Playing by the rules for electronic prescribing doesn't seem to have helped doctors avoid being penalized by Medicare.

In fact, doctors of two sorts say they're being unfairly penalized under the agency's new Electronic Prescribing Incentive Program, which this year started paying slightly less to practices that have not yet adopted the new technology.

Some doctors say they are being penalized even though they have a pending application for a "hardship exemption."

Medicare "received so many, they could not review all in time for Jan. 1, 2012," when the penalty went into effect, said Neil Kirschner, senior associate of regulatory and insurer affairs at the American College of Physicians. "There were a large number of practices that applied for the exclusion, felt they were eligible but were still hit with the penalty."

Others, like Dr. John Giampietro, an internist in New Rochelle, N.Y., say they've done everything right, met all of the electronic-prescribing goals set by the Centers for Medicare and Medicaid Services but are being penalized regardless.

"We met the criteria for the e-prescribing, which was so many claims submitted by the end of June," Giampietro said. "There didn't seem to be a problem until I learned that all of my claims have been paid at the 1 percent penalty. They seem to be penalizing everyone who has e-prescribed."

The Medicare Improvements for Patients and Providers Act of 2008 established a five-year program, beginning in 2009, to promote e-prescribing. Under the law, physicians who are eligible for the program but fail to participate in e-prescription are subject to penalties that start this year and escalate for the next two.

The penalty for 2012 -- based on a practice's inability to meet goals in 2011 -- is a 1 percent payment reduction for all Medicare claims, based on the 2012 fee schedule. The penalty increases to 1.5 percent in 2013 and 2 percent in 2014.

This year, the penalty would cost an average practice an estimated $2,000 to $3,000, Kirschner said.

Problems with the penalties first cropped up when CMS found itself overwhelmed by applications for hardship exemptions. Kirschner said the agency handled the glut by enacting the penalty against all practices that had submitted hardship applications but had not been reviewed by Jan. 1 and by promising refunds to those that eventually were approved for an exemption.

"Once the exclusion request was reviewed and it was found eligible, the practice would be made whole," Kirschner said. But in the meantime, he said, "practices were being dinged the 1 percent when they found they didn't meet the goal."

He added that many doctors who've been penalized but have been holding out hope for a successful exemption may be disappointed in coming days.

"My understanding is that as of last week Medicare has either finished or is close to finishing the review of all these hardship exclusions," he said. "A lot of them weren't approved because they didn't meet the criteria."

However, ACP has also heard from a second set of physicians who feel they've met the program's criteria but are still having their payments cut.

"They had explanation of benefits (EOBs). They had evidence. They submitted the appropriate number of claims to show they shouldn't be penalized," Kirschner said. "And they still got dinged."

CMS seems to have acknowledged that problem.

"At first it appeared they would have no appeal, but what we're hearing is that [CMS] will be reviewing complaints," Kirschner said. "A physician can call the CMS QualityNet Help Desk, and they will review whether there was an error."

Doctors who want to challenge an e-prescribing penalty should call the Help Desk at 866-288-8912 between 7 a.m. and 7 p.m. Central Time or email gnetsupport@sdps.org.

ACP is also establishing an e-prescribing complaint center to work with members who don't believe that CMS is addressing their concerns. Kirschner said that members who have contacted the CMS Help Desk without success should fill out and file a form that can be downloaded from the ACP website.