This Week – June 15, 2012

This Week in Washington DC:

  1. Medicare E-Rx Program: Reminder to Write Ten E-Prescriptions Before June 30, 2012
  2. HHS Inspector General Releases Advisory Opinion on ASCs and Anesthesia Service Providers

Medicare eRx Program Deadline Looms
In 2009, the Centers for Medicare & Medicaid Services (CMS) implemented the Medicare Electronic Prescribing (eRx) Incentive Program. Physicians and group practices failing to meet certain electronic prescription requirements during calendar years (CYs) 2012 through 2014 will be subject to a payment cut based on total Medicare Part B Physician Fee Schedule (PFS) charges.

Eligible professionals and those group practices participating in the “eRx Group Practice Reporting Option” (eRx GPRO) will incur a 1.5% payment adjustment in CY 2013 and 2% adjustment in 2014 for failing to meet eRx reporting requirements.

Avoiding the 2013 eRx Payment Adjustment: 10 Prescriptions before June 30, 2012
Individual eligible professionals can avoid the 2013 eRx payment penalty by writing 10 prescriptions between January 1 – June 30, 2012.

ACG members may also receive a 1% bonus payment for writing 25 e-prescriptions between January – December 2012 when also performing certain medical services. 

CMS exempts eligible professionals from the 2013 eRx payment adjustment if the agency determines that compliance with the requirements for becoming a successful electronic prescriber would result in a significant hardship. The significant hardship categories are as follows:

  • The eligible professional is unable to electronically prescribe due to local, state, or federal law or regulation.
  • The eligible professional has or will prescribe fewer than 100 prescriptions during a 6-month reporting period (January 1 – June 30, 2012).
  • The eligible professional practices in a rural area without sufficient high-speed internet access.
  • The eligible professional practices in an area without sufficient available pharmacies for electronic prescribing.

ACG has urged membership to avoid this payment penalty since December 2011. To learn more on how ACG members can avoid the penalty, and receive a bonus payment in 2013, please click on the following guidance released in December 2011:

HHS OIG Provides Guidance on Physician-Owned ASC Arrangements with Anesthesia
Service Providers

On June 1, 2012, the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) released an advisory opinion on certain arrangements between ambulatory surgical centers (ASCs) and anesthesia service providers. 

It is important to note that OIG opinions are advisory in nature and are applicable only to the specific facts provided and to those requesting the opinion. The OIG routinely provides guidance and advisory opinions on fact-specific scenarios upon request. This is not the beginning of a federal investigation or audit. However, ACG members should be aware of this guidance when contracting with anesthesia professionals.  

The OIG stated that two scenarios may trigger the federal statute prohibiting physician self-referrals. This is commonly known as the federal “anti-kickback” statute: 

1. When the ASC charges an independent provider of anesthesia services an additional per patient “management services” fee for the space and materials used during the procedure. Pursuant to the facts provided to the OIG, this fee would exclude Medicare and Medicaid patients.

  • The OIG concluded that this scenario may trigger the anti-kickback statute because the “carve out” of Medicare or Medicaid patients raises the concern of questionable financial arrangements. Also, the facility may be double-reimbursed as it would be receiving a “management services” fee for the facility space but also an ASC facility fee for the same services.
  • There is, however, an “ASC management services” safe harbor under federal guidelines if fees are established in advance and are not based on volume.

2. When the ASC sets up a wholly-owned subsidiary to negotiate a contract with an anesthesia provider to serve as an independent contractor. This subsidiary also directly bills CMS/insurers for these anesthesia services.

  • OIG also concluded that this scenario may trigger the anti-kickback statute because it may not meet certain Medicare ASC anti-kickback “safe harbors.” For example, a physician may refer his/her patients to his/her ASC to perform surgical services. However, under federal regulations, anesthesia services are not considered “surgical” services. Also, ASC “safe harbors” only apply to Medicare-certified ASCs and not to subsidiaries of these ASCs.
  • The American Society of Anesthesiologists has long-advocated that this type of “company model” arrangement violates the anti-kickback statute. However, the OIG opinion noted that there are certain federal “ASC employee” safe harbors.

Please click here to read the HHS OIG advisory opinion.

ACG is currently reviewing the opinion with experts and outside counsel and will provide membership with further guidance on ASC “safe harbors” and options to consider when contracting with anesthesia services providers.

Please stay tuned for further updates. Please also share and discuss your thoughts with fellow ACG members on the ACG GI Circle. To login and share your comments, go to and sign in as a member. Once you have done so, click here and then click the orange "Visit ACG GI Circle" button to be taken to the GI Circle site. If you have not yet activated your ACG GI Circle account, please email us at

Contact Brad Conway, VP Public Policy, with any questions or for more information.

Brad Conway