive payment an EPcan receive in any one year?Provided an EP meets all the eligibility and reporting requirements for each incentive program, the maximum possibleincentive payment is dependent upon the following factors:A. The MPFS allowed charges processed not later than 2 months after the end of the calendar year;B. The payment year of the incentive payment;C. The program through which the EP receives an EHR payment (Medicare or Medicaid);D. The calendar year in which the EP first participates in the EHR Incentive Program;E. Whether the EP predominantly furnishes services in an HPSA; andF. Whether the EP participates in a maintenance of certification program and successfully completes a qualifiedmaintenance of certification program practice assessment more often than is required to qualify for or maintainboard certification status.4

Table 3 identifies the maximum incentive payments available by year depending on whether the EP chooses toparticipate in either the Medicare or Medicaid EHR Incentive Program. It also shows payment adjustments for notmeeting these criteria.Table 3: Payments Based on the First Year Calendar Year (CY) for Which an EP Receives an EHR Incentive Payment*EHR 18,000 21,250eRX Noteligible1%(of MPFS)PQRS 1PQRS1%(of MPFS)0.5%(of MPFS) 12,000Noteligible0.5%(of MPFS)0.5%(of MPFS) 8,000Noteligible0.5%(of MPFS)0.5%(of MPFS) 4,0000.5%(of MPFS)0.5%(of MPFS)0.5%(of MPFS) 8,5001%(of MPFS)0.5%(of MPFS)0.5%(of MPFS) 8,5000.5%(of MPFS)0.5%(of MPFS)0.5%(of MPFS) 8,5000.5%(of MPFS) 18,000Noteligible0.5%(of MPFS)0.5%(of MPFS) 12,000Noteligible0.5%(of MPFS)0.5%(of MPFS) 8,0000.5%(of MPFS)EHR 2,000 8,500 4,000PQRS-1.5%(of MPFS)EHR 0PQRS-2%(of MPFS)EHR 0PQRS-2%(of MPFS)EHR 0PQRS-2%(of S220142015201620172018201920202021*“ ¹²³CY 2011CY 2012CY 2013CY 2014CY 2015CY 2016Medicare” Medicaid Medicare” Medicaid Medicare” Medicaid Medicare” Medicaid Medicare” Medicaid Medicare” MedicaidEHREHR 0PQRS-2%(of MPFS)EHR 0PQRS-2%(of MPFS)EHR 0 21,2501%(of MPFS)0.5%(of MPFS)0.5%(of MPFS) 8,500 15,000 21,2500.5%Not0.5%(of MPFS) Eligible (of MPFS)0.5%0.5%0.5%(of MPFS) (of MPFS) (of MPFS)0.5%0.5%0.5%(of MPFS) (of MPFS) (of MPFS) 8,500 12,000 8,500 12,000 21,2500.5%0.5%0.5%0.5%0.5%(of MPFS) (of MPFS) (of MPFS) (of MPFS) (of MPFS) 8,500-1.5%(of MPFS) 8,500 2,000 0 8,500 0 8,500 0 0 0 0 0 8,500 0 0 8,500 8,500 0 8,500 0 8,500-2%(of MPFS) 0 0 0 8,500-2%(of MPFS) 0 0-2%(of MPFS) 0 4,000-2%(of MPFS)-2%(of MPFS)-2%(of MPFS) 0 0 8,500-2%(of MPFS)-2%(of MPFS)-2%(of MPFS) 0 8,500-2%(of MPFS)-2%(of MPFS) 0 4,000 8,000-1.5%(of MPFS)-2%(of MPFS)-2%(of MPFS) 0 8,500-1.5%(of MPFS)-2%(of MPFS) 0 8,000 0 0-2%(of MPFS) 0 0 0 0-1%(of MPFS)-1.5%(of MPFS)-2%(of MPFS)-2%(of MPFS)-3%(of MPFS)-2%(of MPFS)-4%(of MPFS)-2%(of MPFS)-5%(of MPFS)-2%(of MPFS)-5%(of MPFS)-2%(of MPFS)-5%(of MPFS)-2%(of MPFS)Medicare EPs subject to payment adjustments if they do notadopt EHRs before CY 20152011ProgramMedicare EPs subject to payment adjustments if they do notadopt EHRs before CY 2015CY 21,250 8,500 8,500 8,500 8,500 8,500 0-1.5%(of MPFS)-2%(of MPFS)-2%(of MPFS)-3%(of MPFS)-2%(of MPFS)-4%(of MPFS)-2%(of MPFS)-5%(of MPFS)-2%(of MPFS)-5%(of MPFS)-2%(of MPFS)-5%(of MPFS)-2%(of MPFS) 21,250 8,500 8,500 8,500 8,500 8,500-2%-2%-2%PQRS (of -2%MPFS)(of MPFS)(of MPFS)(of MPFS)EHR payments shown represent the maximum incentive payments available for each calendar yearMedicare incentive payments are based on Medicare Physician Fee Schedule (MPFS) allowed chargesPQRS and eRx incentive payments are based on MPFS allowed chargesIncentive for satisfactorily reporting quality measuresEPs who satisfactorily report PQRS measures can qualify to earn an additional 0.5% incentive payment by, more frequently than is required to qualify for ormaintain board certification status, participating in a maintenance of certification program and successfully completing a qualified maintenance of certificationprogram practice assessment.EPs who are not successful e-prescribers and do not qualify for a hardship exception will be subject to a payment adjustment equal to 1.0 percent of MPFSallowed charges in 2012. The payment adjustment increases to 1.5 percent in 2013 and 2.0 percent in 2014.In addition, the following examples are meant to illustrate some incentive payment possibilities when an EP participates in multiple incentive programs.5

Table 4: Breakdown of Incentive Payments for Scenario 1ScenariosScenario 1Dr. Smith submitted 50,000 in allowed chargesto Medicare during calendar year 2011. Duringthat same period, the doctor met all of the eligibility criteria to participate in the Medicaid EHRIncentive Program. In 2011, Dr. Smith satisfactorily reported data on Physician Quality ReportingSystem measures and qualified for a PhysicianQuality Reporting System incentive payment.Dr. Smith also qualified to earn an eRx incentivepayment because in addition to meeting the criteria for being a successful e-prescriber, more than10 percent of the doctor’s MPFS allowed chargeswere composed of services included in the eRxmeasure’s denominator. Also, during 2011 Dr.Smith adopted, implemented, or upgraded certified EHR technology and elected to receive hisEHR Incentive Program payment through hisState’s Medicaid program. How much in incentivepayments will Dr. Smith receive for 2011?For 2011, Dr. Smith will receive a total of 22,250in incentive payments. This payment is brokendown as shown in Table 4.Scenario 2Program e)eRxMedicareXX 500 5001% of the 50,000 in allowed chargessubmitted toMedicare1% of the 50,000 inallowed chargessubmitted X 21,250The maximum incentive payment availablethrough Medicaid 22,250Table 5: Breakdown of Incentive Payments for Scenario 2ProgramEP Participates X 500 2500.5% of the 50,000 in allowed chargessubmitted toMedicare0.5% of the 50,000 inallowed chargessubmitted X 8,500The maximum incentive payment availablethrough Medicare 9,250Table 6: Breakdown of Incentive Payments for Scenario 3ProgramEP Participates talIncentivePaymentAssume that Dr. Smith continues to participateXin the Physician Quality Reporting System, eRx, 500and EHR Incentive Programs in 2013. Dr. Smith 18,0000.5%of the 0Incentive 18,500earned an additional 0.5 percent Physician Qual- Payment 50,000 in alThe maximum incentiveNot eligible forlowed chargespayment availableity Reporting System incentive payment becauseAmounteRx paymentsubmitted tothrough Medicarein 2013 he (1) satisfactorily reported PhysicianMedicareQuality Reporting System measures and (2)more frequently than is required to qualify for or maintain board certification status: (a) participated in a maintenanceof certification program and (b) successfully completed a maintenance of certification program practice assessment.His Medicare allowed charges are still 50,000. He continues to elect to receive his EHR incentive payment throughMedicaid and demonstrates meaningful use in 2013. How much in incentive payments will Dr. Smith receive for2013?For 2013, Dr. Smith will receive a maximum incentive payment of 9,250. This payment is broken down as shown inTable 5.Scenario 3Assume that all the information is the same as in Scenario 1 except Dr. Smith does not meet all of the eligibility criteria to participate in the Medicaid EHR Incentive Program so he demonstrates meaningful use of certified EHR technology and chooses to receive EHR incentive payments through Medicare. He cannot receive both the eRx incentivepayment and the EHR incentive payment through Medicare so, in this scenario, Dr. Smith’s incentive payments for2011 would total 18,500. This is broken down as shown in Table 6.ICN# 903691 (November 2010)This fact sheet was prepared as a service to the public and is not intended to grant rights or impose obligations. This fact sheet may contain references or links to statutes,regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law orregulations. We encourage r eaders to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents.6