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[Federal Register Volume 76, Number 172 (Tuesday, September 6, 2011)]
[Rules and Regulations]
[Pages 54953-54969]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22629]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 414

[CMS-3248-F]
RIN 0938-AR00

Medicare Program; Changes to the Electronic Prescribing (eRx) 
Incentive Program

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

ACTION: Final rule.

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SUMMARY: This final rule modifies the electronic prescribing (eRx) 
quality measure used for certain reporting periods in calendar year 
(CY) 2011; provides 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 extends 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 final rule with comment period.

DATES: Effective Date: These regulations are effective on October 6, 
2011.
    Deadline for Submission of Hardship Exemption Requests for the 2012 
eRx Payment Adjustment: Hardship exemption requests for the 2012 eRx 
payment must be received by November 1, 2011.

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

SUPPLEMENTARY INFORMATION:

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 final 
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) 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 the Secretary's estimate of 
Medicare Part B Physician Fee Schedule (PFS) allowed charges for 
covered professional services furnished by the eligible professional 
(or group practice) 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.
    Following the 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 electronic prescribing 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 final rule published in the 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

[[Page 54954]]

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 concerns noted previously and in accordance with 
Executive Order 13563 (entitled ``Improving Regulation and Regulatory 
Review'' and released January 18, 2011), 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 subsequently proposed to make changes to the 
eRx Incentive Program in a proposed rule that appeared in the June 1, 
2011 Federal Register (76 FR 31547) entitled ``Medicare Program; 
Proposed Changes to the Electronic Prescribing (ERx) Incentive 
Program'' (hereinafter referred to as the June 2011 proposed rule). As 
described further in sections II.A and II.B of this final rule, in that 
proposed rule we specifically proposed 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. Summary of the Proposed Rule and Analysis of and Responses to 
Public Comments

    In this section of the final rule, we summarize our proposals, 
public comments, and our responses. We received over 404 public 
comments on the proposed rule. Approximately 39 comments were from 
groups representing eligible professionals, such as academic 
institutions, government agencies, and professional societies. The 
remaining comments were from individual physicians and private 
citizens.
    We received numerous comments that were not related to our proposal 
to modify the 2011 eRx quality measure or the proposals for additional 
significant hardship exemption categories for the 2012 eRx payment 
adjustment. While we appreciate the commenters' feedback, these 
comments are outside the scope of the issues addressed in this final 
rule. This final rule addresses our proposals to modify the 2011 eRx 
quality measure and establish additional significant hardship exemption 
categories related to the 2012 eRx payment adjustment. We will take 
these comments into consideration for future eRx Incentive Program 
years.

A. Modification of the CY 2011 Electronic Prescribing Quality Measure

    In the CY 2011 PFS final rule with comment period entitled 
``Medicare Program; Payment Policies Under the Physicians Fee Schedule 
and Other Revisions to Part B for CY 2011'' (75 FR 73553 through 
76566), we finalized an eRx quality measure that would be used during 
the reporting periods in 2011 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'' electronic prescribing system.
    A qualified electronic prescribing system is a system that is 
capable of performing the following four specific functionalities:
     Generate a complete active medication list incorporating 
electronic 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 
electronic prescribing 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 being a qualified electronic prescribing 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 electronic prescribing 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 electronic prescribing 
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 the 
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

[[Page 54955]]

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 electronic prescribing 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 
electronic prescribing 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, in the proposed rule (76 FR 31549), we proposed changes to 
the eRx quality 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. This 2011 eRx measure, as it is 
written prior to the changes to the eRx measure we are finalizing in 
this final rule, is currently NQF-endorsed.
    In the June 2011 proposed rule (76 FR 31549), we proposed 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'' electronic prescribing system that 
performs the four functionalities previously discussed. We proposed to 
revise this description statement to indicate that the measure 
documents whether an eligible professional or group practice has 
adopted a ``qualified'' electronic prescribing 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.
    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, in the June 
2011 proposed rule (76 FR 31549), we also proposed that, for purposes 
of the 2011 eRx measure, Certified EHR Technology is required to comply 
with at least one of the Part D standards for the electronic 
transmission of prescriptions at 42 CFR 423.160(b)(2)(ii) (that is, 
NCPDP SCRIPT Version 8.1 and NCPDP SCRIPT Version 10.6). This 
requirement is consistent with the ONC certification requirements at 45 
CFR 170.304(b) and 170.205(b)(1) and (2). We received no comments 
regarding our proposal to require that Certified EHR Technology comply 
with the Part D standards for the electronic transmission of 
prescriptions at 42 CFR 423.160(b)(2)(ii). Therefore, for the reasons 
we stated previously, we are finalizing this requirement.
    Below we discuss comments regarding our proposal to change the 
description statement and what constitutes a ``qualified'' electronic 
prescribing system under the 2011 eRx quality measure.
    Comment: Several commenters supported our proposal to modify the 
2011 eRx measure to allow for use of Certified EHR Technology, and did 
not offer any other suggestions to modify the 2011 eRx measure.
    Response: We appreciate the commenter's supportive comments and are 
finalizing this proposal.
    Comment: One commenter asked us to reinstate G-codes G8445 and 
G8446, which were G-codes used in the eRx Incentive Program under 
previous program years that indicate actions other than the generation 
of an electronic prescription.
    Response: Our intention for 2011 is to focus on the reporting of 
actual electronic prescribing events. G-code G8445 indicates that, 
although an eligible professional has an electronic prescribing system, 
no prescriptions were generated during the denominator-eligible 
encounter. G-code G8446 indicates that, although an eligible 
professional has access to an electronic prescribing system, a 
prescription was not generated electronically during the encounter 
because, due to State or Federal law or regulation, such as a 
prescription could not be generated electronically. These two G-codes 
do not indicate the use of an electronic prescribing system to generate 
a prescription. Since it is our desire to concentrate solely on the 
reporting of actual prescribing events, we are not allowing for the use 
of G8445 or G8446 for reporting for the 2011 eRx incentive and the 2013 
eRx payment adjustment.
    Comment: Some commenters expressed concern over not being able to 
report the eRx measure in instances where, although an electronic 
prescription was generated, eligible professionals could not 
appropriately report the eRx measure because these encounters did not 
fall within the eRx measure's denominator. Therefore, to account for 
this limitation, these commenters asked us to include codes not 
currently included in the eRx measure's denominator, such as CPT 77427, 
which is a code tied to radiation therapy; CPT 99024, which is a code 
related to postoperative visits; and G0438, which is one of the two 
newly introduced annual wellness visit codes.
    Response: We appreciate the commenters' suggestions to modify the 
eRx measure's denominator to include these CPT and G codes. However, it 
is not operationally feasible to modify the analytics for the eRx 
measure used for the 2011 eRx incentive and 2013 eRx payment adjustment 
in this manner. Whereas our proposal to modify the measure for allowing 
use of Certified EHR Technology expands the types of

[[Page 54956]]

electronic prescribing systems recognized as ``qualified'' for purposes 
of reporting, the addition of denominator codes to the eRx measure for 
the 2011 eRx incentive and 2013 eRx payment adjustment would change the 
analytics of the eRx measure. We believe, however, the commenters' 
concern about not being able to report the eRx measure due to 
electronically prescribing during encounters not included in the 
measure's denominator is addressed by one of the additional significant 
hardship exemption categories we are finalizing in section II.B of this 
final rule. Specifically, for the reasons we state in section II.B.3.d 
of this final rule, we are finalizing a significant hardship exemption 
category due to insufficient opportunities to report the electronic 
prescribing measure due to limitations of the measure's denominator.
    Comment: Some commenters stated that, although they support our 
proposal to modify the eRx measure to allow for use of Certified EHR 
Technology, our proposal does not go far enough to align the eRx 
Incentive Program with the Medicare EHR Incentive Program, as the 
Certified EHR Technology must still meet the four functionalities of a 
``qualified'' electronic prescribing system.
    Response: We appreciate the commenters' feedback. We are working to 
address differences, where appropriate, between the eRx Incentive 
Program and Medicare EHR Incentive Program. However, we did not propose 
to require that Certified EHR Technology to still meet the four 
functionalities identified in the measure to be a ``qualified'' 
electronic system. As we stated in the proposed rule (76 FR 31550), 
``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.'' In addition, as we noted, we believe that Certified EHR 
Technology will be capable of performing all of the required 
functionalities for purposes of reporting the 2011 eRx quality measure.
    After considering the comments received and for the reasons we 
articulated previously, we are finalizing our proposal to modify the 
description of the 2011 eRx measure to indicate that the measure 
documents whether an eligible professional or group practice has 
adopted a ``qualified'' electronic prescribing system that performs the 
four functionalities previously described or is Certified EHR 
Technology as defined at 42 CFR 495.4 and 45 CFR 170.102. We believe 
that this change merely expands on the definition of a ``qualified'' 
electronic prescribing 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.
    However, as stated previously, 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, Certified EHR Technology must comply with the 
Part D standards for the electronic transmission of prescriptions at 42 
CFR 423.160(b)(2)(ii).
    As stated previously, section 1848(k)(2)(C) 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 eRx measure is currently an NQF-endorsed measure, this 
modification to change the 2011 eRx measure description has 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.
    With this change to the 2011 eRx measure description that we are 
finalizing in this final rule, eligible professionals (including those 
in group practices) that are participating in the eRx Incentive Program 
have the option of adopting either a qualified electronic prescribing 
system that performs the four functionalities previously discussed or 
Certified EHR Technology as defined at 42 CFR 495.4 and 45 CFR 170.102 
regardless of whether the Certified EHR Technology has all four of the 
functionalities previously described.
    Because the change to the 2011 eRx measure we are finalizing will 
not be effective until the effective date of this final rule, this 
change will 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 change to the 2011 eRx quality measure does 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 this final rule. The 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 was not finalized prior to 
the end of the 2012 eRx payment adjustment reporting period ended on 
June 30, 2011, the change to the eRx quality measures that we are 
finalizing in this final rule does not apply for purposes of reporting 
the eRx measure for the 2012 eRx payment adjustment. We note that this 
change to the eRx measure is consistent with our proposal under the CY 
2012 PFS proposed rule entitled ``Medicare Program; Payment Policies 
Under the Physician Fee Schedule and Other Revisions to Part B for CY 
2012'' (76 FR 42890) to change the eRx measure for the 2012 through 
2014 program years, which are the remaining years of the eRx Incentive 
Program.

B. Significant Hardship Exemption Categories for the 2012 eRx Payment 
Adjustment

1. Overview of the 2012 eRx Payment Adjustment
    As required by section 1848(a)(5) of the Act, and in accordance 
with our regulations at Sec.  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).

[[Page 54957]]

    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. Established Significant Hardship Exemption Categories 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 electronic prescribing.
    In order for eligible professionals and group practices to identify 
these categories for purposes of requesting a significant 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 reported 
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-nominated to 
participate in the 2011 eRx GPRO earlier this year.
3. Additional Significant Hardship Exemption Categories for the 2012 
eRx Payment Adjustment
    Following the publication of the CY 2011 PFS final rule with 
comment period, we received numerous requests to expand the categories 
under the significant hardship exemption for the 2012 eRx payment 
adjustment. Some stakeholders 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 posed a 
significant hardship and limited 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, 
in the proposed rule (76 FR 31551), we proposed 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. We also proposed to 
allow some additional time for submitting significant hardship 
exemption requests to CMS.
    Specifically, we proposed 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:
     Eligible professionals who register to participate in the 
Medicare or Medicaid EHR Incentive Programs and adopt Certified EHR 
Technology.
     Inability to electronically prescribe due to local, State, 
or Federal law or regulation.
     Limited prescribing activity.
     Insufficient opportunities to report the eRx measure due 
to limitations of the measure's denominator.
    Comment: One commenter suggested that we make changes to the 
regulation text at Sec.  414.92 to reflect our finalized changes.
    Response: We agree and have revised the significant hardship 
regulation at 42 CFR 414.92(c)(2)(ii) to reflect the changes we are 
finalizing in this final rule.
    Comment: One commenter was worried that if these additional 
significant hardship exemption categories to the 2012 eRx payment 
adjustment were finalized, he would not be able to earn a 2011 eRx 
incentive.
    Response: Incentives earned under the eRx Incentive Program are 
governed by section 1848(m)(2)(C) of the Act, whereas payment 
adjustments earned under the eRx Incentive Program are governed by 
section 1848(a)(5)(A) of the Act. The Secretary's authority to 
establish significant hardship exemption categories for those 
circumstances where compliance with the requirement for being a 
successful electronic prescriber would result in a significant hardship 
only apply to the provisions related to eRx payment adjustments. 
Separate criteria for being a successful electronic prescriber were 
established for the 2011 eRx incentive in the CY 2011 PFS final rule 
with comment period (75 FR 73553).
a. Eligible Professionals Who Register To Participate in the Medicare 
or Medicaid EHR Incentive Programs and Adopt Certified EHR Technology
    In the June 2011 proposed rule (76 FR 31551), we proposed this 
exemption category at 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 
electronic prescribing technology for purposes of the eRx Incentive 
Program until the list of Certified EHR Technologies 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 certified 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 considered Certified EHR Technology. 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

[[Page 54958]]

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 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 who are eligible for incentives under the Medicaid 
EHR Incentive Program with the majority of CY 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 electronic prescribing system for purposes of participation 
in the eRx Incentive Program, and Certified EHR Technology for purposes 
of participating in the Medicare and Medicaid EHR Incentive Programs), 
which could potentially be financially burdensome.
    Comment: Several commenters supported our proposal to add a 
significant hardship exemption category for the 2012 eRx payment 
adjustment for eligible professionals who register to participate in 
the Medicare or Medicaid EHR Incentive Programs and adopt Certified EHR 
Technology without offering any other suggestions regarding this 
proposed significant hardship exemption category. Several commenters 
also stated that they would request an exemption under this significant 
hardship exemption category, should the category be finalized.
    Response: We appreciate the commenters' supportive comments and are 
finalizing this significant hardship exemption category for the 2012 
eRx payment adjustment.
    Comment: Although commenters supported this significant hardship 
exemption category, several commenters recommended that we extend this 
significant hardship exemption category to eligible professionals other 
than those who have registered for the Medicare or Medicaid EHR 
Incentive Programs and adopted Certified EHR Technology, such as those 
eligible professionals who: (1) Intend to adopt EHR technology in 
either CY 2011 or 2012; (2) attest in CY 2012; or (3) achieve 
meaningful use in CY 2012.
    Response: We appreciate the commenters' feedback. However, we 
proposed this significant hardship exemption category for the 2012 eRx 
payment adjustment for those eligible professionals who have taken 
proactive steps, such as having an electronic prescribing system 
available for immediate use, towards participating in the Medicare or 
Medicaid EHR Incentive Programs, under which there is a component on 
reporting electronic prescribing activities. With respect to eligible 
professionals who intend to adopt EHR technology in CY 2011 or have not 
yet taken the steps required in order to apply for this significant 
hardship exemption, we believe that mere intent to adopt Certified EHR 
Technology or attest at a later date does not sufficiently demonstrate 
that an eligible professional will adopt Certified EHR Technology to 
participate in the Medicare or Medicaid EHR Incentive Programs. Unlike 
those eligible professionals who have already registered for the 
Medicare or Medicaid EHR Incentive Programs and have Certified EHR 
Technology available for immediate use, we would have to monitor and 
provide oversight over those eligible professionals who have not yet 
taken these steps to participate in the Medicare or Medicaid EHR 
Incentive Programs. To prevent these monitoring and oversight issues, 
we believe that all requirements to qualify for an exemption under this 
significant hardship exemption category must be met by October 1, 2011 
and prior to the time the eligible professional requests an exemption.
    Comment: While commenters supported our proposal to allow eligible 
professionals participating in the Medicaid EHR Incentive Program to 
request a significant hardship exemption from the 2012 eRx payment 
adjustment, some commenters stated that we should use the ``adopt, 
implement, and upgrade'' mechanism for receiving an incentive payment 
under the Medicaid EHR Incentive Program to determine whether an 
eligible professional should be exempt from the 2012 eRx payment 
adjustment.
    Response: We recognize that eligible professionals who participate 
in the Medicaid EHR Incentive Program may qualify for an incentive 
payment if they adopt, implement, upgrade, or demonstrate meaningful 
use of Certified EHR Technology in their first year of participation. 
Eligible professionals who attempt to qualify for an incentive payment 
under the Medicaid EHR Incentive Program by adopting, implementing, or 
upgrading Certified EHR Technology may request an exemption under this 
significant hardship exemption category provided that the eligible 
professional meets the requirements for this significant hardship 
exemption finalized in this final rule.
    Comment: One commenter asked that we clarify the term ``adopted'' 
as it applies to this significant hardship exemption category.
    Response: This significant hardship exemption category is intended 
for those eligible professionals who have registered to participate in 
the Medicare or Medicaid EHR Incentive Programs and adopted Certified 
EHR Technology. That is, in order to potentially qualify for an 
exemption under this significant hardship exemption category, an 
eligible professional or group practice must have Certified EHR 
Technology available for immediate use for purposes of participating in 
the Medicare or Medicaid EHR Incentive Programs.
    Comment: Some commenters asked whether eligible professionals 
practicing in states that have not yet fully implemented their Medicaid 
EHR Incentive Program, and therefore do not have the ability to 
register for participation in the Medicaid EHR Incentive Program, could 
apply for an exemption under this significant hardship exemption 
category.
    Response: We appreciate the commenters' feedback. We realize that 
not all states have fully implemented their Medicaid EHR Incentive 
Programs. Rather, the implementation of these Medicaid EHR Incentive 
Programs is pending. This, however, does not affect an eligible 
professional's ability to register to participate in his/her state's 
Medicaid EHR Incentive Program. Therefore, eligible professionals 
practicing in states where their respective Medicaid EHR Incentive 
Program have not yet been implemented are not precluded from requesting 
or qualifying for an exemption under this significant hardship 
exemption category. We note that eligible professionals must still meet 
the finalized requirements we are finalizing as described below, with 
regard this significant hardship exemption category.
    Comment: One commenter stated that eligible professionals 
participating under Medicare Advantage (MA) also be allowed to submit a 
significant hardship request under this exemption category.
    Response: We appreciate the commenters' feedback. To the extent

[[Page 54959]]

that professionals that participate under MA are eligible to 
participate in the eRx Incentive Program for purposes of the 2012 eRx 
payment adjustment, these eligible professionals may qualify for an 
exemption under this significant hardship exemption category.
    Comment: One commenter asked that practices working with Regional 
Extension Centers to achieve meaningful use under the Medicare or 
Medicaid EHR Incentive Programs be able to apply for this exemption.
    Response: We appreciate the commenter's feedback. As long as the 
eligible professionals within the practice meet the requirements 
described for this significant hardship exemption category for the 2012 
eRx payment adjustment, the eligible professionals within the practice 
may apply for this significant hardship exemption category.
    Comment: Several commenters opposed our proposed requirement to 
provide a serial number of the product the eligible professional has 
adopted in order to be eligible to request a significant hardship 
exemption under this category. Some of these commenters stated that a 
serial number, in some instances, not available for his or her 
Certified EHR Technology.
    Response: We solicited comments on whether eligible professionals 
should provide a serial number for their specific product. Based on the 
comments received and our belief that providing the ``CMS EHR 
Certification ID'' for the Certified EHR Technology which can be 
generated through the Certified HIT Products List (CHPL) Web site 
maintained by the Office of the National Coordinator for Health 
Information Technology (ONC) is sufficient evidence that an eligible 
professional possesses Certified EHR Technology available for immediate 
use, we will not require that eligible professionals provide his or her 
product's serial number when requesting an exemption under this 
significant hardship exemption category.
    Comment: Several commenters suggested that an eligible professional 
be provided with flexibility in providing proof that an eligible 
professional has adopted Certified EHR Technology for purposes of 
participating in the Medicare or Medicaid EHR Incentive Programs. Some 
commenters suggested that eligible professionals have the option of 
either providing a certification or serial number. One commenter stated 
it was unnecessary for eligible professionals to provide such proof 
because CMS already has access to information on those eligible 
professionals participating in the EHR Incentive Program.
    Response: To qualify for an exemption under this significant 
hardship exemption category, an eligible professional must have 
Certified EHR Technology available for immediate use. In order to 
efficiently review and process requests for exemptions under this 
significant hardship exemption category, it is necessary to apply 
uniform requirements for qualifying for an exemption under this 
significant hardship exemption category. Therefore, rather than allow 
eligible professionals to submit either a certification number or 
serial number as proof that these eligible professionals have adopted 
Certified EHR Technology, we are requiring that every eligible 
professional submit the certification number associated with his or her 
Certified EHR Technology in order to qualify for consideration for an 
exemption under this significant hardship exemption category. We are 
requiring an eligible professional provide us with the CMS EHR 
Certification ID, not a serial number, because, as commenters stated, a 
serial number is, in some instances, not available for his or her 
Certified EHR Technology. With respect to the comment stating CMS 
already has this information, we note that providing a certification 
number for his or her Certified EHR Technology is not required at the 
time an eligible professional registers for participation under the 
Medicare or Medicaid EHR Incentive Programs. Rather, an eligible 
professional is not required to provide a certification number for his 
or her Certified EHR Technology by the time of attestation.
    Comment: Some commenters stated that we should not perform a case-
by-case review of exemption under this significant hardship exemption 
category. Rather, eligible professionals participating in the Medicare 
or Medicaid EHR Incentive Programs should be automatically exempt from 
the 2012 eRx payment adjustment.
    Response: We appreciate the commenters' feedback. However, we are 
required by section 1848(a)(5)(b) of the Act to review requests for 
significant hardship exemption on a case-by-case basis.
    After considering the comments received and for the reasons 
previously discussed, we are finalizing this significant hardship 
exemption category for the 2012 eRx payment adjustment for eligible 
professionals or group practices who register to participate in the 
Medicare or Medicaid EHR Incentive Programs and adopt Certified EHR 
Technology. To be considered for a significant hardship exemption under 
this category, an eligible professional 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 42 CFR 495.4 and 45 CFR 170.102) that has been adopted 
for use no later than October 1, 2011.
    Please note that, in order to qualify for an exemption to the 2012 
eRx payment adjustment under this significant hardship exemption 
category, it is not necessary that an eligible professional receive an 
incentive payment under the Medicare or Medicaid EHR Incentive Program.
    A request for a significant hardship exemption category under this 
category will then be reviewed on a case-by-case basis. For purposes of 
this significant hardship exemption category, the identifying 
information consists of the ``CMS EHR Certification ID'' for the 
Certified EHR Technology which can be generated through the CHPL Web 
site maintained by ONC. In requesting a significant hardship exemption 
category under this category, an eligible professional is attesting 
that he or she either has purchased the specified Certified EHR 
Technology (as identified by the CMS ID) or has the specified Certified 
EHR Technology (as identified by the CMS ID) available for immediate 
use and that the eligible professional intends to use that Certified 
EHR Technology to qualify for a Medicare or Medicaid EHR incentive for 
payment year 2011 ``CMS EHR Certification ID'' for the Certified EHR 
Technology which can be generated through the CHPL Web site maintained 
by ONC.
b. Inability To Electronically Prescribe Due to Local, State, or 
Federal Law or Regulation
    In the June 2011 proposed rule (76 FR 31551), we proposed 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, 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

[[Page 54960]]

on a case-by-case 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).
    Comment: Several commenters supported our proposal to add a 
significant hardship exemption category for the 2012 eRx payment 
adjustment for eligible professionals who are unable to electronically 
prescribe due to local, State, or Federal law or regulation without 
offering any other suggestions regarding this significant hardship 
exemption category. Several commenters also indicated that they would 
request an exemption under this significant hardship exemption 
category, should the category be finalized.
    Response: We appreciate the commenters' supportive comments and are 
finalizing this category.
    Comment: Some commenters suggested that we encourage eligible 
professionals who cannot electronically prescribe narcotics because 
their electronic prescribing system is not yet compliant with Federal 
or State law to apply for an exemption under this significant hardship 
exemption category.
    Response: This significant hardship exemption category is indeed 
intended for these eligible professionals who mainly prescribe 
narcotics but, due to limitations in local, State, or Federal law or 
regulation, cannot submit these prescriptions electronically.
    After considering the comments received and for the reasons 
discussed, we are finalizing the significant hardship exemption 
category for the 2012 eRx payment adjustment for eligible professionals 
or group practices whose prescribing authority is limited 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). Please note that this significant hardship exemption 
category is not limited to those eligible professionals that practice 
in states that do not allow narcotic prescriptions to be transmitted 
electronically. Eligible professionals or group practices may request 
consideration for an exemption under this significant hardship category 
from application of the 2012 eRx payment adjustment, which will be 
reviewed on a case-by-case basis.
c. Limited Prescribing Activity
    In the June 2011 proposed rule (76 FR 31552), we proposed 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, 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 of an 
eligible professional or group practice to prescribe, much less 
electronically prescribe.
    Comment: Several commenters supported our proposal to add a 
significant hardship exemption category for the 2012 eRx payment 
adjustment for eligible professionals who have limited prescribing 
activity without offering any other suggestions regarding this 
significant hardship exemption category. Several commenters also stated 
that they would request an exemption under this significant hardship 
exemption category, should the category be finalized.
    Response: We appreciate the commenters' supportive comments. We are 
finalizing the significant hardship exemption category for eligible 
professionals who have limited prescribing activity.
    Comment: One commenter suggested that we establish a G-code for 
this significant hardship exemption category, similar to the G-codes 
we've established for the two significant hardship exemption categories 
finalized in 2011 PFS final rule described in section II.B.2 of this 
final rule.
    Response: We appreciate the commenters' feedback. Unfortunately, it 
is not technically feasible for us to create a G-code for this 
significant hardship prior to the deadline we are finalizing in section 
II.B.5 of this final rule for submitting significant hardship exemption 
requests for the 2012 eRx payment adjustment.
    After considering the comments received and for the reasons 
previously discussed, we are finalizing this significant hardship 
exemption category for the 2012 eRx payment adjustment for eligible 
professionals or group practices who have prescribing privileges but do 
not prescribe or very infrequently prescribe in 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 meet the 10-percent threshold for applicability of the payment 
adjustment. Exemption requests under this significant hardship 
exemption category will be reviewed on a case-by-case basis.
d. Insufficient Opportunities To Report the eRx Measure Due to 
Limitations of the Measure's Denominator
    To the extent an eligible professional or group practice has an 
electronic prescribing 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), in the proposed rule (76 FR 31552), we proposed 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 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-

[[Page 54961]]

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.
    Comment: Several commenters supported our proposal to add a 
significant hardship exemption category for the 2012 eRx payment 
adjustment for eligible professionals who have insufficient 
opportunities to report the electronic prescribing measure due to 
limitations of the measure's denominator without offering any other 
suggestions regarding this proposed significant hardship exemption 
category. Several commenters also stated that they would request an 
exemption under this significant hardship exemption category, should 
the category be finalized.
    Response: We appreciate the commenters' supportive comments and are 
finalizing this category.
    Comment: One commenter stated that eligible professionals who 
provide electronic prescriptions on a day different than the 
beneficiary's visit, such as the situation where an eligible 
professional provides a prescription during a postoperative visit, 
should be able to apply for a significant hardship exemption category.
    Response: We agree. This significant hardship exemption category is 
intended for instances such as these, where an eligible professional 
electronically prescribes but, because the measure's denominator only 
accounts for certain patient encounters, cannot report the electronic 
prescribing instance.
    After considering the comments received, we are finalizing the 
significant hardship exemption category for the 2012 eRx payment 
adjustment for eligible professionals or group practices that have an 
electronic prescribing system, electronically prescribes, and has 
denominator-eligible visits, but do 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). Requests for an exemption under this significant hardship 
exemption category will be reviewed on a case-by-case basis.
e. Significant Hardship Exemption Categories Not Proposed in the 
Proposed Rule
    Comment: While our proposal for additional significant hardship 
exemption categories was appreciated, several commenters suggested we, 
in general, add more hardship exemption categories for the 2012 eRx 
payment adjustment, or offered specific additional hardship 
circumstances for our consideration.
    Response: We appreciate the commenters' feedback. However, as 
discussed below, we are not finalizing any of the additional 
significant hardship exemption categories commenters suggested because 
such suggested significant hardship exemption categories were not 
proposed in the proposed rule, do not constitute a significant hardship 
under section 1848(a)(5) of the Act, or involve circumstances that may 
be covered by the limitations to the 2012 eRx payment adjustment 
established in the CY 2011 PFS final rule (75 FR 73562), the 
significant hardship exemption categories previously established in the 
CY 2011 PFS final rule, or the significant hardship exemption 
categories we are finalizing in this final rule.
    Comment: Several commenters stated that surgeons, neuro-
ophthalmologists, orthopedic doctors, and radio-oncologists could not 
meet the criteria for being a successful electronic prescriber for the 
2012 eRx payment adjustment because these specialties mainly prescribe 
narcotics. Several commenters also stated that optometrists, eligible 
professionals who prescribe narcotics, eligible professionals who 
prescribe durable equipment, and other physicians whose specialties do 
not necessitate providing prescriptions on a regular basis should be 
exempt from the 2012 eRx payment adjustment.
    Response: We appreciate the commenters' feedback. However, we 
believe that these suggested additional categories may already be 
addressed under the significant hardship exemption categories we are 
finalizing in this final rule.
    For those eligible professionals who mainly prescribe narcotics, 
durable equipment, or only provide prescriptions on a limited basis, we 
believe that that these circumstances may be addressed by the 
additional significant hardship exemption categories we are finalizing, 
such as the significant hardship exemption categories discussed in 
sections II.B.3.b, II.B.3.c, and II.B.3.d of this final rule. For 
example, the significant hardship exemption category for eligible 
professionals or group practices whose prescribing authority is limited 
to the extent that local, State, or Federal law or regulation described 
in section II.B.3.b. of this final rule is intended to provide for 
possible exemptions for those eligible professionals or group practices 
who cannot meet the criteria for being a successful prescriber for the 
2012 eRx payment adjustment because they mainly prescribe narcotics. 
This significant hardship exemption category may apply, for example, to 
eligible professionals such as surgeons who mainly prescribe narcotics 
in a State that does not permit or limits the transmission of a 
narcotic prescription through electronic means.
    The significant hardship exemption category for eligible 
professionals and group practices with limited prescribing activity 
described in section II.B.3.c of this final rule is intended to provide 
for possible exemption of eligible professionals who rarely prescribe 
yet still meet the 10-percent threshold for applicability of the 
payment adjustment and have at least 100 denominator eligible visits 
prior to June 30, 2011. This significant hardship exemption category 
may, for example, apply to those specialties where prescriptions are 
not given on a regular basis.
    Furthermore, the significant hardship exemption category for 
eligible professionals or group practices who do not normally write 
prescriptions associated with any of the types of visits included in 
the eRx quality measure's denominator described in section II.B.3.d of 
this final rule is intended to exempt those eligible professionals such 
as surgeons or radio-oncologists who usually provide prescriptions 
outside denominator-eligible encounters.
    Comment: Several commenters stated that chiropractors should be 
exempt from the 2012 eRx payment adjustment.
    Response: With respect to chiropractors, as we mentioned previously 
in section II.B.1. of this final rule, we note that we finalized 
limitations to the 2012 eRx payment adjustment in the CY 2011 PFS final 
rule (75 FR 73562). Because chiropractors are not within the category 
of eligible professionals to which the 2012 eRx payment adjustment 
applies, chiropractors are not subject to the 2012 eRx payment 
adjustment.
    Comment: Some commenters stated that eligible professionals who 
only see Medicare patients on an occasional basis, part-time providers, 
eligible professionals who dispense medications from their offices, 
eligible professionals who only perform home visits for patients, 
eligible professionals who practice on military bases, and eligible 
professionals who work in nursing homes or long-term care facilities 
should be exempt from the 2012 eRx

[[Page 54962]]

payment adjustment because these eligible professionals either only 
have limited opportunities to prescribe medications or cannot 
electronically prescribe on-site.
    Response: With respect to these eligible professionals with a 
limited practice, such as part-time providers, we believe that, given 
the limitations finalized in the CY 2011 PFS final rule (75 FR 73562) 
that are described in section II.B.1 of this final rule, these groups 
potentially may not be subject to the 2012 eRx payment adjustment. 
Specifically, an eligible professional will not be subject to the 2012 
eRx payment adjustment if the eligible professional 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. For those 
eligible professionals who practice off-site, such as eligible 
professionals who perform home visits, we note that, although an 
eligible professional may not have a readily available electronic 
prescribing system during instances such as a home visit, we believe 
that these eligible professionals still have the ability to dispense an 
electronic prescription. Therefore, we do not believe that these 
instances constitute significant hardships in the manner that these 
significant hardship exemption categories we are finalizing do.
    Comment: Several commenters stated that physicians who are over 60, 
eligible for Social Security benefits, or nearing retirement may find 
it difficult to justify the cost of implementing electronic prescribing 
systems.
    Response: With respect to eligible professionals who are over 60, 
eligible for social security benefits, or nearing retirement, these 
scenarios were raised by commenters during the comment period and 
addressed in the CY 2011 PFS rule. As we stated in the CY 2011 PFS 
final rule (75 FR 73564), we believe these instances do not constitute 
significant hardships in the manner that these significant hardship 
exemption categories we are finalizing do. We believe that encouraging 
the use of electronic prescribing outweighs the cost of purchasing an 
electronic prescribing system, because we believe use of these systems 
will readily provide patient prescription history leading to better 
management of patient prescriptions and greater patient safety and 
care.
    Comment: Some commenters also suggested that a significant hardship 
category be created for eligible professionals who did not meet the 
criteria for being a successful electronic prescriber for the 2012 eRx 
payment adjustment due to circumstances beyond one's control, such as 
natural disasters (for example, major floods), being on maternity 
leave, or having patients who do not consent to the use of electronic 
prescribing.
    Response: With respect to eligible professionals who did not meet 
the criteria for being a successful electronic prescriber for the 2012 
eRx payment adjustment due to circumstances beyond one's control, such 
as being on maternity leave or having patients who do not consent to 
the use of electronic prescribing, we understand that unforeseen 
circumstances may arise that prevent an eligible professional from 
reporting the eRx measure. However, we beleive that these circumstances 
may be addressed by the limitations to the 2012 eRx payment adjustment 
we have finalized.
    With respect to those eligible professionals who have experienced 
natural disasters during a substantial portion of the 2012 eRx payment 
adjustment reporting period (that is, January 1, 2011 through June 30, 
2011), such as the case of major flooding in the Midwest, we believe 
that these eligible professionals may apply for an exemption under the 
significant hardship exemption categories we have previously finalized 
(that is, the significant hardship exemption categories we finalized in 
the CY 2011 PFS final rule). For example, as described in section 
II.B.2 of this final rule, in the CY 2011 PFS final rule, we 
established a significant hardship exemption for those eligible 
professionals who practice in an area with limited available pharmacies 
for electronic prescribing. If a natural disaster such as a major flood 
leaves electronic prescribing systems, both in physician offices and 
pharmacies, offline, then an eligible professional may potentially 
qualify for a significant hardship exemption under this significant 
hardship exemption category. In addition, if, for instance, an eligible 
professional's practice is severely stunted due to a devastating 
natural disaster, an eligible professional could request consideration 
for an exemption under the limited prescribing activity significant 
hardship exemption category.
    Comment: Several commenters have also requested that a significant 
hardship exemption category to the 2012 eRx payment adjustment be 
established for those eligible professionals who attempted but did not 
meet the criteria for being a successful electronic prescriber for the 
2012 eRx payment adjustment due to problems encountered using the 
electronic prescribing system or reporting the eRx quality measure via 
claims. For example, some commenters stated they reported G-code G8443 
(which was the eRx measure's numerator under the 2009 eRx Incentive 
Program) instead of G-code G8553, which is the 2011 eRx measure's 
numerator. Several commenters stated that, although they reported G-
code G8553 on claims, the G-codes were stripped because the eligible 
professionals were submitting claims with a zero dollar amount. Some 
commenters have also encountered vendor issues with respect to 
reporting the eRx measure.
    Response: We appreciate the commenters' feedback. In general, we 
understand that problems may occur that prevent the successful 
reporting of the eRx measure. However, we do not believe that these 
errors constitute a significant hardship under section 1848(a)(5)(B) of 
the Act. Rather, these are reporting errors that may have prevented an 
eligible professional from successfully reporting the eRx measure.
    In addition, with respect to those eligible professionals who 
mistakenly reported G-code G8443, which was one of codes in the eRx 
measure's numerator in 2009, instead of G8553, which has been the only 
code in the eRx measure's numerator since 2010, we note that the public 
was given ample notice via rulemaking, which included an opportunity to 
comment on the eRx measure's proposed numerator G-code. Educational 
materials and other outreach opportunities such as national provider 
calls and special open door forums also provided instruction to report 
G8553 for all reporting periods occurring in 2011.
    With respect to those instances where the G-codes were stripped 
because the eligible professionals were submitting claims with a zero 
dollar amount, we note that eligible professionals were provided with 
guidance as to how to successfully report the eRx measure. 
Specifically, we provided a guidance document titled ``Claims-Based 
Reporting Principles for Electronic Prescribing (eRx) Incentive 
Program,'' which provided instructions on how to properly report the 
eRx measure via claims. This document, which is available at https://www.cms.gov/ERxIncentive/06_E-Prescribing_Measure.asp#TopOfPage, 
states that, if a system does not allow a $0.00 line-item charge, a 
nominal amount can be substituted.''
    With respect to experiencing vendor issues, we understand that 
these eligible professionals have made a good faith

[[Page 54963]]

effort to successfully report the eRx measure for the 2012 eRx payment 
adjustment. However, we do not believe that these errors constitute a 
significant hardship.
    Comment: Some commenters also stated that small business practices 
should be exempt from the 2012 eRx payment adjustment, since the 
purchase of an electronic prescribing system puts a significant 
financial burden on these small practices.
    Response: We understand that there are significant costs associated 
with purchasing an electronic prescribing system. However, we do not 
believe that this constitutes a significant hardship under section 
1848(a)(5)(8) of the Act. We believe that encouraging the use of 
electronic prescribing outweighs the cost of purchasing an electronic 
prescribing system, because we believe use of these systems will 
readily provide patient prescription history, leading to better 
management of patient prescriptions and greater patient safety and 
care.
    As stated earlier, after considering the comments received and for 
the reasons we discussed previously, we are finalizing the all of the 
following additional significant hardship exemption categories for the 
2012 eRx payment adjustment:
     Eligible professionals who register to participate in the 
Medicare or Medicaid EHR Incentive Programs and Adopt Certified EHR 
Technology.
     Inability to electronically prescribe due to local, State, 
or Federal law or regulation.
     Limited prescribing activity.
     Insufficient opportunities to report the eRx measure due 
to limitations of the measure's denominator.
    Therefore, we are finalizing our proposal to modify 42 CFR 414.92 
to specify these significant hardship exemption categories to the 2012 
eRx payment adjustment as well as making a minor edit to 42 CFR 414.92.
4. Process for Requesting Significant Hardship Exemption Categories for 
the 2012 eRx Payment Adjustment
    In the June 2011 proposed rule (76 FR 31552), we proposed a process 
different from that finalized in the CY 2011 PFS final rule for 
requesting the significant hardships for the 2012 eRx payment 
adjustment described above. Specifically, to request a significant 
hardship exemption for any of the categories proposed and previously 
described for the 2012 eRx payment adjustment, we proposed that an 
eligible professional or group practice provide to us, via a Web-based 
tool or interface (or by mail, if it is not technically feasible for 
use to develop such a Web site) 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. 
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.
     An attestation of the accuracy of the information 
provided.
    In addition, we proposed 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 whether a significant 
hardship exists.
    We did not propose, nor are we allowing, 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.
    Comment: While several commenters supported our proposal to use a 
Web-based tool to process requests for significant hardship exemptions, 
some commenters stated that we should allow an eligible professional or 
group practice's administration and staff to complete a significant 
hardship exemption request on his/her behalf.
    Response: We appreciate the commenter's feedback. However, we 
believe it is necessary that the eligible professional complete the 
request for an exemption to the 2012 eRx payment adjustment for the 
finalized significant hardship exemption category(ies). The eligible 
professional must personally attest with respect to the accuracy of the 
statements provided in the request for an exemption. We believe that 
requiring an eligible professional, rather than his or her staff, to 
apply for an exemption will not result in a significant burden to the 
eligible professional as the eligible professional need only request an 
exemption once.
    However, for group practices, according to the CY 2011 PFS final 
rule, a single individual is designated as the single contact person 
for that group practice. Because, this individual has previously been 
chosen to act on behalf of the group for issues relating to the eRx 
Incentive Program, the contact person for the respective group practice 
must submit the request for an exemption for the respective group 
practice under these finalized significant hardship exemption 
categories. In submitting the request for an exemption under these 
finalized significant hardship exemption categories, this contact 
person is attesting to the accuracy of the information provided on 
behalf of the group practice.
    Comment: One commenter suggested that we develop a tool that allows 
for the submission of supporting documentation, should additional 
information need to be submitted in order to thoroughly review a 
request for an exemption.
    Response: While we agree that such a tool would be useful, at this 
time, it is not technically feasible for us to develop an upload 
function on the Web-based tool in time to receive supporting 
documentation. Despite our inability to provide an upload tool for 
submitting additional documentation, we note that all required 
information for a request for an exemption may be provided on the Web-
based tool. In the event that we specifically requests additional 
documentation in order to thoroughly review an exemption request 
though, the eligible professional will send this documentation to us 
via mail.
    Comment: One commenter suggested that CMS develop the submission 
tool in such a way as to prevent an eligible professional from 
submitting incomplete information. Another commenter suggested that we 
develop the Web-based tool to be user friendly.

[[Page 54964]]

    Response: It is our intention that the Web-based tool be easily 
navigable. This includes indicating which fields are required for the 
eligible professional to complete in order to submit a complete request 
for a significant hardship exemption. We also intend to provide 
additional guidance for eligible professionals to learn how to navigate 
through the Web-based tool for purposes of submitting a significant 
hardship exemption request and to minimize the potential for errors.
    Comment: Some commenters stated that we should encourage eligible 
professionals to submit more than one significant hardship exemption, 
should more than one apply.
    Response: While an eligible professional need only request a 
significant hardship exemption to the 2012 eRx payment adjustment under 
one category, we are allowing eligible professionals to request a 
significant hardship exemption under more than one exemption category, 
should more than one category apply. While an eligible professional 
will only be required to select one applicable significant hardship 
exemption category when entering their request in the Web-based tool, 
they can include the other categories that apply in their justification 
statement should more than one category apply.
    Comment: One commenter stated that we should encourage eligible 
professionals who have already reported the eRx measure during the 
applicable 2012 eRx payment adjustment payment reporting period to 
apply for a significant hardship exemption, should one apply.
    Response: We did not propose to limit the pool of eligible 
professionals who can apply for an exemption request under the 
finalized significant hardship exemption categories. If an eligible 
professional believes that he or she qualifies for an exemption under 
one or more of the significant hardship exemption categories for the 
2012 eRx payment adjustment, he or she may submit a request for an 
exemption regardless of whether he or she attempted to report the eRx 
measure for purposes of the 2012 eRx payment adjustment. As noted 
previously, all requests for a significant hardship exemption from the 
2012 eRx payment adjustment will be reviewed on a case-by-case basis.
    Comment: One commenter stated that CMS should provide a resource to 
address questions eligible professionals may have about submitting 
significant hardship exemption requests.
    Response: We appreciate the commenter's feedback. We note that 
questions regarding use of the Web-based tool may be directed to the 
Quality Net Help Desk. The Quality Net Help Desk may be contacted via 
telephone at 1-866-288-8912 or via e-mail at Qnetsupport@sdps.org. 
Further information on the QualityNet Help Desk is available at https://www.cms.gov/ERxIncentive/11_HelpDeskSupport.asp#TopOfPage.
    Comment: Some commenters stated that CMS should, prior to allowing 
for submission of significant hardship requests, notify each eligible 
professional of the following: (1) Whether an eligible professional 
falls under a limitation to the 2012 eRx payment adjustment that was 
finalized in the 2011 PFS Final Rule and described in section II.B.1 of 
this final rule and (2) whether an eligible professional has met the 
criteria for being a successful electronic prescriber for the 2012 eRx 
payment adjustment.
    Response: We appreciate the commenter's feedback. However, it is 
not technically feasible for us to provide notification to each 
eligible professional as to whether the 2012 eRx payment adjustment 
applies or whether an eligible professional has met the criteria for 
being a successful electronic prescriber for the 2012 eRx payment 
adjustment prior to the deadline for submitting a significant hardship 
request. Claims for dates of service within the 2012 eRx payment 
adjustment reporting period (that is, January 1, 2011 through June 30, 
2011) are still being processed and analyzed.
    Furthermore, we note that the burden of requesting an exemption to 
the 2012 eRx payment adjustment under the finalized significant 
hardship exemption categories lies with the eligible professional or 
group practice.
    Comment: Some commenters stressed the importance of providing 
sufficient education and outreach so that eligible professionals are 
aware of the finalized proposals relating to the addition of 
significant hardship exemption categories, as well as the process for 
submitting significant hardship requests for the 2012 eRx payment 
adjustment. Some commenters suggested that we work with physician 
organizations to inform eligible professionals of these changes.
    Response: We agree and intend to provide education and outreach 
opportunities to inform eligible professionals of the changes to the 
program we are finalizing in this final rule. We also plan to work with 
organizations outside of CMS to ensure that the provider community is 
aware of these changes.
    Comment: One commenter suggested that CMS work to avoid the 
reprocessing of claims.
    Response: We appreciate the commenter's feedback. We will work to 
avoid the reprocessing of claims. We intend to complete our review of 
the request for exemptions under the significant hardship exemption 
categories finalized in this final rule and the CY 2011 PFS final rule 
in time to instruct the carrier/MACs as to those eligible professionals 
or group practices we determine are exempted from the 2012 eRx payment 
adjustment. 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, particularly in instances where eligible professionals submit 
significant hardship exemption requests closer towards the November 1, 
2011 deadline, 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 
or group practice's request for a significant hardship exemption after 
January 1, 2012, we would need to reprocess all claims for services 
furnished up to that point in 2012 that were paid at the reduced PFS 
amount, which we anticipate may take several months. In order to avoid 
the reprocessing of claims, we encourage eligible professionals who 
wish to submit a significant hardship exemption request to do so as 
soon as possible, rather than waiting until the November 1, 2011 
deadline to submit such a request.
    Comment: One commenter stated that submitting significant hardship 
exemption requests via mail would be too burdensome.
    Response: We appreciate the commenter's feedback. Based on the 
comments received, we believe the Web-based tool is the most effective 
way to receive and process significant hardship exemption requests. We 
are only allowing individual eligible professionals to submit a 
significant hardship exemption request via the Web-based tool.
    Comment: One commenter sought clarification and instructions as to 
how to request an exemption under the significant hardship exemption 
categories via the Web-based tool and asked how we will provide a case-
by-case review of these requests.

[[Page 54965]]

    Response: We appreciate the commenter's feedback. Instructions on 
how to access the Web-based tool and request an exemption will be 
available on the eRx Incentive Program Web site at http://www.cms.gov/ERxIncentive/. With respect to how we will review all exemption 
requests, given the requirement that we do so on a case-by-case basis, 
we expect that each review will be tailored to the specific case 
presented.
    After considering all the comments received and for the reasons 
stated previously, we are finalizing the following process to request a 
significant hardship exemption from the 2012 eRx payment adjustment 
under any of the categories (including multiple categories, if 
applicable) that we are finalizing in this final rule:
     Identifying information which include 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 
(as was previously described).
     An attestation of the accuracy of the information 
provided.
    Individual eligible professionals must submit significant hardship 
exemption requests using a Web-based tool only. Information on how to 
access the Web-based tool as well as detailed instructions for applying 
for a significant hardship exemption will be available on the eRx 
Incentive Program Web site at http://www.cms.gov/erxincentive/.
    Although in the June 2011 proposed rule (76 FR 31552), we proposed 
to allow group practices participating in the eRx Incentive Program as 
an eRx GPRO to also submit an exemption request via the Web-based tool, 
for technical reasons, we cannot allow group practices to submit 
significant hardship exemption requests using this Web-based tool. In 
the proposed rule, we also stated that, if not technically feasible to 
use a Web-based tool, an eligible professional or group practice may 
submit an exemption request via mail. As such, group practices who wish 
to submit an exemption request under one or more of the finalized 2012 
eRx payment adjustment significant hardship exemption categories must 
submit this request via a mailed letter containing all of the 
information specified in the bullet points previously listed. More 
information on how group practices may request a significant hardship 
via mail, such as the mailing address for submitting this request, will 
be available on the eRx Incentive Program Web site at http://www.cms.gov/erxincentive/.
    Comment: Some commenters asked us to establish a process whereby an 
eligible professional or group practice may appeal a denial of a 
request for an exemption from the 2012 eRx payment adjustment under the 
finalized significant hardship exemption categories.
    Response: We appreciate the commenters' feedback. We will perform a 
case-by-case review of each request for an exemption to the 2012 eRx 
payment adjustment. We believe that this review of a request will be 
sufficient to determine whether an eligible professional or group 
practice should be granted the exemption. Therefore, we are not 
providing a means for reconsideration of our determination to approve 
or deny exemption requests. We note that, although there is no 
reconsideration of our determination regarding an exemption, eligible 
professionals and group practices may contact the QualityNet Help Desk 
should they have additional questions regarding our determination.
5. Deadline for Submission of Significant Hardship Exemption Requests 
for the 2012 eRx Payment Adjustment
    We proposed 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 (76 FR 
31553). We also proposed to extend the deadline for submitting requests 
for consideration for the two significant hardship exemption category 
categories (that is, eligible professional or group practice practices 
in rural areas with limited high speed internet access and eligible 
professional or group practice practices in an area with limited 
available pharmacies for electronic prescribing) 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.
    We also considered providing eligible professionals and group 
practices with additional time to submit requests for a significant 
hardship exemption under the proposed additional categories but stated 
that we believed that doing so might result in the need to reprocess 
claims for 2012 services for eligible professionals. We also proposed a 
submission deadline for significant hardship exemption requests no 
later than 5 business days after the effective date of the final rule 
to the extent the final rule was not effective by October 1, 2011, and 
sought comments whether such time would be adequate.
    Comment: Some commenters stated that CMS will be overwhelmed by 
requests for significant hardship exemption categories, even with the 
creation and use of a Web-based tool, and, as a result, will not be 
able to timely review all significant hardship exemption requests.
    Response: Since this is the first payment adjustment implemented 
under the eRx Incentive Program, we cannot determine how many requests 
we will receive. However, we will make every effort to review and 
process requests for significant hardship exemption categories in a 
manner as to avoid the reprocessing of claims.
    Comment: Several commenters supported our proposal to extend the 
deadline for submitting significant hardship exemption requests for 
purposes of the 2012 eRx payment adjustment to October 1, 2011. Several 
commenters stated that a deadline of 5 business days after the 
effective date provides insufficient time for eligible professionals to 
be informed of and learn how to request a significant hardship 
exemption. Therefore, these commenters suggested other deadlines that 
they believe would allow for sufficient time for eligible professionals 
to be informed of and request an exemption. Some commenters suggested 
that eligible professionals and group practices be given at least 30 or 
60 days after the effective date of the rule to submit significant 
hardship requests. Some commenters asked that the deadline for 
submitting a significant hardship exemption be extended to December 31, 
2011. One commenter asked that the deadline for submitting requests for 
significant hardship exemption categories be extended to 180 days 
following publication of this final rule.
    Response: We appreciate the commenters' feedback. We understand the 
commenters' concerns and believe it is important to provide eligible 
professionals with sufficient time to be informed of our finalized 
changes to the eRx Incentive Program for CY 2011. In order to ensure 
that eligible professionals are fully informed about these significant 
hardship exemption categories to the 2012 eRx payment adjustment, we 
are finalizing a deadline of November 1, 2011 for eligible 
professionals to submit a significant hardship request under the 
finalized significant hardship exemption

[[Page 54966]]

categories for the 2012 eRx payment adjustment.
    Although we still believe the October 1, 2011 deadline would 
provide sufficient time for eligible professionals to be informed of 
and request an exemption, we are finalizing an extended deadline of 
November 1, 2011 to provide eligible professionals with more time to 
submit requests for a significant hardship exemption. Eligible 
professionals and group practices do not need to wait until the 
effective date of this final rule to submit a request for an exemption 
from the 2012 eRx payment adjustment. Rather, eligible professionals 
and group practices may begin submitting exemption requests immediately 
following the display of this final rule. As such, we believe that 
eligible professionals will have ample time to submit an exemption 
request.
    Comment: Some commenters asked to align the deadline for submitting 
significant hardship exemption requests under the eRx Incentive Program 
with the deadline for achieving meaningful use under the Medicare or 
Medicaid EHR Incentive Programs.
    Response: We appreciate the commenters' feedback. However, it is 
not technically feasible for us to extend the deadline for submitting 
significant hardship exemption category requests past November 1, 2011 
in order to align it with the deadline for achieving meaningful use 
under the Medicare or Medicaid EHR Incentive Programs which for payment 
year 2011 does not occur until 2012. In order to avoid retroactive 
payments and claims reprocessing, we must allow for sufficient time to 
analyze the request and make the necessary system changes prior to 
January 1, 2012.
    After considering the comments received and for the reasons we 
explained previously, we are finalizing a deadline of November 1, 2011, 
for the submission of significant hardship exemption requests for 
purposes of the 2012 eRx payment adjustment. Therefore, an individual 
eligible professional must submit his or her request for a request for 
a significant hardship exemption via the Web-based tool by November 1, 
2011. Please note that eligible professionals who wish to request a 
significant hardship exemption for one of the two significant hardship 
exemption categories that were previously finalized in the CY 2011 PFS 
final rule (75 FR 73564 through 73565) will not be able to do so via 
claims-based submission of a G-code, as the June 30, 2011 deadline for 
requesting the two established significant hardship categories in this 
manner has passed. Group practices must submit a request for a 
significant hardship exemption via letter that must be postmarked no 
later than November 1, 2011.
    We are implementing a deadline of November 1, 2011, and not later, 
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 adjustment. 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 will need 
to reprocess all claims for services furnished up to that point in 2012 
that were paid at the reduced PFS amount.
    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 will be final.

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 solicited public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. ICRs Related to Changes to the 2011 eRx 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 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 proposed would be 
minimal and would be limited to the time and effort associated with 
gathering the requested information described in section II.B.4 of this 
final rule and submitting the information to CMS in the specified form 
and manner. Whether the application can be submitted online or mail, we 
do not anticipate it taking more than a 2 hours per eligible 
professional or group practice to review the significant hardship 
exemption, determine which category(ies) 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 subject to the 2012 eRx 
payment adjustment unless they become a successful electronic 
prescriber (that is, report the eRx measure at least 10 times during 
the 6-month reporting period) or receive 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

[[Page 54967]]

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 209,000 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 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 209,000 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).
    Comment: Some commenters suggested that CMS' estimates regarding 
how many eligible professionals will apply for a significant hardship 
exemption for the 2012 eRx payment adjustment is too low.
    Response: We appreciate the commenters' feedback. While our minimum 
estimate are based on our participation numbers from the 2009 eRx 
Incentive Program, which is the latest complete participation 
information available for the eRx Incentive Program at this time, we 
note that the maximum estimate was based on an analysis of 2010 claims 
data to determine how many MDs, DOs, podiatrists, nurse practitioners, 
and physician assistants have at least 100 denominator eligible visits 
and meet the 10% threshold in a 6-month period. Thus, the maximum 
estimate assumes that every eligible professional who needs to report 
the eRx measure or be subject to the payment adjustment will apply for 
a significant hardship exemption. Unfortunately, because we never 
implemented a payment adjustment under the eRx Incentive Program 
before, we cannot precisely estimate how many eligible professionals 
will apply for a significant hardship exemption.

IV. Regulatory Impact Statement

    This final rule includes changes to the eRx Incentive Program. The 
first change we are finalizing 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 is being revised to indicate 
whether an eligible professional has adopted a qualified electronic 
prescribing system, which is a system that meets the four 
functionalities discussed above, or Certified EHR Technology as defined 
at 42 CFR 495.4 and 45 CFR 170.102. The second change we are finalizing 
is the adoption of additional significant hardship exemption categories 
for the 2012 eRx payment adjustment. The additional significant 
hardship exemption categories we are finalizing 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 eRx measure due to 
limitations of the measure's denominator. Finally, this final rule 
provides an extension of the deadline for submitting requests for 
exemptions from the 2012 eRx payment adjustment under the additional 
significant hardship exemption categories, as well as the two 
significant hardship codes established in the CY 2011 PFS final rule 
with comment period: (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 
(January 18, 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 changes will 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 final 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 final 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 
final rule will affect a substantial number of small entities (that is, 
several thousand or more).
    We interpret the requirement for preparation of an Initial 
Regulatory Flexibility Analysis as applying to final 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 
final rules will have a significant positive impact. In this case, the 
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 additional significant hardship exemption 
categories, if applicable, for purposes of the 2012 eRx payment 
adjustment will

[[Page 54968]]

reduce burden for eligible professionals. The modification to the eRx 
measure eliminates 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 is no 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 additional significant hardship exemption 
categories for the 2012 eRx payment adjustment we are finalizing in 
this final rule will reduce the number of eligible professionals that 
will otherwise be subject to a 1.0 percent adjustment in the PFS amount 
for covered professional services furnished in 2012. Also, the changes 
we are finalizing will 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 will need to 
either be a successful electronic prescriber or request a hardship 
exemption to avoid the 2012 eRx 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 will potentially request 
a significant hardship exemption for one of the hardship exemption 
categories. While we are aware, from public comments received in 
response to the CY 2011 PFS proposed rule and final rule 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 additional significant hardship exemption categories, we are not 
able to quantify in detail how many eligible professionals these 
additional significant hardship exemption categories could apply to 
since each eligible professional's individual circumstances are unique. 
We believe that any cost associated with requesting a significant 
hardship exemption under these categories will be minimal since it will 
be limited to the time and effort associated with submitting an 
exemption request based on a finalized significant hardship exemption 
category from the 2012 eRx payment adjustment either via the Web tool 
or by mail. We believe that any cost associated with requesting a 
significant hardship exemption will, 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 changes we are 
finalizing will 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.
    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 604 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 
final rule will 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 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 for 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, the Centers for Medicare 
& Medicaid Services amends 42 CFR part 414 as set forth below:

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

0
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)).

Subpart B--Physicians and Other Practitioners

0
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.

[[Page 54969]]

    (D) Inability to electronically prescribe due to local, State or 
Federal law or regulation.
    (E) Limited prescribing activity.
    (F) Insufficient opportunities to report the eRx measure due to 
limitations 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: August 25, 2011.
Donald M. Berwick,
Administrator, Centers for Medicare & Medicaid Services.

    Approved: August 26, 2011.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2011-22629 Filed 8-31-11; 11:15 am]
BILLING CODE 4120-01-P
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