DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 414 [CMS-3248-P]

RIN 0938-AR00 Medicare Program; Proposed Changes to th e Electronic Prescribing (eRx) Incentive Program

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

SUMMARY: This proposed rule would modify the 2011 electronic prescribing (eRx) quality measure (that is, the eRx quality m easure used for certain reporting periods in calendar year (CY) 2011), provide additional si gnificant hardship exemption categories for eligible professionals and group practices to request an exemption during 2011 for the 2012 eRx payment adjustment due to a significa nt hardship, and extend the deadline for submitting requests for consideration for the two significant hardship exemption categories for the 2012 eRx payment adjustme nt that were finalized in the CY 2011 Medicare Physician Fee Schedule (PFS) final rule with comment period.

DATES : To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on [ I n s e r t d a t e 6 0 d a y s a f t e r t h e d a t e o f

f i l i n g f o r p u b l i c i n s p e c t i o n a t O F R

. ]

ADDRESSES: In commenting, please refer to file code CMS-3248-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. You may submit comments in one of f our ways (please choose only one of theCMS-3248-P 2 ways listed): 1. Electronically . You may submit electronic comments on this regulation to http://www.regulations.gov . Follow the "Submit a comment" instructions. 2. By regular mail . You may mail written comments to the following address

ONLY:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3248-P, P.O. Box 8013, Baltimore, MD 21244-8013.

Please allow sufficient time for mailed comme nts to be received before the close of the comment period. 3. By express or overnight mail . You may send written comments to the following address ONLY:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3248-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 4. By hand or courier . Alternatively, you may deli ver (by hand or courier) your written comments ONLY to the following addresses prior to the close of the comment period:CMS-3248-P 3 a. For delivery in Washington, DC--

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201 (Because access to the interior of the Hube rt H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available fo r persons wishing to re tain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) b. For delivery in Baltimore, MD--

Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786-1066 in advance to schedul e your arrival with one of our staff

members. Comments erroneously mailed to the addr esses indicated as appropriate for hand or courier delivery may be delayed an d received after the comment period. For information on viewing public co mments, see the beginning of the

"SUPPLEMENTARY INFORMATION" section.CMS-3248-P 4

FOR FURTHER INFORMATION CONTACT: Christine Estella, (410) 786-0485.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public , including any persona lly identifiable or confidential business information that is included in a comment. We post all comments

received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.regulations.gov. Follow the search

instructions on that Web site to view public comments. Comments received timely will also be av ailable for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Cent ers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointm ent to view public comments, phone 1-800-743-

3951. I. Background Section 132 of the Medicare Improvement s for Patients and Providers Act of 2008 (MIPPA), Pub. L. 110-275, authorized the Secret ary to establish a program to encourage the adoption and use of eRx technology. Im plemented in 2009, the program offers a combination of financial incentives and paym ent adjustments to eligible professionals,

which are defined under section 1848(k)(3)(B) of the Social Secu rity Act (the Act). We understand that the term "eligible professiona l" is used in multiple CMS programs. However, for the purpose of this proposed ru le, the eligible professionals to whom weCMS-3248-P 5 refer are only those professionals eligible to participate in the eRx Incentive Program unless we specify otherwise. For more inform ation on which professionals are eligible to participate in the eRx Incentive Program, we refer readers to the Eligible Professionals page of the eRx Incentive Program section of the CMS Web site at: http://www.cms.gov/ERxIncentive/05_Elig ible%20Professionals.asp#TopOfPage . Under section 1848(m)(2)(C) of the Act, an eligible professional (o r group practice participating in the eRx group practice reporting option (GPRO)) who is a successful electronic prescriber during 2011 can qualify for an ince ntive payment equal to 1.0 percent of its total estimated Medicare Part B Physicia n Fee Schedule (PFS) allowed charges for covered professional services furnishe d during the 2011 reporting period.

In accordance with secti on 1848(a)(5)(A) of the Act, a PFS payment adjustment will begin in 2012 for those eligible prof essionals and group practices who are not successful electronic prescribers and will in crease each year through 2014. Specifically, under 42 CFR 414.92(c)(2), for covered profession al services furnished by an eligible professional during 2012, 2013, and 2014, if an elig ible professional (o r in the case of a group practice, the group practice) is not a succ essful electronic pres criber (as specified by CMS for purposes of the payment adjustme nt) for an applicable reporting period (as specified by CMS), then the PFS amount for such services furnished by such professional (or group practice) during the ye ar shall be equal to the app licable percent (99 percent for 2012, 98.5 percent for 2013, and 98 percent for 2014) of the PFS amount that would otherwise apply . For each y ear of the program thus far, we have established program requirements for the eRx Incentive Program in the annual Medicare PFS rulemaking, including the applicable reporti ng period(s) for the year and how an eligible professionalCMS-3248-P 6

can become a successful electroni c prescriber for the year. For example, we finalized the program requirements for qualifying for 2009 and 2010 eRx incentive payments in the CY 2009 and 2010 PFS final rules with comment period (73 FR 69847 through 69852 and 74 FR 61849 through 61861), respect ively. In the November 29, 2010 Federal Register (75 FR 73551 through 73556), we publishe d the CY 2011 PFS final rule with comment period, which set forth the require ments for qualifying for a CY 2011 incentive payment, as well as the requirements for the 2012 and 2013 eRx payment adjustments. Since publication of the CY 2011 PFS fina l rule with comment period, we have received a number of inquiries from stakehol ders regarding the eRx Incentive Program. Many stakeholders voiced concerns about di fferences between the requirements under the eRx Incentive Program and the Medicare Elec tronic Health Record (EHR) Incentive Program, which also requires, among other things , eligible professionals to satisfy an eRx objective and measure to be c onsidered a meaningful user of certified EHR technology ("eligible professional" is defined at 42 CFR 495.100 for pur poses of the Medicare EHR Incentive Program). (For more informati on regarding the EHR Incentive Program see the published Federal Register on July 28, 2010; 75 FR 44314 through 44588.) While Medicare eligible professiona ls and group practices cannot earn an incentive under both the eRx Incentive Program and the EHR Incen tive Program for the same year, eligible professionals will be subject to an eRx payment adjustment if they do not meet the requirements under the eRx Incentive Program , regardless of whether the eligible professional participates in and earns an incentive under the Me dicare EHR Incentive Program. Stakeholders claim that the requirements under both programs areCMS-3248-P 7 administratively confusing, cumbersome , and unnecessarily duplicative. On February 17, 2011, the Government Accountab ility Office (GAO) also published a report

which indicated that CMS should address the inconsistencies between the eRx Incentive Program and the EHR Incentive Program (G AO-11-159, "Electronic Prescribing: CMS

Should Address Inconsistencie s in Its Two Incentive Progra ms That Encourage the Use of Health Information Technology," available at http://www.gao.gov/products/GAO-11-

159 ). As a result of the above concerns and in accordance with Executive Order 13563, which directs government agencies to identi fy and reduce redundant, inconsistent, or overlapping regulatory requireme nts and, among other things , identify and consider regulatory approaches that re duce burden and maintain fl exibility of choice when possible, we are proposing to make changes to the eRx Incentive Program. As described further in section II.A. of the proposed rule, we are specifically proposing to modify the 2011 eRx quality measure (that is, the eRx quality measure used for certain reporting periods in CY 2011) and to create additional significant hardship exemption categories for the 2012 eRx payment adjustment. II. Provisions of the Proposed Regulations

A. Modification of the CY 2011 Elect ronic Prescribing Quality Measure

In the CY 2011 PFS final rule with comment period (75 FR 73553 through 76566), we finalized an eRx quality measure that would be used during the reporting periods in 2011 used to determine whether an eligible professional is a successful electronic prescriber under the eRx Incentive Program fo r the 2011 eRx incentive, as well as for the 2012 and 2013 eRx payment adjustme nts. The measure that we adopted forCMS-3248-P 8 reporting in 2011 (which is the same measure that was adopted for the 2010 eRx Incentive Program) is described as a meas ure that documents whether an eligible professional or group practice has ad opted a "qualified" eRx system. A qualified eRx system is a system that is capable of performing the following four specific functionalities:

● Generate a complete active medicati on list incorporati ng electronic data received from applicable pharmacies a nd pharmacy benefit managers (PBMs), if

available.

● Allow eligible professionals to se lect medications, print prescriptions, electronically transmit prescr iptions, and conduct alerts (t hat is, written or acoustic signals to warn the prescriber of possibl e undesirable or unsafe situations including potentially inappropriate doses or routes of administration of a drug, drug-drug interactions, allergy concerns, or warnings a nd cautions) and this functionality must be enabled,

● Provide information related to lo wer cost therapeutically appropriate alternatives (if any) (that is, the ability of an eRx system to re ceive tiered formulary information, if available, would again suffice for this requirement for 2011 and until this function is more widely av ailable in the marketplace)

● Provide information on formulary or tiered formulary medications, patient eligibility, and authorization requirements received electronically from the patient's drug plan (if available). In addition, to be a qualified eRx system under the eRx Incentive Program, electronic systems must convey the informati on above using the sta ndards currently inCMS-3248-P 9 effect for the Part D eRx program, includi ng certain National Council for Prescription Drug Programs' (NCPDP) standards. (To view the current eRx quality measure specifications, we refer readers to the "2011 eRx Measure Specifications, Release Notes, and Claims-Based Reporting Principles" dow nload found on the E-Prescribing Measure page of the eRx Incentive Program section of the CMS Web site at: http://www.cms.gov/ERxIncentive/06_E -Prescribing_Measure.asp#TopOfPage .) The technological requirements for eRx in the EHR Incentive Program are similar to the technological requirements for th e eRx Incentive Program. Under the EHR Incentive Program, eligible professionals ar e required to adopt certified EHR technology, which must include the capability to perfor m certain eRx functions that are similar to those required for the eRx Incentive Program. Certified EHR technology must be tested and certified by a certification body authorized by the National Coor dinator for Health Information Technology (at the present time, these bodies are Office of the National

Coordinator for Health Information Technology (ONC)-Authorized Testing and Certification Bodies (ONC-ATCBs)). This means that eligible professionals participating in the EHR Incentive Program can rely on a th ird party certification body to ensure that the vendor's EHR technology includes certain technical capabilities. EHR technology is certified as a "Complete EHR" or an "EHR module," as those terms are defined at 45 CFR 170.102. A Complete EHR is EHR technology that has been developed to meet, at a minimum, all applicable certification cr iteria adopted by the Secretary. An EHR Module is any service, component, or combina tion thereof that can meet the requirements

of at least one certification crit erion adopted by the Secretary. In contrast, the eRx Incentive Program doe s not require certificat ion of the systemCMS-3248-P 10 used for eRx. Thus, eligible professionals or group practices are generally required to rely on information that they obtain from th e vendors of the systems and demonstration of the functionalities of the system, to de termine if the system meets the required standard. We believe that the eRx capa bilities of certified EHR technology are sufficiently similar in nature (and in fact , would more than likely be capable of performing all of the required functionalities) and would be appropriate for purposes of the eRx Incentive Program. Among other requirements, ce rtified EHR technology must be able to electronically ge nerate and transmit prescriptions and prescription-related

information in accordance with certain standa rds, some of which have been adopted for purposes of electronic prescribi ng under Part D. Similar to the required functionalities of a qualified eRx system, certified EHR technolog y also must be able to check for drugdrug interactions and check whether drugs ar e in a formulary or a preferred drug list, although the certification criteria do not spec ify any standards for the performance of those functions. We believe that it is accepta ble that not all of the Part D eRx standards are required for certified EHR technology in light of our de sire to better align the requirements of the eRx and the Medicare EH R Incentive Program and potentially reduce unnecessary investment in multiple tec hnologies for purposes of meeting the requirements for each program. Furthermore, to the extent that an eligible professional uses certified EHR technology to electronically prescribe under Part D, he or she would still be required to comply with the Part D standards to do so. In addition, we believe it is important to provide more certa inty to eligible professionals (including those in group practices) that may be participating in both the EHR Incentive Program and the eRx Incenti ve Program with regard to purchasingCMS-3248-P 11 systems for use under these programs, and to encourage adoption of certified EHR technology. Accordingly, we are proposing cha nges to the eRx measure reported in 2011 for purposes of reporting for the 2011 eR x incentive and the 2013 eRx payment adjustment (the "2011 eRx quality measure") in accordance with sec tion 1848(k)(2)(C) of the Act. This section of the Act requires the eRx measure to be endorsed by the entity

with a contract with th e Secretary under secti on 1890(a) of the Act (c urrently, th at entity is the National Quality Forum (NQF)) except for in the case of a specified area or medical topic determined appropriate by the Se cretary for which a feasible and practical measure has not been endorsed by the NQF. Wh ile the electronic prescribing measure, as originally implemented in the 2009 eRx Incen tive Program is an NQF-endorsed measure, subsequent modifications made to the m easure for implementation purposes (for example, to reduce eligible professionals' re porting burden and to increase applicability of the measure to a broader range of eligible professionals) have not yet been reviewed by the NQF. In light of this, we are no t aware of any other NQF-endorsed measure related to electronic prescribing by eligible professionals that woul d be appropriate for use in the eRx Incentive Program. Therefore, we believe that the use of this eRx measure falls within the exception under sectio n 1848(k)(2)(C)(ii) of the Act. Specifically, we are proposing to revise the description statement for the 2011 eRx measure that we adopted for reporti ng in 2011 for purposes of the 2011 eRx incentive and the 2013 eRx payment adjustment . Currently, the description statement

indicates that the measure documents whethe r an eligible profe ssional or group practice has adopted a "qualified" eRx system that pe rforms the four func tionalities discussed above. We propose to revise this descrip tion statement to indicate that the measureCMS-3248-P 12 documents whether an eligible professional or group practice has adopted a "qualified" eRx system that performs the four functionalities previously discussed or is certified EHR technology as defined at 42 CFR 495.4 and 45 CFR 170.102. We believe that this proposed change merely expands on the defini tion of a "qualified" eRx system without altering the original intent of the measure, which was to evaluate the extent to which eligible professionals generate and tran smit prescriptions and prescription-related information electronically. Both eRx syst ems that perform the four functionalities previously discussed and certi fied EHR technology are able to generate and transmit prescriptions and prescription-related informa tion electronically. An eligible professional or group practice that has alrea dy purchased an eRx system th at meets the definition of a "qualified" eRx system would be able to continue using that system (that is, even with the proposed changes to the measure, systems that meet the four functionalities would continue to constitute "qualified" eR x systems). In accordance with section 1848(m)(3)(B)(v) of the Act, which requires the Secretary, to the extent practicable, to ensure that eligible professionals utilize electronic prescribing systems in compliance with standards established for such system s pursuant to the Part D eRx Program under section 1860D-4(e) of the Act, we also propose that for purposes of the 2011 eRx measure certified EHR technology must comply with the Part D standards for the electronic transmission of pr escriptions at 42 CFR 423.160(b)(2)(ii). This proposed requirement is consistent with the ONC certification requirements at 45 CFR 170.304(b) and 170.205(b)(1) and (2). With this proposed change to the 2011 eRx measure, eligible professionals (including those in group practices) that ar e participating in the eRx Incentive Program would have the option of adopting either a qualified eRx system thatCMS-3248-P 13 performs the four functionalities previously discussed or certified EHR technology as

defined at 42 CFR 495.4 and 45 CFR 170.102. Thus, under this propo sal, certified EHR technology would be recognized as a qualif ied system under the revised eRx quality measure regardless of whether the cer tified EHR technology ha s all four of the functionalities previously described. B ecause the proposed change to the 2011 eRx measure, if finalized, would not be effective until the effective date of a subsequent final rule, this change would only be effective fo r the remainder of th e reporting periods in CY 2011 for the 2011 eRx incentive and the 2013 eRx payment adjustment. The proposed change to the 2011 eRx quality measure, if finalized, would not apply retrospectively to any part of the CY 2011 reporting periods for the 2011 eRx incentive or the 2013 eRx payment adjustments that o ccurred prior to the effective date of a subsequent final rule. The proposed change to the eRx measure does not change any of the regulations for the eRx Incentive Program payment adjustment, which are codified at 42 CFR 414.92(c)(2). In additi on, because this proposed chan ge would not be finalized prior to the end of the 2012 eRx paymen t adjustment reporting period (that is, June 30, 2011), such a change would not appl y for purposes of reporting the eRx measure for the 2012 eRx payment adjustment. However, as we noted previously, we believe that most certified EHR technology meet the requ irements for "qualified" eRx systems under the current 2011 eRx quality measure. Therefore, for purposes of reporting the current eRx quality measure during 2011 (including reporting for purposes of the 2012 eRx payment adjustment), nothing precludes eligible professionals (or a group practice) that already have certified EHR technology that m eet the four functionalities from using the certified EHR technology for purposes of the eRx Incentive Program (that is, theCMS-3248-P 14 technology would constitute a "qualified" system under the current 2011 eRx quality measure because such system meets the four specified functionalities). For future program years, we anticipate using the re vised eRx quality measure, which we would adopt through future notice and comment ru lemaking. We invite public comment on the proposed modification to the 2011 eRx quality measure. B. Significant Hardship Exemption Categories for the 2012 Payment Adjustment 1. Overview of the 2012 Payment Adjustment As required by section 1848(a)(5) of the Act, and in accordance with our regulations at 42 CFR 414.92(c)(2), eligible professionals or group practices who are not successful electronic prescribers (as speci fied by CMS for purposes of the payment adjustment) are subject to the eRx payment adjustment in 2012. In the CY 2011 PFS final rule with comment period (75 FR 73560 through 73565), we finalized the program requirements for the 2012 eRx payment adjust ment. Specifically, the 2012 eRx payment adjustment does not apply to the following: (1) an eligible prof essional who is not a physician (includes doctors of medicine, doc tors of osteopathy, a nd podiatrists), nurse practitioner, or physician assi stant as of June 30, 2011; (2) an eligible professional who does not have at least 100 cases (that is, claims for patient se rvices) containing an

encounter code that falls within the denominat or of the eRx measure for dates of service between January 1, 2011 and June 30, 2011; or (3) an eligible pr ofessional who is a successful electronic prescriber for the January 1, 2011 through June 30, 2011 reporting period (that is, reports the eRx measure 10 times via claims between January 1, 2011 and June 30, 2011). We also finalized the requirement that the 2012 eRx payment adjustment does notCMS-3248-P 15 apply to an individual eligible professional or group practice if less than 10 percent of an eligible professional's or group practice's estimated tota l allowed charges for the January 1, 2011 through June 30, 2011 reporting pe riod are comprised of services that appear in the denominator of the 2011 eRx meas ure. Information and other details about the eRx Incentive Program, in cluding the requirements for group practices participating in the eRx GPRO in 2011 with regard to the 2012 eRx payment adjustment can be found on the eRx Incentive Program section of the CMS Web site at: http://www.cms.gov/erxincentive

. 2. Current Significant Hardship Exemptions for the 2012 eRx Payment Adjustment In addition to the requirements for the 2012 eRx payment adjustment, 42 CFR 414.92(c)(2)(ii) provide s that we may, on a case-by-case basis, exempt an eligible professional (or group practice) from the applicati on of the payment adjustment, if we determine, subject to annual renewal, that compliance with the requirement for being a successful electronic prescriber would result in a significant hardship. In the

CY 2011 PFS final rule with comment period (75 FR 73564 through 75 FR 73565), we

finalized two circumstances under which an e ligible professional or group practice can request consideration for a significant hardship exemption for the 2012 eRx payment adjustment--

● The eligible professional or group practice practices in a rural area with limited high speed Internet access; or

● The eligible professiona l or group practice practices in an area with limited available pharmacies for eRx. In order for eligible prof essionals and group practices to identify these categoriesCMS-3248-P 16 for purposes of requesting a hardship exemp tion, we created a G-code for each of the above situations. Thus, to request considera tion for a significant ha rdship exemption for the 2012 eRx payment adjustment, individual eligible professionals must report the appropriate G-code at least once on claims for services re ndered between January 1, 2011 and June 30, 2011. Group practices that wishedto participate in the 2011 eRx GPRO and be considered for exemption under one of the significant hardship categories were required to request a hardship exemption at the time they self-nominated to participate in the 2011 eRx GPRO earlier this year. 3. Proposed Additional Significant Hardsh ip Exemption Categories for the 2012 eRx Payment Adjustment Since publication of the CY 2011 PFS fina l rule with comment period, we have received numerous requests to expand the categories under the significant hardship exemption for the 2012 eRx payment adjustment . Some stakeholders have recommended specific circumstances of significant hardship fo r our consideration (for example, eligible professionals who have prescribing privileg es but do not prescribe under their NPI, eligible professionals who prescribe a high volume of narcotics, and eligible professionals who electronically prescribe but typically do not do so for any of the

services included in the eRx m easure's denominator), while others strongly suggested we consider increasing the number of specific ha rdship exemption categories. We believe that many of the circumstances raised by st akeholders may pose a significant hardship and limit eligible professionals and group pr actices in their ab ility to meet the requirements for being successful electronic pres cribers either because of the nature of their practice or because of th e limitations of the eRx measure itself, and as a result, suchCMS-3248-P 17 professionals might be unfairly penalized. Therefore, we are proposing to revise the significant hardship regulation at 42 CFR 414.92(c)(2)(ii) to add paragraphs that--(1) codify the two hardship exemption categorie s for the 2012 eRx payment adjustment that we finalized in the CY 2011 PFS final rule; and (2) codify the a dditional significant hardship categories for the 2012 eRx payment ad justment that we are proposing in this proposed rule. We also are proposing to allow some additional time for submitting significant hardship exemption requests to CMS. Specifically, we are proposing the foll owing additional significant hardship exemption categories for the 2012 eRx payment ad justment with regard to the reporting period of January 1, 2011 through June 30, 2011: a. Eligible Professionals W ho Register to Participate in the Medicare or Medicaid EHR Incentive Programs and Adopt Certified EHR Technology We are proposing this exempti on category at proposed 42 CFR 414.92(c)(2)(ii)(C) because el igible professionals (including t hose in group practices) that intended to participate in the EHR Incentiv e Program may have delayed adopting eRx technology for purposes of the eRx Incentiv e Program until the list of certified EHR technology became available so that the same technology could be used to satisfy both programs' requirements. The ONC final ru le establishing a temporary certification program for health information technol ogy (75 FR 36158) was not published in the Federal Register until June 24, 2010. The certificati on and listing of EHR technologies (certified Complete EHRs and certified EHR Modules) on the ONC Certified HIT Products List (CHPL) did not begin un til September 2010. Until then, eligible professionals and group practices had no way of knowing which EHR technologiesCMS-3248-P 18 would be certified. At the same time, we di d not propose to use the first half of 2011 as the reporting period for the 2012 eRx pa yment adjustment until the CY 2011 PFS proposed rule went on public display at the Office of the Federal Register on June 25, 2010. As such, we believe it may be a significant hardship for eligible professionals in this situation to have both adopted certified EHR technology and fully integrated the technology into their practice' s clinical workflows and processes so that they would be able to su ccessfully report th e eRx measure prior to June 30, 2011, especially given that an eligible professi onal under the Medicare EHR Incentive Program has until October 1, 2011, to begin a 90-da y EHR reporting period for the 2011 payment year. Similarly, this extended time period provides Medicare eligible professionals under the eRx Incentive Program but who are eligible for incen tives under the Medicaid EHR Incentive Program with a majority of 2011 to adopt, implement, or upgrade to certified EHR technology. We believe this hardship exemption category is necessary and appropriate in order to fully support and encour age eligible professiona ls to actively take steps to become meaningful us ers of certified EHR technolo gy. Also, in the absence of this significant hardship exemption category, eligible professionals may potentially have to adopt two systems (for example, a standal one eRx system for purpos es of participation in the eRx Incentive Program, followed by certified EHR tec hnology), which could potentially be financially burdensome. To be considered for a significant hardship exemption under this category, we are proposi ng that the eligible professional, at a minimum, must: (1) have registered for e ither the Medicare or Medicaid EHR Incentive Program (for instructions on how to register for one of the EHR Incentive Programs, we refer readers to the Registration and Attest ation page of the EHR Incentive ProgramsCMS-3248-P 19

section of the CMS Web site at http://www.cms.gov/EHRIncentivePrograms/ 20_RegistrationandAttestation.asp#TopOfP

age ); and (2) provide identifying informati on as to the certified EHR technology (as defined at 45 CFR 170.102) that has been a dopted for use no later than October 1, 2011, for a hardship exemption to be submitted, which then would be reviewed on a case-by-case basis. We propose that for purpos es of this proposed significant hardship exemption category, the identifying information would consist of the certification number that is assigned to the EHR technology for purposes of ONC's CHPL. In addition, we are considering requiring eligible pr ofessionals to provide a seri al number for their specific product but have concerns about whether such information would be readily accessible by eligible professionals. We invite comments on the feasibility of requiring eligible professionals to provide a serial number in addition to the certification number for the certified EHR technology, or other information identifying and verifying the specific product. In requesting a significant hardship exemption under this proposed category, an eligible professional would be attesting that he or she either has purchased the specified certified EHR technology (as identified by the certification number and/or serial number) or has the specified certified EHR technology available for immediate use and that the professional intends to use that technol ogy to qualify for a Medi care or Medicaid EHR incentive for payment year 2011.

b. Inability to Electronically Prescribe Due to Local, State, or Federal Law or Regulation We are proposing at 42 CF R 414.92(c)(2)(ii)(D) that, to the extent that local, State, or Federal law or regul ation limits or prevents an e ligible professional or groupCMS-3248-P 20 practice that otherwise has general prescribi ng authority from elec tronically prescribing (for example, eligible profe ssionals who prescribe a large volume of narcotics, which may not be electronically prescr ibed in some states, or elig ible professionals who practice in a State that prohibits or limits the transm ission of electronic pr escriptions via a third party network such as Suresc ripts), the eligible professi onal or group practice would be able to request consideration for an exemp tion from application of the 2012 eRx payment adjustment, which would be reviewed on a case-by-case basis. We believe eligible professionals in this situation face a significan t hardship with regard to the requirements for being successful electronic prescribers because while they may meet the 10-percent threshold for applicability of the payment adjustment, they may not have sufficient opportunities to meet the requirements for being a successful electronic prescriber because Federal, State, or local law or regulation may limit th e number of opportunities that an eligible professional or group practice has to elect ronically prescribe (that is, having at least 100 denominator-eligible visits prior to June 30, 2011, but being unable to electronically prescribe for at l east 10 of these denominator-elig ible visits due to Federal, State, or local law or regulation). c. Limited Prescribing Activity We are proposing at 42 CF R 414.92(c)(2)(ii)(E) that an eligible professional who has prescribing privileges but does not prescribe or very infrequently prescribes in his or her practice (for example, a nurse practiti oner who may not write prescriptions under his or her own NPI, a physician who decides to let his Drug Enforcement Administration registration expire during th e reporting period without rene wing it, or an eligible professional who prescribed fewer than 10 prescriptions between January 1, 2011 andCMS-3248-P 21 June 30, 2011 regardless of whether the prescrip tions were electronically prescribed or not), yet still meets the 10-percent threshol d for applicability of the payment adjustment, would be able to request consideration fo r a significant hardship exemption from application of the 2012 eRx payment adjustme nt, which would be reviewed on a case-bycase basis. We believe that it is a significant hardship for eligible professionals who have prescribing privileges, but infrequently pr escribe, to become successful electronic prescribers because the nature of their prac tice may limit the number of opportunities an eligible professional or group pr actice to prescribe, much less electronically prescribe. d. Insufficient Opportunities to Report the Electronic Prescribing Measure due to

Limitations of the Measure's Denominator To the extent an eligible professiona l or group practice has an eRx system, electronically prescribes, and has denominator- eligible visits, but does not normally write prescriptions associated with any of the type s of visits included in the eRx measure's denominator (for example, certain types of physicians such as surgeons), we are proposing at 42 CFR 414.92(c)(2)( ii)(F) that the eligible pr ofessional or group practice would be able to request consideration fo r a significant hardship exemption from application of the 2012 eRx payment adjustme nt, which would be reviewed on a case-bycase basis. Similar to the proposed hardship category for lack of pr escribing activity, we believe it would be a significant hardship fo r eligible professionals who do not have a sufficient opportunity to report the eRx meas ure because of the limitations of the eRx

measure's denominator to meet the criteria fo r being a successful el ectronic prescriber. While such eligible professionals may meet th e 10-percent threshold for applicability of the payment adjustment and have at least 100 denominator-eligible visits prior toCMS-3248-P 22 June 30, 2011, they may not be able to report their eRx activity at least 10 times because the bulk of their prescribing act ivity occurs in other circumst ances that are not accounted for by the measure's denominator. We invite public comments on the additional hardship exemption categories proposed in this proposed rule. In addition, we also invite input on other categories of significant hardship that were not specifically proposed so that we may consider them for purposes of the 2013 or 2014 eRx payment adjustment. To request a hardship exemption fo r any of the categories proposed and previously described, we are proposing that an eligible professiona l or group practice participating in the 2011 eRx GPRO provide to us by the date specified below, the following:

● Identifying information such as th e TIN, NPI, name, mailing address, and

e-mail address of all affect ed eligible professionals.

● The significant hardship exempti on category(ies) above that apply.

● A justification statement describing how compliance with the requirement for being a successful electronic prescriber for the 2012 eRx payment adjustment during the reporting period would result in a significant hardship to the eligible professional or group practice.

● An attestation of the accuracy of the information provided. The justification statement should be specific to the category under which the eligible professional or group practice is s ubmitting its request and must explain how the exemption applies to the professional or group practice. For exampl e, if the eligible professional is requesting a significant hardship exemption due to Federal, State, or localCMS-3248-P 23 law or regulation, he or she must cite the applicable law and how the law restricts the eligible professional's ability to electronically prescribe. Similarly, if the eligible professional is requesting a si gnificant hardship due to lack of prescribing activity, the eligible professional must provide the numbe r of prescriptions ge nerated during the 2012 eRx payment adjustment reporting period. We would review the information submitted by each eligible professional and group practi ce on a case-by-case basis. In addition, we are proposing that an eligible professional or group practice must, upon request, provide additional supporting documentation if there is insufficient information (such as, but not limited to, a TIN or NPI that we cannot match to the Medicare claims, a certification number for the certified EHR technology that do es not appear on the list of certified EHR technology, or an incomplete justification for the significant hardship exemption request) to justify the request or make the determinati on of whether a significant hardship exists. We also are proposing that eligible professionals or gr oup practices would be able to submit significant hardship exemption request s using a web-based to ol or interface. However, our ability to receive the significan t hardship requests in this manner would be dependent on the development of such a webs ite being completed prior to the publication

of the final rule. In the event that such a webs ite is not available, an eligible professional or group practice would be required to send us an application for a hardship exemption with such information by mail. We are not prop osing to allow an elig ible professional or group practice to submit significant hardship ex emption requests via email or fax because additional security precautions would need to be put into place. In some cases, a TIN may consist of an eligible prof essional’s social security num ber, which is considered to be personally identifiable information.CMS-3248-P 24 We are proposing that the eligible pr ofessional or group practice must submit the hardship request by no later than Octobe r 1, 2011, which, if submitted by mail, means postmarked no later than October 1, 2011. We also propose to extend the deadline for submitting requests for consideration for the two significant hardship exemption categories (that is, eligible professional or group practice practices in rural areas with limited high speed intern et access and eligible professional or group practice practices in an area with limited available pharmacies for eRx) for the 2012 eRx payment adjustment

that were finalized in the CY 2011 PFS final rule (75 FR 73564 through 73565) to October 1, 2011. Since this rule is not expe cted to be finalized prior to the current deadline of June 30, 2011, for submitting the G- codes that were created for these two significant hardship exemption categories via claims (or, for group practices, at the time group practices self-nominate), we propose th at the Web-based tool or interface, if available, would be used to submit all signi ficant hardship exempti on requests (including those for the current significant hardship ex emption categories). Eligible professionals who wish to request a significant hardship ex emption for one of the current significant hardship exemption categories via claims-based submission of a G-code would still have to do so prior to the current deadline of June 30, 2011. If the web-based tool is not developed prior to the publication of the final rule, then we would default to mail submission of all significant hardship exemp tion requests (including those for the current hardship exemption categories). We are proposing October 1, 2011, because we seek to complete our review of the requests in time to instruct th e carriers/MACs as to those e ligible professionals or group practices that are not subject to the 2012 eRx payment adju stments based on the proposedCMS-3248-P 25 additional significant hardship exemption categorie s. We would like to be able to process all such requests before we begin making the claims processing systems changes later this year to adjust eligible professional s' or group practices' payments starting on January 1, 2012. However, we anticipate that , in some cases, we may not be able to complete our review of the requests before the claims processing systems updates are made to begin reducing eligible professi onals' and group practices' PFS amounts in 2012. In such cases, if we ultimately approve the eligible professional's or group practice's request for a significant hardsh ip exemption, we would need to reprocess all claims for services furnished up to that point in 2012 that were paid at the reduced PFS amount. We

also believe that this date allows sufficient time for eligible professionals (including those in group practices) that intend to use certi fied EHR technology and to qualify for the 2011 EHR Incentive Program in 2011 to have adopted the technology. While we considered providing eligible professionals and group practices with additional time to submit requests for a significant hardship exemption under the proposed additional categories, we believe th at doing so might result in the need to reprocess claims for 2012 services for eligible professionals. We invite public comment on the proposed process for submitting these requests for significant hardship exemptions to us (including comments on the type of information we are proposing eligible professionals and group practices must s ubmit, the proposed options for how the information could be submitted, and the proposed timeframes for submission). We also invite comment on our proposal to exte nd the timeframe for submitting hardship exemption requests for the two categories we finalized in the CY 2011 PFS final rule and the proposed process for submitting these requests under the extended timeframe.CMS-3248-P 26

To the extent the final rule is not effective by October 1, 2011, then we propose that the eligible professiona l or group practice must submit the hardship request by no later than 5 business days after the effective date of the final rule. Eligible professionals and group practices may begin submitting significant hardship exemption requests at any

time after the final rule is made availabl e for public inspection by the Office of the Federal Register. In the event that the fi nal rule is not made available for public inspection by the Office of the Federal Regi ster by October 1, 2011, we seek comment on whether 5 business days after the effective date of the final rule would be an adequate amount of time for eligible professionals and group practices to submit a significant hardship exemption request. We also are proposing that once we have completed our review of the eligible professional's or group practice's request and ma de a decision, we will notify the eligible professional or group practice of our decision and all such decisions would be final. Eligible professionals and group practices would not have the oppor tunity to request

reconsiderations of th eir requests for significan t hardship exemption.CMS-3248-P 27 III. Collection of Information Requirements Under the Paperwork Reduction Act of 1995, we are required to provide 60-day

notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2 )(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues:

● The need for the information collecti on and its usefulness in carrying out the proper functions of our agency.

● The accuracy of our estimate of the information collection burden.

● The quality, utility, and clarity of the information to be collected.

● Recommendations to minimize the information collection burden on the affected public, including auto mated collection techniques. We are soliciting public comment on each of these issues for the following

sections of this document that contain information collection requirements (ICRs): A. ICRs Related to Proposed Changes to the 2011 Electronic Prescribing Measure We do not believe there is any burden asso ciated with the proposed changes to the 2011 eRx measure as the changes solely clar ify whether we consider certified EHR technology to meet the technological requireme nts of the eRx measure and do not change the reporting requirements for purposes of re porting the eRx quality measure for the 2011 eRx incentive and 2013 eRx payment adjustment. B. ICRs Regarding Proposed Additional Si gnificant Hardship Exemption Categories for the 2012 eRx Payment AdjustmentCMS-3248-P 28 We believe that any burden associated with submitting the hardship exemption requests for the additional categories we are proposing would be minimal and would be limited to the time and effort associated with gathering the requested information and submitting the information to CMS in the specified form and manner. Whether the application can be submitted online or through other means, we do not anticipate it taking more than a 2 hours per eligible professiona l to review the hardship exemption codes available, determine which code(s) applies to their particular situation, gather the information needed for the justification, and then complete and submit the information to

CMS. To provide an estimate of the burden associated with submitting a hardship exemption request, we need to determine th e approximate number of physicians and eligible professionals that could be subject to the eRx payment adjustment in 2012 as well as the number of eligible professiona ls that could submit a hardship exemption request. Based on Medicare Part B claims data, it is estimated that approximately 209,000 eligible professionals could potenti ally be subject to the 2012 payment adjustment unless they become a successful electronic prescriber (that is, report the electronic prescribing measure at least 10 tim es during the 6-month reporting period) or request a significant hardship exemption. Thus, the maximum total number of eligible professionals that could potenti ally need to request a significant hardship exemption is believed to be approximately 209,000. Howe ver based on participation numbers from previous eRx Incentive Program years, we predict that the number of eligible professionals impacted will in fact be lower. In 2009, 92,132 eligible professionals participated in the eRx program and prel iminary data for 2010 indicates that 100,444CMS-3248-P 29 professionals have participated in the eR x Incentive Program. Based on this data, we

have determined that it is more accurate to estimate that approximately 109,000 eligible professionals could potentially submit a signifi cant hardship exemption request as over 100,000 eligible professionals are already participating in the program. While we do not have a precise estimate of how many of the e ligible professionals that are not able to be successful electronic prescribers will request a significant hardship, we do know that since the proposed hardship exemption cat egories will not apply to all eligible professionals since they represent specific circ umstances. Therefore, for purposes of this burden estimate, we will assume that, at a minimum, approximately 10 percent of the 109,000 eligible professionals that could potentially reque st a significant hardship exemption will do so. This brings our minimum estimated number of eligible professionals impacted to approximately 10,900. Based on our estimate that the time needed to collect and report the information requested will be 2 hours, we believe that the total burden associated with requesting a si gnificant hardship exemption will range from approximately 21,800 hours (10,900 eligible pr ofessionals x 2 hours per eligible professional) to 418,000 hours (209,000 eligible professionals x 2 hours per eligible professional). Based on an average group prac tice labor cost of $58 per hour, we predict

the annual burden cost to be betwee n approximately $1,264,400 ($58 per hour x 21,800 hours) and $24,244,000 ($58 per hour x 418,000 hour s). We welcome comments on the

above estimates. If you comment on these information colle ction and recordkeeping requirements, please do either of the following:CMS-3248-P 30 1. Submit your comments electronically as specified in the ADDRESSES section of this proposed rule; or 2. Submit your comments to the Office of Information and Regulatory Affairs, Office of Management and Budget,

Attention: CMS De sk Officer, CMS-3248-P Fax: (202) 395-7245; or Email: OIRA_submission@omb.eop.gov IV. Response to Comments Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowle dge or respond to them individually. We will consider all comments we receive by th e date and time specified in the "DATES" section of this preamble, and, when we pr oceed with a subsequent document, we will respond to the comments in the preamble to that document. V. Regulatory Impact Statement This proposed rule includes changes to the eRx Incentive Program. The first proposed change involves modifying the eRx qu ality measure used for certain reporting periods in CY 2011 to address uncertainties re lated to the technological requirements of the Medicare eRx Incentive Program. The eR x measure would be revised to indicate whether an eligible professiona l has adopted a qualified electr onic prescribing system or certified EHR technology as defined at 45 CFR 170.102. The second proposed change involves proposing additions to the signifi cant hardship exemption categories for the 2012 eRx payment adjustment. The proposed additional exemption categories for the 2012 e Rx payment adjustment include-- (1) eligible professionals who register toCMS-3248-P 31 participate in the Medicare or Medicaid EHR Incentive Program and Adopt Certified EHR Technology; (2) the inabil ity to electronically prescrib e due to local, State, or Federal law; (3) limited pres cribing activity; and (4) insuffi cient opportuniti es to report the electronic prescribing measure due to li mitations of the measure's denominator. Finally, this rule proposes an extension of the dead line for the 2012 eRx payment adjustment, thereby allowing eligible profe ssionals and group practices to submit the existing two significant hardship codes esta blished in the 2011 PFS final rule with comment period. These hardship exemption cate gories are: (1) the eligible professional practices in a rural ar ea without sufficient high speed inte rnet access; and (2) the eligible professional practices in an area without sufficient available pharmacies for electronic prescribing. We have examined the impact of this rule as required by Executive Order 12866 on Regulatory Planning and Review (Sep tember 30, 1993), Executive Order 13563 on Improving Regulation and Re gulatory Review (Januar y18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)). Executive Orders 12866 and 13563 direct agenci es to assess all costs and benefits of available regulatory alterna tives and, if regulation is n ecessary, to select regulatory approaches that maximize net benefits (inc luding potential economi c, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effectsCMS-3248-P 32 ($100 million or more in any 1 year). We estimate that the impact of the proposed changes would be $30 million for fiscal year (FY) 2012, net of premium offset based on the FY 2012 President's budget baseline and $20 million for FY 2013. Therefore, this proposed rule does not reach the economic thre shold and thus is not considered a major

rule. The RFA requires agencies to analyze options for regulatory relief of small entities if a rule has a significant economic impact on a substantial number of small entities. For purposes of the RFA, sma ll entities include small businesses, nonprofit organizations, and small governmental jurisdic tions. Individuals and States are not

included in the definition of a small entit y. A majority of the physicians and other eligible professionals affect ed by this proposed rule are small entities either by being nonprofit organizations or by meeting the Sma ll Business Administration size thresholds for a small healthcare business (having re venues of less than $7.0 million to $34.5 million in any 1 year). While we do not have precis e estimates, we believe this proposed rule

would affect a substantial numbe r of small entities (that is, several thousand or more).

We welcome detailed information on the numbe r of physicians and other professionals who would be affected by these proposals (t hat is, the number of physicians and other professionals who currently belie ve they are not able to meet the requirements for the 2012 eRx payment adjustment on the grounds th at would be it would pose a significant hardship and for whom one or more of th e proposed significant hardship exemption categories could apply). We interpret the requirement for preparation of an Initial Regulatory Flexibility Analysis as applying to proposed rules th at impose significant economic burden. TheCMS-3248-P 33 Office of the Chief Council for Advocacy within the Small Business Administration believes that the requirement applies whether the economic impact is positive or negative. Regardless, we normally prepare a voluntary analysis when proposed rules would have a significant positive impact. In this case, the proposed change to the eRx measure under the eRx Incentive Program for purpose of reporting for the 2011 eRx incentive and the 2013 eRx payment adjustment and the proposed a dditional significant hardship exemption categorie s, if applicable, for purpos es of the 2012 eRx payment adjustment would reduce burden for eligible professionals. The pr oposed modification to the eRx measure would eliminate any uncertain ty as to whether eligible professionals who are participating in both the eRx Incen tive Program and the EHR Incentive Program

can use the certified EHR tec hnology that they adopted for the EHR Incentive Program to electronically prescribe under the eRx Incentive Program. Therefore, there would no longer be any ambiguity as to whether eligib le professionals can use the same technology for both programs and less time and effort sp ent by eligible professionals to determine whether the certified EHR technology they have adopted for purposes of the EHR Incentive Program could be used to m eet the eRx quality measure under the eRx Incentive Program. It is difficult to estimate the precise economic impacts of these changes on the affected entities. We believe that the proposed additional significant hardship exemption categories for the 2012 eRx payment adjustment would re duce the number of eligible professionals that would otherwise be subject to a 1.0 percent adjustment in the PFS amount for covered professional services furnished in 2012. Also, the proposed changes would continue to encourage adoption of electronic prescribing in the interest of improving theCMS-3248-P 34 medication prescription process while acknow ledging circumstances that may prevent physicians and other professionals from successf ully participating in the eRx Incentive Program. Based on 2010 Medicare Part B claims data, we believe approximately 209,000 eligible professionals would need to either be a succes sful electronic prescriber or request a hardship exemption to avoid th e 2012 payment adjustment. However, we are unable to provide a precise estimate as to the number of eligible professionals, out of the total 209,000, that would potential ly request a significant hard ship exemption for one of the proposed hardship exemption categories. While we are aware, from public comments received in response to the 2011 PFS proposed and final rules with comment period, correspondence, inquiries received by our help desk, and comments made by eligible professionals on our national provider calls , open door forums, and a February 9, 2011 Town Hall Meeting, that there are eligible professionals who have expressed their inability to meet the succe ssful electronic prescriber requirements for the 2012 eRx payment adjustment for one or more of the circumstances addressed by the proposed additional significant hardship exemption categor ies, we are not able to quantify in detail how many eligible professionals these pr oposed additional significant hardship exemptions could apply to sinc e each eligible professional's individual circumstances are unique. We believe that any cost associated with requesting the significant hardship exemptions would be minimal since it would be limited to the time and effort associated with submitting a significant hardship exem ption from the 2012 eRx payment adjustment either via the proposed Web tool or by mail. We believe that any cost associated with requesting a significant hardsh ip exemption would, if applicable to the eligibleCMS-3248-P 35 professional, be offset by the eligible prof essional avoiding the payment adjustment in

2012. Overall, we estimate that the imp act of the proposed changes would be $30 million for FY 2012, net of premium offs et based on the FY 2012 President's budget baseline and $20 million for FY 2013. We also welcome comments and information on the likely magnitudes of savings, and the like ly numbers of affected physicians and other professionals who would achieve savings of various sizes, under the specific alternatives we propose. We note that each of the regulat ory relief options discussed previously in this preamble constitutes a distinct alterna tive that we have considered. We welcome comments on whether there are any additional alternatives that are both reasonable and achievable under the time constraints imposed by the existing rule. In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the opera tions of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of th e Act, we define a small rural hospital as a hospital that is located out side of a Metropolitan Statis tical Area for Medicare payment regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determine d, and the Secretary certifies, that this proposed rule would not have a significant impact on the operations of a substantial number of small rural hospitals. The eRx In centive Program does not apply to small rural hospitals.

Section 202 of the Unfunded Mandates Re form Act of 1995 also requires that agencies assess anticipated costs and benef its before issuing any rule whose mandatesCMS-3248-P 36 require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2011, that threshold is approxi mately $136 million. This rule would have no consequential effect on State, local, or tribal governments or on the private sector. Executive Order 13132 establishes certain requ irements that an agency must meet when it promulgates a proposed rule (and subseq uent final rule) that imposes substantial direct requirement costs on State and local gov ernments, preempts State law, or otherwise has Federalism implications. Since this re gulation does not impose any costs on State or local governments, the requirements of Executive Order 13132 ar e not applicable. In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.CMS-3248-P 37 List of Subjects in 42 CFR Part 414 Administrative practice and procedure, Health facilitie s, Health professions, Kidney diseases, Medicare, Reporting and recordkeeping.

For the reasons set forth in the preamble of this proposed rule, the Centers for

Medicare & Medicaid Services proposes to amend 42 CFR part 414 as set forth below:

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH

SERVICES 1. The authority citation for part 41 4 continues to read as follows: Authority: Secs. 1102, 1871, and 1881(b)(l) of the Social Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)). Subpart B--Physicians and Other Practitioners 2. Section 414.92 is amended by revising pa ragraph (c)(2)(ii) to read as follows: § 414.92 Electronic Prescribing Incentive Program.

* * * * * (c) * * * (2) * * * (ii) Significant hardship exception . CMS may, on a case-by-case basis, exempt an eligible professional (or in the case of a group practice under paragraph (e) of this section, a group practice) from the application of the payment adjustment under paragraph (c)(2) of this sec tion if, CMS determines, subjec t to annual renewal, that compliance with the requirement for being a su ccessful electronic pr escriber would resultCMS-3248-P 38 in a significant hardsh ip. Eligible professi onals (or, in the case of a group practice under paragraph (e) of this section, a group practice) may request co nsideration for a significant hardship exemption from the 2012 eRx paym ent adjustment if one of the following circumstances apply: (A) The practice is loca ted in a rural area without high speed internet access. (B) The practice is located in an area without sufficient available pharmacies for electronic prescribing. (C) Registration to participate in the Medicare or Me dicaid EHR Incentive Program and adoption of certified EHR technology. (D) Inability to electronically prescr ibe due to local, Stat e or Federal law or regulation. (E) Limited prescribing activity. (F) Insufficient opportunities to report the electronic prescribing measure due to

limitation’s of the measure’s denominator

* * * * *CMS-3248-P (Catalog of Federal Domestic Assistan ce Program No. 93.773, Medicare--Hospital Insurance; and Program No. 93.774, Medica re--Supplementary Medical Insurance Program)

Dated: April 28, 2011

__________________________________ Donald M. Berwick,

Administrator , Centers for Medicare & Medicaid Services

.

Approved: May 4, 2011

__________________________________ Kathleen Sebelius, Secretary , Department of Health and Human Services

. BILLING CODE 4120-01-P[FR Doc. 2011-13463 Filed 05/26/2011 at 11: 15 am; Publication Date: 06/01/2011]