A new government report details how a Medicare program that promotes electronic prescribing turned the corner from reward to penalty. In 2011, the Centers for Medicare & Medicaid Services (CMS) bestowed $285 million in bonuses on some 174,000 clinicians who electronically transmitted prescriptions to pharmacies, the agency stated in a report issued last week. Of those clinicians, almost 34,000 belonged to group practices that collectively rather than individually qualified for $17 million worth of incentive payments. The number of these "successful electronic prescribers" in 2011 doubled from the year before, and the total payout increased 5% even though the individual bonus decreased from 2% of Medicare reimbursement to 1%. The average payment was $1912 per clinician and $6609 per practice. That was motivation by carrot. Then came the stick. In 2012, 136,000 clinicians saw their Medicare reimbursement reduced by 1% because they were not bonus-qualifying e-prescribers in the first half of 2011, according to the CMS report. It was the debut of what CMS euphemistically calls a "payment adjustment" in its incentive program. The casualties in 2012 included some 24,000 family physicians, 21,000 internists, and 9000 nurse practitioners. Table 1. Specialties Hardest Hit by the 2012 E-Prescribing Penalty

Source: CMS Another 544,000 clinicians avoided the e-prescribing penalty in 2012, either because they came under various automatic exclusions, received a hardship exemption, or reported a token number of e-prescriptions in the first half of 2011 that did not qualify for a bonus. This year is the last [I1]one in which clinicians can receive an e-prescribing bonus, now at 0.5% of Medicare reimbursement. To earn it, they must meet the criteria for successful e-prescribing during 2012. Meanwhile, the penalty has grown to 1.5% this year for clinicians who were not successful e-prescribers in 2011 or who failed to generate at least 10 e-prescriptions in the first half of 2012. In 2014, the finale of the incentive program, the penalty increases to 2%. Like Hockey, Medicare Has Lots of Penalties In another Medicare incentive program called the Physician Quality Reporting System (PQRS), some 267,000 clinicians in 2011 received $262 million in bonuses on an individual or group-practice basis — mostly the former — for reporting their performance on measures such as screening patients for unhealthy alcohol use and vaccinating seniors against pneumonia. Median incentive payments to individuals ranged from $3009 for radiologists to $6.48 for certified nurse midwives, according to CMS. Table 2. Top Specialties to Receive Medicare Bonus in 2011 Under PQRS

*Specialty totals do not include clinicians who belonged to group practices that qualified for a PQRS bonus in their own right. Source: CMS The agency did not lower anyone's Medicare reimbursement in 2011 or 2012 for not participating in PQRS. However, this pay-for-reporting program will enter its penalty phase in 2015, when a 1.5% Medicare pay cut will hit clinicians who fail to satisfactorily submit quality data through PQRS for 2013. The penalty increases to 2% in 2016 and beyond. Physicians face additional Medicare penalties in 2015. That year, the government's program to promote "meaningful use" of electronic health record systems will impose a 1% pay cut on physicians who flunk its digital standards. And 2015 is when CMS introduces its Physician Feedback/Value-Based Payment Modifier Program. This pay-for-performance program, created by the Affordable Care Act (ACA), will raise or lower fee-for-service rates with a "value-modifier" that reflects the quality and cost-efficiency of a clinician's services. CMS will apply the value modifier only to practices of 25 or more physicians in 2015 and limit the penalty to 1%. The ACA requires that all physicians be subject to the value modifier in 2017.