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[Federal Register Volume 76, Number 105 (Wednesday, June 1, 2011)]
[Proposed Rules]
[Pages 31547-31556]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13463]

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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 the Electronic Prescribing 
(eRx) Incentive Program

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would modify the 2011 electronic 
prescribing (eRx) quality measure (that is, the eRx quality measure 
used for certain reporting periods in calendar year (CY) 2011), provide 
additional significant hardship exemption categories for eligible 
professionals and group practices to request an exemption during 2011 
for the 2012 eRx payment adjustment due to a significant hardship, and 
extend the deadline for submitting requests for consideration for the 
two significant hardship exemption categories for the 2012 eRx payment 
adjustment 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 July 25, 2011.

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 four ways (please choose only one 
of the 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 comments 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 deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    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 Hubert 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 for persons wishing to retain 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 schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

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 personally identifiable or 
confidential business information that is included in a comment. We 
post all comments

[[Page 31548]]

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 available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers 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 appointment to view public comments, 
phone 1-800-743-3951.

I. Background

    Section 132 of the Medicare Improvements for Patients and Providers 
Act of 2008 (MIPPA), Public Law 110-275, authorized the Secretary to 
establish a program to encourage the adoption and use of eRx 
technology. Implemented in 2009, the program offers a combination of 
financial incentives and payment adjustments to eligible professionals, 
which are defined under section 1848(k)(3)(B) of the Social Security 
Act (the Act). We understand that the term ``eligible professional'' is 
used in multiple CMS programs. However, for the purpose of this 
proposed rule, the eligible professionals to whom we refer are only 
those professionals eligible to participate in the eRx Incentive 
Program unless we specify otherwise. For more information 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_Eligible%20Professionals.asp#TopOfPage. Under section 
1848(m)(2)(C) of the Act, an eligible professional (or group practice 
participating in the eRx group practice reporting option (GPRO)) who is 
a successful electronic prescriber during 2011 can qualify for an 
incentive payment equal to 1.0 percent of its total estimated Medicare 
Part B Physician Fee Schedule (PFS) allowed charges for covered 
professional services furnished during the 2011 reporting period.
    In accordance with section 1848(a)(5)(A) of the Act, a PFS payment 
adjustment will begin in 2012 for those eligible professionals and 
group practices who are not successful electronic prescribers and will 
increase each year through 2014. Specifically, under 42 CFR 
414.92(c)(2), for covered professional services furnished by an 
eligible professional during 2012, 2013, and 2014, if an eligible 
professional (or in the case of a group practice, the group practice) 
is not a successful electronic prescriber (as specified by CMS for 
purposes of the payment adjustment) 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 year shall be equal 
to the applicable 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 year of the program thus far, we have established program 
requirements for the eRx Incentive Program in the annual Medicare PFS 
rulemaking, including the applicable reporting period(s) for the year 
and how an eligible professional can become a successful electronic 
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), respectively. In the 
November 29, 2010 Federal Register (75 FR 73551 through 73556), we 
published the CY 2011 PFS final rule with comment period, which set 
forth the requirements 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 final rule with comment 
period, we have received a number of inquiries from stakeholders 
regarding the eRx Incentive Program. Many stakeholders voiced concerns 
about differences between the requirements under the eRx Incentive 
Program and the Medicare Electronic Health Record (EHR) Incentive 
Program, which also requires, among other things, eligible 
professionals to satisfy an eRx objective and measure to be considered 
a meaningful user of certified EHR technology (``eligible 
professional'' is defined at 42 CFR 495.100 for purposes of the 
Medicare EHR Incentive Program). (For more information regarding the 
EHR Incentive Program see the published Federal Register on July 28, 
2010; 75 FR 44314 through 44588.) While Medicare eligible professionals 
and group practices cannot earn an incentive under both the eRx 
Incentive Program and the EHR Incentive 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 Medicare EHR Incentive Program.
    Stakeholders claim that the requirements under both programs are 
administratively confusing, cumbersome, and unnecessarily duplicative. 
On February 17, 2011, the Government Accountability Office (GAO) also 
published a report which indicated that CMS should address the 
inconsistencies between the eRx Incentive Program and the EHR Incentive 
Program (GAO-11-159, ``Electronic Prescribing: CMS Should Address 
Inconsistencies in Its Two Incentive Programs 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 identify and reduce 
redundant, inconsistent, or overlapping regulatory requirements and, 
among other things, identify and consider regulatory approaches that 
reduce burden and maintain flexibility 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 Electronic 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 for the 2011 eRx incentive, as well as for the 
2012 and 2013 eRx payment adjustments. The measure that we adopted for 
reporting in 2011 (which is the same measure that was adopted for the 
2010 eRx Incentive Program) is described as a measure that documents 
whether an eligible professional or group practice has adopted 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 medication list incorporating 
electronic

[[Page 31549]]

data received from applicable pharmacies and pharmacy benefit managers 
(PBMs), if available.
     Allow eligible professionals to select medications, print 
prescriptions, electronically transmit prescriptions, and conduct 
alerts (that is, written or acoustic signals to warn the prescriber of 
possible undesirable or unsafe situations including potentially 
inappropriate doses or routes of administration of a drug, drug-drug 
interactions, allergy concerns, or warnings and cautions) and this 
functionality must be enabled,
     Provide information related to lower cost therapeutically 
appropriate alternatives (if any) (that is, the ability of an eRx 
system to receive tiered formulary information, if available, would 
again suffice for this requirement for 2011 and until this function is 
more widely available 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 information above using the 
standards currently in effect for the Part D eRx program, including 
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'' download 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 the eRx Incentive 
Program. Under the EHR Incentive Program, eligible professionals are 
required to adopt certified EHR technology, which must include the 
capability to perform 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 Coordinator 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 third 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 criteria adopted by 
the Secretary. An EHR Module is any service, component, or combination 
thereof that can meet the requirements of at least one certification 
criterion adopted by the Secretary.
    In contrast, the eRx Incentive Program does not require 
certification of the system used for eRx. Thus, eligible professionals 
or group practices are generally required to rely on information that 
they obtain from the vendors of the systems and demonstration of the 
functionalities of the system, to determine if the system meets the 
required standard. We believe that the eRx capabilities 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, certified EHR technology 
must be able to electronically generate and transmit prescriptions and 
prescription-related information in accordance with certain standards, 
some of which have been adopted for purposes of electronic prescribing 
under Part D. Similar to the required functionalities of a qualified 
eRx system, certified EHR technology also must be able to check for 
drug-drug interactions and check whether drugs are in a formulary or a 
preferred drug list, although the certification criteria do not specify 
any standards for the performance of those functions. We believe that 
it is acceptable that not all of the Part D eRx standards are required 
for certified EHR technology in light of our desire to better align the 
requirements of the eRx and the Medicare EHR Incentive Program and 
potentially reduce unnecessary investment in multiple technologies 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 certainty 
to eligible professionals (including those in group practices) that may 
be participating in both the EHR Incentive Program and the eRx 
Incentive Program with regard to purchasing systems for use under these 
programs, and to encourage adoption of certified EHR technology. 
Accordingly, we are proposing changes to the eRx measure reported in 
2011 for purposes of reporting for the 2011 eRx incentive and the 2013 
eRx payment adjustment (the ``2011 eRx quality measure'') in accordance 
with section 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 the 
Secretary under section 1890(a) of the Act (currently, that entity is 
the National Quality Forum (NQF)) except for in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the NQF. 
While the electronic prescribing measure, as originally implemented in 
the 2009 eRx Incentive Program is an NQF-endorsed measure, subsequent 
modifications made to the measure for implementation purposes (for 
example, to reduce eligible professionals' reporting 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 not aware of any other NQF-endorsed measure related to 
electronic prescribing by eligible professionals that would be 
appropriate for use in the eRx Incentive Program. Therefore, we believe 
that the use of this eRx measure falls within the exception under 
section 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 reporting in 2011 for 
purposes of the 2011 eRx incentive and the 2013 eRx payment adjustment. 
Currently, the description statement indicates that the measure 
documents whether an eligible professional or group practice has 
adopted a ``qualified'' eRx system that performs the four 
functionalities discussed above. We propose to revise this description 
statement to indicate that the measure 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 definition 
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 transmit prescriptions and prescription-
related information electronically. Both eRx systems that perform the 
four

[[Page 31550]]

functionalities previously discussed and certified EHR technology are 
able to generate and transmit prescriptions and prescription-related 
information electronically. An eligible professional or group practice 
that has already purchased an eRx system that 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'' eRx 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 systems 
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 prescriptions 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 are participating in the eRx 
Incentive Program would have the option of adopting either a qualified 
eRx system that 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 proposal, certified EHR technology would be 
recognized as a qualified system under the revised eRx quality measure 
regardless of whether the certified EHR technology has all four of the 
functionalities previously described. Because 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 for the remainder of the 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 occurred 
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 addition, because this proposed change would not 
be finalized prior to the end of the 2012 eRx payment adjustment 
reporting period (that is, June 30, 2011), such a change would not 
apply 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 requirements 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 meet the four 
functionalities from using the certified EHR technology for purposes of 
the eRx Incentive Program (that is, the 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 revised eRx quality measure, 
which we would adopt through future notice and comment rulemaking. 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 
specified 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 adjustment. Specifically, the 
2012 eRx payment adjustment does not apply to the following: (1) An 
eligible professional who is not a physician (includes doctors of 
medicine, doctors of osteopathy, and podiatrists), nurse practitioner, 
or physician assistant as of June 30, 2011; (2) an eligible 
professional who does not have at least 100 cases (that is, claims for 
patient services) containing an encounter code that falls within the 
denominator of the eRx measure for dates of service between January 1, 
2011 and June 30, 2011; or (3) an eligible professional 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 not apply to an individual eligible professional or 
group practice if less than 10 percent of an eligible professional's or 
group practice's estimated total allowed charges for the January 1, 
2011 through June 30, 2011 reporting period are comprised of services 
that appear in the denominator of the 2011 eRx measure. Information and 
other details about the eRx Incentive Program, including 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) provides that we may, on a case-by-
case basis, exempt an eligible professional (or group practice) from 
the application 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 eligible 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 professional or group practice practices in 
an area with limited available pharmacies for eRx.
    In order for eligible professionals and group practices to identify 
these categories for purposes of requesting a hardship exemption, we 
created a G-code for each of the above situations. Thus, to request 
consideration for a significant hardship exemption for the 2012 eRx 
payment adjustment, individual eligible professionals must report the 
appropriate G-code at least once on claims for services rendered 
between January 1, 2011 and June 30, 2011. Group practices that wished 
to 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-

[[Page 31551]]

nominated to participate in the 2011 eRx GPRO earlier this year.
3. Proposed Additional Significant Hardship Exemption Categories for 
the 2012 eRx Payment Adjustment
    Since publication of the CY 2011 PFS final 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 for our consideration (for example, eligible 
professionals who have prescribing privileges 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 
measure's denominator), while others strongly suggested we consider 
increasing the number of specific hardship exemption categories. We 
believe that many of the circumstances raised by stakeholders may pose 
a significant hardship and limit eligible professionals and group 
practices in their ability to meet the requirements for being 
successful electronic prescribers either because of the nature of their 
practice or because of the limitations of the eRx measure itself, and 
as a result, such 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 categories for the 2012 eRx payment adjustment that 
we finalized in the CY 2011 PFS final rule; and (2) codify the 
additional significant hardship categories for the 2012 eRx payment 
adjustment 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 following additional significant 
hardship exemption categories for the 2012 eRx payment adjustment with 
regard to the reporting period of January 1, 2011 through June 30, 
2011:
a. Eligible Professionals Who Register To Participate in the Medicare 
or Medicaid EHR Incentive Programs and Adopt Certified EHR Technology
    We are proposing this exemption category at proposed 42 CFR 
414.92(c)(2)(ii)(C) because eligible professionals (including those in 
group practices) that intended to participate in the EHR Incentive 
Program may have delayed adopting eRx technology for purposes of the 
eRx Incentive 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 rule establishing a temporary 
certification program for health information technology (75 FR 36158) 
was not published in the Federal Register until June 24, 2010. The 
certification and listing of EHR technologies (certified Complete EHRs 
and certified EHR Modules) on the ONC Certified HIT Products List 
(CHPL) did not begin until September 2010. Until then, eligible 
professionals and group practices had no way of knowing which EHR 
technologies would be certified. At the same time, we did not propose 
to use the first half of 2011 as the reporting period for the 2012 eRx 
payment 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 
successfully report the eRx measure prior to June 30, 2011, especially 
given that an eligible professional under the Medicare EHR Incentive 
Program has until October 1, 2011, to begin a 90-day 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 incentives 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 
encourage eligible professionals to actively take steps to become 
meaningful users of certified EHR technology. Also, in the absence of 
this significant hardship exemption category, eligible professionals 
may potentially have to adopt two systems (for example, a standalone 
eRx system for purposes of participation in the eRx Incentive Program, 
followed by certified EHR technology), which could potentially be 
financially burdensome. To be considered for a significant hardship 
exemption under this category, we are proposing that the eligible 
professional, at a minimum, must: (1) Have registered for either 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 Attestation page of the EHR Incentive Programs section 
of the CMS Web site at http://www.cms.gov/EHRIncentivePrograms/20_RegistrationandAttestation.asp#TopOfPage); and (2) provide identifying 
information as to the certified EHR technology (as defined at 45 CFR 
170.102) that has been adopted 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 purposes 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 professionals to provide a serial 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 technology to qualify for a 
Medicare 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 CFR 414.92(c)(2)(ii)(D) that, to the extent 
that local, State, or Federal law or regulation limits or prevents an 
eligible professional or group practice that otherwise has general 
prescribing authority from electronically prescribing (for example, 
eligible professionals who prescribe a large volume of narcotics, which 
may not be electronically prescribed in some states, or eligible 
professionals who practice in a State that prohibits or limits the 
transmission of electronic prescriptions via a third party network such 
as Surescripts), the eligible professional or group practice would be 
able to request consideration for an exemption from application of the 
2012 eRx payment adjustment, which would be reviewed on a case-by-case

[[Page 31552]]

basis. We believe eligible professionals in this situation face a 
significant 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 the number of opportunities that an eligible 
professional or group practice has to electronically prescribe (that 
is, having at least 100 denominator-eligible visits prior to June 30, 
2011, but being unable to electronically prescribe for at least 10 of 
these denominator-eligible visits due to Federal, State, or local law 
or regulation).
c. Limited Prescribing Activity
    We are proposing at 42 CFR 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 practitioner who may not write prescriptions under his or her own 
NPI, a physician who decides to let his Drug Enforcement Administration 
registration expire during the reporting period without renewing it, or 
an eligible professional who prescribed fewer than 10 prescriptions 
between January 1, 2011 and June 30, 2011 regardless of whether the 
prescriptions were electronically prescribed or not), yet still meets 
the 10-percent threshold for applicability of the payment adjustment, 
would be able to request consideration for a significant hardship 
exemption from application of the 2012 eRx payment adjustment, which 
would be reviewed on a case-by-case basis. We believe that it is a 
significant hardship for eligible professionals who have prescribing 
privileges, but infrequently prescribe, to become successful electronic 
prescribers because the nature of their practice may limit the number 
of opportunities an eligible professional or group practice 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 professional 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 
types 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 professional or group 
practice would be able to request consideration for a significant 
hardship exemption from application of the 2012 eRx payment adjustment, 
which would be reviewed on a case-by-case basis. Similar to the 
proposed hardship category for lack of prescribing activity, we believe 
it would be a significant hardship for eligible professionals who do 
not have a sufficient opportunity to report the eRx measure because of 
the limitations of the eRx measure's denominator to meet the criteria 
for being a successful electronic prescriber. While such eligible 
professionals may meet the 10-percent threshold for applicability of 
the payment adjustment and have at least 100 denominator-eligible 
visits prior to June 30, 2011, they may not be able to report their eRx 
activity at least 10 times because the bulk of their prescribing 
activity occurs in other circumstances 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 for any of the categories proposed 
and previously described, we are proposing that an eligible 
professional or group practice participating in the 2011 eRx GPRO 
provide to us by the date specified below, the following:
     Identifying information such as the TIN, NPI, name, 
mailing address, and e-mail address of all affected eligible 
professionals.
     The significant hardship exemption 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 submitting 
its request and must explain how the exemption applies to the 
professional or group practice. For example, if the eligible 
professional is requesting a significant hardship exemption due to 
Federal, State, or local 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 significant hardship due to lack of 
prescribing activity, the eligible professional must provide the number 
of prescriptions generated during the 2012 eRx payment adjustment 
reporting period. We would review the information submitted by each 
eligible professional and group practice 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 does 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 determination of whether a significant 
hardship exists.
    We also are proposing that eligible professionals or group 
practices would be able to submit significant hardship exemption 
requests using a Web-based tool or interface. However, our ability to 
receive the significant hardship requests in this manner would be 
dependent on the development of such a Web site being completed prior 
to the publication of the final rule. In the event that such a Web site 
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 proposing to allow an eligible 
professional or group practice to submit significant hardship exemption 
requests via e-mail or fax because additional security precautions 
would need to be put into place. In some cases, a TIN may consist of an 
eligible professional's social security number, which is considered to 
be personally identifiable information.
    We are proposing that the eligible professional or group practice 
must submit the hardship request by no later than October 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 Internet access and eligible professional 
or group

[[Page 31553]]

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 expected 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 that the Web-based tool or interface, if available, would be 
used to submit all significant hardship exemption requests (including 
those for the current significant hardship exemption categories). 
Eligible professionals who wish to request a significant hardship 
exemption 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 
exemption 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 the carriers/MACs as to 
those eligible professionals or group practices that are not subject to 
the 2012 eRx payment adjustments based on the proposed additional 
significant hardship exemption categories. 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 professionals' 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 professionals' 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 hardship 
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 
certified 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 
that 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 submit, the 
proposed options for how the information could be submitted, and the 
proposed timeframes for submission). We also invite comment on our 
proposal to extend 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.
    To the extent the final rule is not effective by October 1, 2011, 
then we propose that the eligible professional 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 available for public 
inspection by the Office of the Federal Register. In the event that the 
final rule is not made available for public inspection by the Office of 
the Federal Register 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 made 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 opportunity to 
request reconsiderations of their requests for significant hardship 
exemption.

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 collection 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 automated 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 associated with the proposed 
changes to the 2011 eRx measure as the changes solely clarify whether 
we consider certified EHR technology to meet the technological 
requirements of the eRx measure and do not change the reporting 
requirements for purposes of reporting the eRx quality measure for the 
2011 eRx incentive and 2013 eRx payment adjustment.

B. ICRs Regarding Proposed Additional Significant Hardship Exemption 
Categories for the 2012 eRx Payment Adjustment

    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 professional 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 the 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 
professionals that could submit a hardship exemption request. Based on 
Medicare Part B claims data, it is estimated that approximately 209,000 
eligible professionals could potentially be

[[Page 31554]]

subject to the 2012 payment adjustment unless they become a successful 
electronic prescriber (that is, report the electronic prescribing 
measure at least 10 times during the 6-month reporting period) or 
request a significant hardship exemption. Thus, the maximum total 
number of eligible professionals that could potentially need to request 
a significant hardship exemption is believed to be approximately 
209,000. However 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 preliminary data for 
2010 indicates that 100,444 professionals have participated in the eRx 
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 significant 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 eligible professionals that are not able to be 
successful electronic prescribers will request a significant hardship, 
we do know that since the proposed hardship exemption categories will 
not apply to all eligible professionals since they represent specific 
circumstances. 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 request 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 significant hardship exemption will range from 
approximately 21,800 hours (10,900 eligible professionals 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 
practice labor cost of $58 per hour, we predict the annual burden cost 
to be between approximately $1,264,400 ($58 per hour x 21,800 hours) 
and $24,244,000 ($58 per hour x 418,000 hours). We welcome comments on 
the above estimates.
    If you comment on these information collection and recordkeeping 
requirements, please do either of the following:
    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 Desk Officer, 
CMS-3248-P. Fax: (202) 395-7245; or E-mail: 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 acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed 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 quality measure 
used for certain reporting periods in CY 2011 to address uncertainties 
related to the technological requirements of the Medicare eRx Incentive 
Program. The eRx measure would be revised to indicate whether an 
eligible professional has adopted a qualified electronic prescribing 
system or certified EHR technology as defined at 45 CFR 170.102. The 
second proposed change involves proposing additions to the significant 
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 to 
participate in the Medicare or Medicaid EHR Incentive Program and Adopt 
Certified EHR Technology; (2) the inability to electronically prescribe 
due to local, State, or Federal law; (3) limited prescribing activity; 
and (4) insufficient opportunities to report the electronic prescribing 
measure due to limitations of the measure's denominator. Finally, this 
rule proposes an extension of the deadline for the 2012 eRx payment 
adjustment, thereby allowing eligible professionals and group practices 
to submit the existing two significant hardship codes established in 
the 2011 PFS final rule with comment period. These hardship exemption 
categories are: (1) The eligible professional practices in a rural area 
without sufficient high speed Internet 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 (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January18, 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 agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($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 threshold 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, small 
entities include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Individuals and States are not included in 
the definition of a small entity. A majority of the physicians and 
other eligible professionals affected by this proposed rule are small 
entities either by being nonprofit organizations or by meeting the 
Small Business Administration size thresholds for a small healthcare 
business (having revenues of less than $7.0 million to $34.5 million in 
any 1 year). While we do not have precise estimates, we believe this 
proposed rule would affect a substantial number of small entities (that 
is, several thousand or more). We welcome detailed information on the 
number of physicians and other professionals who would be affected by 
these proposals (that is, the number of physicians and other 
professionals who currently believe they are not able to meet the 
requirements for the 2012 eRx payment adjustment on the grounds that it 
would pose a significant hardship and for whom one or more of the 
proposed

[[Page 31555]]

significant hardship exemption categories could apply).
    We interpret the requirement for preparation of an Initial 
Regulatory Flexibility Analysis as applying to proposed rules that 
impose significant economic burden. The 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 additional significant hardship 
exemption categories, if applicable, for purposes of the 2012 eRx 
payment adjustment would reduce burden for eligible professionals. The 
proposed modification to the eRx measure would eliminate any 
uncertainty as to whether eligible professionals who are participating 
in both the eRx Incentive Program and the EHR Incentive Program can use 
the certified EHR technology 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 
eligible professionals can use the same technology for both programs 
and less time and effort spent by eligible professionals to determine 
whether the certified EHR technology they have adopted for purposes of 
the EHR Incentive Program could be used to meet 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 reduce 
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 the medication prescription process while acknowledging 
circumstances that may prevent physicians and other professionals from 
successfully 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 successful electronic 
prescriber or request a hardship exemption to avoid the 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 potentially request a significant hardship 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 successful electronic prescriber requirements for 
the 2012 eRx payment adjustment for one or more of the circumstances 
addressed by the proposed additional significant hardship exemption 
categories, we are not able to quantify in detail how many eligible 
professionals these proposed additional significant hardship exemptions 
could apply to since 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 exemption 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 hardship exemption would, if 
applicable to the eligible professional, be offset by the eligible 
professional avoiding the payment adjustment in 2012.
    Overall, we estimate that the impact of the proposed changes would 
be $30 million for FY 2012, net of premium offset 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 likely 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 regulatory relief 
options discussed previously in this preamble constitutes a distinct 
alternative 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 operations 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 the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical 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 determined, 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 Incentive 
Program does not apply to small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2011, that 
threshold is approximately $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 requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. Since this regulation does not impose any costs on State 
or local governments, the requirements of Executive Order 13132 are not 
applicable.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 414

    Administrative practice and procedure, Health facilities, 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 414 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)).

[[Page 31556]]

Subpart B--Physicians and Other Practitioners

    2. Section 414.92 is amended by revising paragraph (c)(2)(ii) to 
read as follows:

Sec.  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 section if, CMS determines, subject to annual renewal, that 
compliance with the requirement for being a successful electronic 
prescriber would result in a significant hardship. Eligible 
professionals (or, in the case of a group practice under paragraph (e) 
of this section, a group practice) may request consideration for a 
significant hardship exemption from the 2012 eRx payment adjustment if 
one of the following circumstances apply:
    (A) The practice is located 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 Medicaid EHR 
Incentive Program and adoption of certified EHR technology.
    (D) Inability to electronically prescribe due to local, State 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.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
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.
[FR Doc. 2011-13463 Filed 5-26-11; 11:15 am]
BILLING CODE 4120-01-P
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