The Medicare e-prescribing incentive—a carrot and a stick

A how-to column on earning an additional $4,000 this year, and practical tips on choosing an electronic health record system.


An e-prescribing incentive program under Medicare could let physicians in a typical internal medicine practice to earn an additional $3,000 to $4,000 this year.

The incentive is limited to eligible professionals whose estimated allowed charges for defined “e-prescribing measure” procedural codes (generally office visit or consultation evaluation and management codes) are at least 10% of their total Medicare Part B Physician Fee Schedule allowed charges for the reporting period. Most internal medicine physicians and subspecialists easily meet this threshold.

The e-prescribing incentive in 2009 is 2% of the total allowed charges for professional services covered by the Medicare Part B Physician Fee Schedule. Incentive amounts for each successive year of the program will adjust to 2% in 2010, 1% in 2011 and 2012, and 0.5% in 2013.

Beginning 2012, physicians prescribing under Medicare who do not e-prescribe will face a penalty. Their total estimated Medicare Part B fee schedule amount during the year will be reduced by 1% for 2012, 1.5% for 2013 and 2% for 2014 and each subsequent year. A hardship exemption exists.

The e-prescribing system must:

  • generate an active medication list;
  • select medications, transmit prescriptions electronically, and warn the prescriber of possible undesirable or unsafe situations;
  • provide information on formulary or tiered formulary medications, patient eligibility, and authorization requirements;
  • provide information on lower-cost, therapeutically appropriate alternatives; and
  • use Medicare Part D messaging and interoperability standards.

The best way to determine if an e-prescribing system qualifies is to obtain written verification from the vendor. All EHR systems that have e-prescribing capability and were certified in 2008 by the Certification Commission for Healthcare Information Technology (CCHIT) meet these requirements. Systems certified by CCHIT in prior years may not qualify.

A specified set of service codes qualify, generally E/M office visit or consultation codes, with those in bold typically billed by internists (see Table).

Internists are expected to report one of a set of specific “G” codes indicating that they have a qualified e-prescribing system, whether or not they generated prescriptions using the system, and if not, why. The e-prescribing incentive “G” codes are:G8443, if you used a qualified e-prescribing system for all of the prescriptions,

G8445, if you had a qualified e-prescribing system, but didn't generate any prescriptions during this encounter, and

G8446, if you had a qualified e-prescribing system, but could not electronically submit one or more of the generated prescriptions because:

  • the prescription was for narcotics or controlled substances,
  • state or federal law required phoning in or printing the script,
  • the patient asked to phone in or print the prescriptions, and
  • the pharmacy couldn't receive an electronic transmission.

In order to obtain the incentive in 2009, you have to report one of the specific e-prescribing “G” codes on at least 50% of the occasions you submitted a claim for one of the specified e-prescribing services. The “G” code must be on the same claim form as the related service and should have a charge of $0.00.

CMS announced its intention to change the e-prescribing incentive measure in 2010 to remove the need for “G” code submissions for every applicable encounter. This administrative simplification is possible through pairing claims with Medicare Part D data.

More detailed information on the e-prescribing incentive is available on the College's e-prescribing Web site.