On July 15th, Congress enacted Medicare legislation that mandates and provides incentives for usage of electronic prescribing.

In addition to the postponing of the physician reimbursement rate cut and implementing other Medicare reforms, the Medicare Improvements for Patients and Providers Act of 2008 provides financial incentives for using e-prescribing.

The legislation only applies to providers who write a sufficient amount of Medicare prescriptions, which is either 10% of potentially eligible services or some other level the Secretary of HHS determines.

The legislation allows for hardship exceptions on a case-by-case basis, specifically using the example of a provider who doesn’t have broadband access to the internet.

Starting in 2009, physicians will receive incentives of 2% of their allowable Medicare charges for using e-prescribing to send Medicare prescriptions. The average estimated incentive for 2009 alone is between $2,000 and $4,500 per physician.

Starting in January of each year there will be a bonus percentage on allowable Medicare charges of:

• 2% per year in 2009 and 2010
• 1% per year in 2011 and 2012
• 0.5% per year in 2013

Starting in January of each year there will be a penalty percentage for unsuccessful e-prescribers on allowable Medicare charges of:

• 1% in 2012
• 1.5% in 2013
• 2% in 2014 and thereafter

The AMA has published details on the new legislation at the following link: http://www.ama-assn.org/ama/pub/category/6583.html