Federal Register / Vol. 76, No. 172 / Tuesday, September 6, 2011 / Rules and Regulations 54953 

must clearly identify the information 

that is claimed confidential by marking 

the specific information on each page 

with a label such as ‘‘confidential 

business information,’’ ‘‘proprietary,’’ or 

‘‘trade secret.’’ 

(e) No claim of confidentiality. If no 

claim of confidentiality is indicated on 

Form U submitted to EPA under this 

part; if Form U lacks the certification 

required by § 711.15(b)(1); if 

confidentiality claim substantiation 

required under paragraphs (b), (c), and 

(d) of this section is not submitted with 

Form U; or if the identity of a chemical 

substance listed on the non-confidential 

portion of the Master Inventory File is 

claimed as confidential, EPA may make 

the information available to the public 

without further notice to the submitter. 

§ 711.35 Electronic filing. 

(a) You must use e-CDRweb to 

complete and submit Form U (EPA 

Form 7740–8). Submissions may only be 

made as set forth in this section. 

(b) Submissions must be sent 

electronically to EPA via CDX. 

(c) Access e-CDRweb and 

instructions, as follows: 

(1) By Web site. Go to the EPA 

Inventory Update Reporting Internet 

homepage at http://www.epa.gov/iur 

and follow the appropriate links. 

(2) By phone or e-mail. Contact the 

EPA TSCA Hotline at (202) 554–1404 or 

TSCA-Hotline@epa.gov for a CD–ROM 

containing the instructions. 

[FR Doc. C1–2011–19922 Filed 9–2–11; 8:45 am] 

BILLING CODE 1505–01–D 

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. 

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 

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54954 Federal Register / Vol. 76, No. 172 / Tuesday, September 6, 2011 / Rules and Regulations 

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_EPrescribing_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 

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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 denominatoreligible 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 

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54956 Federal Register / Vol. 76, No. 172 / Tuesday, September 6, 2011 / Rules and Regulations 

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 prescriptionrelated 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 NQFendorsed 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 § 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). 

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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 § 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 

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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 

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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-bycase 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_Registration

andAttestation.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 

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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-bycase 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-bycase 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- 

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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 radiooncologists 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 

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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 Gcodes 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_EPrescribing_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 

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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 email 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 Webbased 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. 

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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 Webbased 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 caseby-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 Webbased 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-bycase review of these requests. 

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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-bycase 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 Webbased 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 

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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 claimsbased 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 

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Federal Register / Vol. 76, No. 172 / Tuesday, September 6, 2011 / Rules and Regulations 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 × 2 hours 

per eligible professional) to 418,000 

hours (209,000 eligible professionals × 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 

× 21,800 hours) and $24,244,000 ($58 

per hour × 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 

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54968 Federal Register / Vol. 76, No. 172 / Tuesday, September 6, 2011 / Rules and Regulations 

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 

■ 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 

■ 2. Section 414.92 is amended by 

revising paragraph (c)(2)(ii) to read as 

follows: 

§ 414.92 Electronic Prescribing Incentive 

Program. 

* * * * * 

(c) * * * 

(2) * * * 

(ii) Significant hardship exception. 

CMS may, on a case-by-case basis, 

exempt an eligible professional (or in 

the case of a group practice under 

paragraph (e) of this section, a group 

practice) from the application of the 

payment adjustment under paragraph 

(c)(2) of this 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. 

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Federal Register / Vol. 76, No. 172 / Tuesday, September 6, 2011 / Rules and Regulations 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 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Part 154 

[CMS–9999–F] 

RIN 0938–AR26 

Rate Increase Disclosure and Review: 

Definitions of ‘‘Individual Market’’ and 

‘‘Small Group Market’’ 

AGENCY: Center for Consumer 

Information and Insurance Oversight, 

Centers for Medicare & Medicaid 

Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule amends a May 

23, 2011, final rule entitled ‘‘Rate 

Increase Disclosure and Review’’. The 

final rule provided that, for purposes of 

rate review only, definitions of 

‘‘individual market’’ and ‘‘small group 

market’’ under State rate filing laws 

would govern even if those definitions 

departed from the definitions that 

otherwise apply under title XXVII of the 

Public Health Service Act (PHS Act). 

The preamble to the final rule requested 

comments on whether this policy 

should apply in cases in which State 

rate filing law definitions of ‘‘individual 

market’’ and ‘‘small group market’’ 

exclude association insurance policies 

that would be included in these 

definitions for other purposes under the 

PHS Act. In response to comments, this 

final rule amends the definitions of 

‘‘individual market’’ and ‘‘small group 

market’’ that apply for rate review 

purposes to include coverage sold to 

individuals and small groups through 

associations even if the State does not 

include such coverage in its definitions 

of individual and small group market. 

This final rule also updates standards 

for health insurance issuers regarding 

disclosure and review of unreasonable 

premium increases under section 2794 

of the Public Health Service Act. 

DATES: Effective date. This rule is 

effective on November 1, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Sally McCarty, (301) 492–4489 (or by 

e-mail: ratereview@hhs.gov). 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Patient Protection and Affordable 

Care Act (Pub. L. 111–148) was enacted 

on March 23, 2010; the Health Care and 

Education Reconciliation Act (Pub. L. 

111–152) was enacted on March 30, 

2010. In this preamble, we refer to the 

two statutes collectively as the 

Affordable Care Act. The Affordable 

Care Act reorganizes, amends, and adds 

to the provisions of part A of title XXVII 

of the Public Health Service Act (PHS 

Act) relating to group health plans and 

health insurance issuers in the group 

and individual markets. 

Section 1003 of the Affordable Care 

Act adds a new section 2794 of the PHS 

Act, which directs the Secretary of the 

Department of Health and Human 

Services (the Secretary), in conjunction 

with the States, to establish a process for 

the annual review of ‘‘unreasonable 

increases in premiums for health 

insurance coverage.’’ The statute 

provides that health insurance issuers 

must submit to the Secretary and the 

applicable State justifications for 

unreasonable premium increases prior 

to the implementation of the increases. 

Section 2794 of the PHS Act does not 

apply to grandfathered health insurance 

coverage, nor does it apply to selffunded plans. 

On December 23, 2010, we published 

a Notice of Proposed Rulemaking to 

implement section 2794. Among other 

things, because of unique characteristics 

of State rate review and for purposes of 

administrative efficiency, we proposed 

to adopt definitions of the individual 

and small group markets that would 

defer to definitions set forth in State rate 

filing laws. We did not discuss in the 

proposed rule, or anticipate, how 

association policies would be treated 

under the proposal. Regardless, we 

received a number of comments 

objecting to the definitions as they 

would apply to association plans. On 

May 23, 2011, we published a final rule 

with comment period (76 FR 29964), in 

which we specifically solicited further 

comments on amending the definitions 

of ‘‘individual market’’ and ‘‘small 

group market’’ in § 154.102 to include 

coverage sold to individuals and small 

groups through associations in all cases. 

We received 30 comments in the 

comment period. Commenters included 

the National Association of Insurance 

Commissioners (NAIC); a State 

insurance regulator; many consumer 

and public interest organizations; 

associations sponsoring insurance plans 

for their individual and employer 

members; health care providers; health 

insurance issuers and related trade 

associations (collectively, ‘‘industry’’); 

and others. After consideration of the 

comments, we are amending the May 

23, 2011 final rule to provide that 

individual and small employer policies 

sold through associations will be 

included in the rate review process, 

even if a State otherwise excludes such 

coverage from its definitions of 

individual and small group market 

coverage. 

II. Provisions of the May 23, 2011 Final 

Rule With Comment and Responses to 

Comments 

In the May 23, 2011 final rule, we 

solicited comments regarding whether 

to amend the definitions of ‘‘individual 

market’’ and ‘‘small group market’’ in 

§ 154.102 to include coverage sold to 

individuals and small groups through 

associations in the rate review process, 

even if the State excludes such coverage 

from its definitions of individual and 

small group market coverage. 

Additionally, we solicited comments to 

address the following questions: 

1. Do States currently review rate 

increases for association and out-ofState trust coverage sold to individuals 

and small groups, regardless of whether 

the policies are sitused in or outside of 

their States? 

2. How many rate filings do States 

receive for association and out-of-State 

trust coverage? 

3. How prevalent are association and 

out-of-State trust coverage 

arrangements? What percentage of 

individual market and small group 

market business is sold through 

associations and out-of-State trusts? 

4. In which States is association and 

out-of-State trust coverage commonly 

purchased by individuals and small 

groups? Where are out-of-State trusts 

typically situated? 

5. Why do some individuals and 

small employers purchase coverage 

through associations and out-of-State 

trusts rather than through the traditional 

markets? Are there particular groups of 

individuals or types of small employers 

that typically purchase coverage 

through associations and out-of-State 

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