On July 1, 2011, the Centers for Medicare & Medicaid Services (CMS) issued a proposed Medicare physician payment rule that includes a 29.5 percent reduction in calendar year (CY) 2012 rates as prescribed by existing law.  Current Federal law contains a Sustainable Growth Rate (SGR) formula that would require the significant rate cut.  Similar cuts have been averted by individual congressional actions for many years.  CMS Administrator Dr. Donald M. Berwick, in an agency press release, stated , “This payment cut would have serious consequences and we cannot and will not allow it to happen.”  Dr. Berwick noted that the President’s budget submission for FY 2012 would prevent the proposed cutback by extending current payment rates through December 31, 2013; and he cited the administration’s determination “to pass and implement a permanent and sustainable fix.” 

The Medicare physician payment rule also contains proposals for changes to the three incentive programs that are associated with physician payments—electronic prescribing (eRx), electronic health records (EHRs), and the Physician Quality Reporting System.  The rule would modify the electronic prescribing measure to allow eligible professionals to use either a qualified electronic prescribing system (based on original criteria in measure) or certified EHR technology.  Also, the eRx provisions would provide significant hardship exemption categories for professionals who practice in a rural area with limited high-speed internet access; or with limited available pharmacies for electronic prescribing; or with local, state or federal law limitations.