Press Releases


For Immediate Release: Thursday, October 30, 2008
Contact: CMS Media Relations


The Centers for Medicare & Medicaid Services (CMS) today announced a new initiative for physicians to trade in their prescription pads and improve efficiency and safety when ordering drugs for patients with Medicare.  The initiative is included in the Medicare Physician Fee Schedule (MPFS) final rule for calendar year 2009. 


Widespread adoption of electronic prescribing can eliminate medication errors that result from the misreading of handwritten prescriptions. Medicare beneficiaries may also have reduced out-of-pocket costs as e-prescribing facilitates communication between prescribers and pharmacies on lower-cost generic alternatives.


Physicians and other eligible professionals who adopt and use qualified electronic prescribing (e-prescribing) systems to transmit prescriptions to pharmacies may earn an incentive payment of 2.0 percent of their total Medicare allowed charges during 2009.  This incentive is in addition to a 2.0 percent incentive payment for 2009 for physicians who successfully report measures under the Physician Quality Reporting Initiative (PQRI), and both incentive payments are in addition to the 1.1 percent fee schedule update required by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).  Thus, a physician who successfully reports under both the e-prescribing and PQRI initiatives could receive up to a 5.1 percent pay boost for 2009.


“E-prescribing can greatly reduce the number of medication errors that jeopardize the health and safety of Medicare patients and waste precious health care dollars treating conditions that never should have happened,” said CMS acting administrator Kerry Weems.  “The Institute of Medicine says more than 1.5 million Americans are injured every year by drug errors.  E-prescribing lets providers know—up front—their patients’ medication history and the risk of dangerous interactions.”


 To participate in the e-prescribing incentive program, physicians will need to have a qualified e-prescribing system with certain required capabilities.  Qualified systems must be able to: 


  • Communicate with the patient’s pharmacy;
  • Help the physician identify appropriate drugs and provide information on lower cost alternatives for the patient;
  • Provide information on formulary and tiered formulary medications; and
  • Generate alerts about possible adverse events, such as improper dosing, drug-to-drug interactions, or allergy concerns.

      To earn the incentive payment, physicians must successfully report one of three codes for the e-prescribing measure when submitting claims for specified types of medical visits, indicating either that:


  • They did not prescribe any medications during the visit;
  • They used e-prescribing for any medications prescribed during the visit; or
  • They did not use e-prescribing for a prescription because the law prohibits electronic prescribing for the specific type of drug, such as a controlled substance.

As part of its e-prescribing incentive program, Medicare will be providing information and other educational resources to physicians and their offices about available e-prescribing systems.


The e-prescribing incentive program is one of several provisions intended to promote access to higher quality and more efficient health care that is included in a final regulation updating the MPFS, which establishes payment rates for more than 7,000 types of services based on the resources required to furnish them.  The rates and policies adopted in the final rule will apply to services furnished on or after January 1, 2009.


Approximately 980,000 physicians and nonphysician practitioners (NPPs) bill Medicare under the MPFS for the services they furnish to beneficiaries.  Of these, nearly 95 percent accept Medicare’s fee schedule rate as payment in full for their services.  Medicare pays 80 percent of the fee schedule rate, while the beneficiary is responsible for the remaining 20 percent.


As required by MIPPA, which became law on July 15, 2008, payment rates for physician fee schedule services will be increased by 1.1 percent in 2009, rather than being reduced by 5.4 percent as would have happened if CMS had applied the physician fee schedule conversion factor projected in the proposed rule.  Total Medicare spending under the 2009 Physician Fee Schedule is projected at $61.9 billion, up 4 percent from the $59.5 billion projected for 2008. 


In the final rule, CMS also adopts improvements to the Physician Quality Reporting Initiative (PQRI), which allows eligible professionals to report quality measures relating to their clinical practice.  Physicians who successfully report on their cases during 2009 will be able to earn an incentive payment, in addition to the e-prescribing incentive payment of 2.0 percent of their total Medicare allowed charges.


Launched in 2007, the PQRI was expanded in July 2008 to provide alternative, streamlined methods for reporting.  Among the changes for 2009 is removal of the quality measure 125 that was used to report on the use of e-prescribing, since that is now the focus of the e-prescribing incentive program.  The final rule also adds 52 new quality measures (bringing the total number of measures to 153 from which eligible professionals can select from for 2009 PQRI), addressing such areas as osteoarthritis, rheumatoid arthritis, back pain, coronary artery bypass graft (CABG), chronic kidney disease (CKD), melanoma, oncology, coronary artery disease, hepatitis, and HIV/AIDS.  Eighteen of the new measures are reported exclusively through registries.


Finally, in the interest of patient care and safety, and to encourage prescribers and dispensers to adopt e-prescribing, CMS is reversing the modifications to the computer generated facsimile exemption in the CY 2008 MPFS final rule with comment period and reinstating the original computer-generated facsimile exemption that was adopted in the November 7, 2005 e-prescribing final rule, effective January 1, 2009. 


            The revised policies and payment rates will become effective January 1, 2009.


The final rule with comment will appear in the November 19 Federal Register. Comments on designated provisions are due by 5:00 p.m. Eastern time on December 29, and a final rule responding to the comments will be published at a later date.


             For more details on the general provisions of the rule, as well as CMS’s implementation of the PQRI and e-Prescribing initiative, and MIPPA changes, see the Medicare Fact Sheets posted at:




            The text of the final MPFS rule can be downloaded from the CMS Web site at:








Page Last Modified: 12/02/2011 12:00 PM
Help with File Formats and Plug-Ins

Submit Feedback