E-Prescribing Math for Non-Par Medicare Physicians

Certain physicians have been having to do some confusing extra math to figure out how much they can charge Medicare patients in 2012. They are physicians who: 

  1. Are Medicare non-participating (non-PAR);  AND
  2. Don’t accept Medicare assignment on claims (i.e., instead of filing claims for which Medicare pays them directly, they files claims for reimbursement that Medicare sends directly to the patient);  AND
  3. Did not submit at least 10 e-prescribing Medicare claims by June 30, 2011, thereby becoming subject to a 1-percent penalty throughout 2012 on the amount Medicare will pay them.

For services rendered by non-PAR, non-assigned physicians, Medicare pays at 95 percent of the regular Medicare Physician Fee Schedule. The e-prescribing penalty is applied to this allowed amount. Medicare allows non-PAR, non-assigned physicians to charge patients 115 percent of the allowed amount — or, in this case, of the e-prescribing-penalty-adjusted allowed amount.

Here’s how it works. In this example, the original fee schedule amount is $100.

5% non-PAR status deduction: $100 x 5% = $5
1% e-prescribing penalty: $95 x 1% = $0.95
Adjustment total: $5.95
Allowed amount: $100-$5.95 = $94.05
Limiting charge allowed (amount physician may charge patient): $94.05 x 115% = $108.16  

Amount Medicare will pay the beneficiary: $94.05 x 80% = $75.24
Patient’s out-of-pocket amount: 108.16-$75.24 = $32.92 

 Math to GetEasier in 2013 

The calculation will get easier starting Jan. 7, 2013, when the penalty for not submitting enough Medicare e-prescribing claims (10 claims by June 30, 2012) goes up to 1.5 percent. Medicare has instructed its payers to post the limiting charge on their websites with the 1.5-percent reduction already calculated out. Non-PAR, non-assigned physicians who are subject to the penalty will only have to calculate the 5-percent non-PAR status deduction and apply the posted limiting charge to determine how much they can charge patients.

For details, see the Centers for Medicare & Medicaid Services’ MLN Matters No. MM7877 (PDF). Also, turn to the E-Prescribing page on the TMA website for information about e-prescribing basics as well as the incentive programs.

Posted Aug. 14, 2012 

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