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Don’t let the office get caught in Medicare’s pay cuts

e-scripting, EHRs, and value modifiers

Medicare has been offering a lot of incentives for technology use and quality measures. But those same incentives have their dark side – payment cuts for noncompliance.

Here are the three cuts to be dodging right now. And along with them is the unavoidable 2% cut brought about by sequestration.

#1: the 2% cut on e-scripting

Most imminent is the cut that gets a yes or a no on June 30, 2013. That’s the drop dead deadline for reporting electronic prescribing.

January through June of 2013 has been the last window open for e-scripting to avoid it. Any provider who is eligible for e-scripting and who doesn’t show success by that time will see a 2% cut in Medicare payments in 2014. After next year, however, the penalty will disappear.

The reporting requirements for the six-month period are these:

  • individual providers: 10 e-script events via claims
  • groups of 2-24 providers: 75 e-script events via claims
  • groups of 25-99 providers: 625 e-script events via claims
  • groups of 100+ providers: 2,500 e-script events via claims.

The cut will not apply to these, however:

  • providers who were successful prescribers during 2012
  • providers who have not had at least 100 Medicare Part B encounters or at least 10% of Part B charges that applied to e-scripting during this past six months
  • providers who don’t have prescribing privileges and reported G8644 on at least one claim this year
  •  providers who submitted 10 or more e-scripts
  •  providers who achieved meaningful use requirements during all of 2012 or the first six months of this year. (The attestation for this year has to be done by June 30, 2013.)

Neither will it apply for groups that

  • were successful e-scribers during 2012
  • have not had at least 10% of their Part B charges applying the e-scripting during the past six months
  • achieved meaningful use during 2012 or during the first six months of this year. (Again, the attestation for this year has to be done by June 30, 2013.)

#2: the 2%+ cut on EHRs

There’s also meaningful use to worry about. It applies to the electronic health record or EHR incentive program.

The penalties begin in 2015 with a 1% pay cut and continue on to a 2% cut in 2016 and a 3% cut for each year thereafter.

What’s more, if fewer than 75% of providers are meaningful users by 2018, everybody’s payments will go down by 1% each year thereafter, with the maximum amount set at 5%.

Providers will have to show meaningful use each year to avoid the next year’s cut. The requirements for avoiding the first cut in 2015 are these:

  • Providers who started EHR participation in 2011 or 2012 have to show meaningful use for each of those years.
  • Providers who start this year have to show meaningful use for a 90-day reporting period during this year.
  • Providers who begin next year will have to show meaningful use for a 90-day reporting period. The reporting period has to occur in the first nine months of 2014, and the provider has to attest to meaningful use by Oct. 1, 2014.

#3: the 1% value modifier cut

The next pay change to watch out for comes from the value-based modifier, which is yet another part of health care reform.

The modifier will be used to cut payments for doctors who can’t show that their services are low in cost and high in quality, and that’s determined by participation in the physician quality reporting system, or PQRS. Doctors and other providers who are not successful with it will see their payments cut by as much as 1%.

There are two starting points, and doctors fall into them according to the size of their groups.

The first is for groups of 100 or more eligible professionals who bill Medicare under a single tax ID number. Their payments will be subject to change in 2015, and whatever pay changes they see then will be based on whether they are successful with quality reporting this year.

Doctors within a group can participate in PQRS as individuals, and groups may choose to put some doctors on individual status to avoid getting a negative modifier.

The second starting point is for individual providers. Their payments will not change until 2017, and the amount will be based on their quality reporting success in 2015.

Thus, by 2017, everybody’s Medicare payments can – but hopefully won’t – be lowered by the value modifier.

Groups and individual providers who are successful with PQRI will start off with a modifier of zero, which means there will be no change in their payments.

It’s downhill from there.

The only exempt doctors will be those participating in Medicare ACOs or who practice in federally qualified health centers and rural health clinics.

#4: the 2% sequestration cut

The sequester or government spending cuts began March 1, 2013, and apply through 2021. Under those cuts, Medicare spending is reduced by 2% each year.

And yes, sequestration will affect the incentive payments for EHR meaningful use. Those payments too will be reduced by 2%.

That reduction will apply to payments for any reporting period that ends April 1, 2013, or later. It won’t apply to payments for reporting periods that ended before April 1, 2013, of this year.

The sequester cuts apply only to Medicare HER incentives, not to incentives in state Medicaid programs.









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