E-prescribing Can Make a Difference for Medicare Part D

April 1, 2007
Wendy K. Bodine, Assistant Editor

Pharmacy Times, Volume 0,0

In an effort to reduce medicationerrors, the law implementing MedicarePart D included a provisionthat all prescription health plansenrolled in the program be able to provideelectronic prescribing (e-prescribing)by 2009. To help establish standardsfor e-prescribing and to test theirfeasibility in practice, the Departmentof Health and Human Services (HHS)initiated pilot programs across thecountry during 2006. As a result of onesuch pilot program—at Brigham andWomen's Hospital in Boston, Mass—the facility experienced a 55%decrease in serious medication errors.

In its report Preventing MedicationErrors, the National Institute of Medicine(IOM) estimated that 1.5 millionpreventable adverse drug events(ADEs) occur each year in the UnitedStates. A study reported in the Journalof the American Medical Associationfound that about 530,000 preventableADEs occur each year among outpatientMedicare beneficiaries. The costof treating preventable ADEs in Medicareenrollees alone is ~$887 millionevery year.

The IOM recommended that all prescriptionsbe written electronically by2010 to help reduce these medicationerrors. E-prescribing has been shownto improve patient safety and toreduce health care costs by decreasingprescription errors caused by hard-to-readhandwriting and other communicationerrors, as well as automatingthe process of checking for drug interactionsand allergies. As of now, e-prescribingis still optional for prescribersand pharmacies.

"All of the Medicare prescriptiondrug plans must comply with...newlyestablished foundation standards for e-prescribing,which will improve drugsafety and reduce costs," said Mark B.McClellan, MD, PhD, former administratorof the Centers for Medicare &Medicaid Services (CMS). "We are makinge-prescribing easier to implement,to accelerate the use of e-prescribing inMedicare and throughout the nation'shealth care system," he added.

Benefit to Patients and Pharmacies

Significant evidence has shown thebenefit to patients and pharmaciesalike after the inception of e-prescribingin facilities such as Brigham andWomen's Hospital. Furthermore, whenthat hospital enhanced its system withimproved decision-support features,the decline in serious errors therereached 86%. One of the enhancementsto the hospital's system was a menu ofa physician's most-prescribed medicationswith standard doses and instructionsfor each one, allowing for 1-clickordering for most prescriptions.

Another example of the difference e-prescribingcan make involved theSoutheast Michigan E-Prescribing Initiative.When the Henry Ford MedicalGroup signed on, its 600 participatingphysicians wrote >1 million e-prescriptionswithin 18 months. Of those prescriptions,>98,000 were changed orcancelled due to drug-drug interactionalerts, and >63,000 were changed orcancelled because of formulary alerts.The medical group is expected to save>$1 million per year by using e-prescribing.

A key benefit of e-prescribing is adecrease in the time spent receivingand processing prescription orders atthe pharmacy. Pharmacies using e-prescribingcould expect to see an estimated27% reduction in labor costs fornew prescriptions and a 10% drop inthese costs for prescription renewals,compared with using paper or faxedorders.

CMS Standards

CMS published the first set of e-prescribingstandards for use in theMedicare Part D program in the FederalRegister in November 2005. Thesestandards were already in use byenough stakeholders that CMS officialswere confident about requiring universaladoption of these standards by thetime Part D was launched in January2006. These "foundation standards" cover the following items:

•Transactions between prescribersand dispensers for new prescriptions,refill requests andresponses, prescription changerequests and responses, prescriptioncancellation requests andresponses, and related messagingand administrative transactions

•Eligibility and benefits queriesand responses between prescribersand Part D sponsors

•Eligibility queries between dispensersand Part D sponsors

The pilot programs are testing additionalstandards, including the followingcriteria:

•The ability to transmit informationabout insurance benefits, eligibility,and formulary

•Data on drug interactions, costcomparisons, and therapeuticalternatives to any drug prescribed

•The ability to transmit and processprior-authorization requests,display patient medication histories,and record when the prescriptionsare dispensed

Pharmacists must be able to communicatewith prescribersvia the e-prescribing system,and the system mustallow for the cancellation ofor changes to any prescriptionalready transmitted.

The criteria were compiledbased on recommendationssolicited from theNational Committee on Vitaland Health Statistics. Thecommittee consulted a varietyof experts, includingphysicians, pharmacists, hospitalofficials, e-prescribing experts,and federal agency officers, in order toassess standards for adequate industryexperience. The standards are necessaryto ensure interoperability andrecognition by key stakeholders.

The Medicare Modernization Actalso laid out criteria for e-prescribingstandards that include the followingspecifics:

•The standards do not imposeundue administrative burdens ondoctors, other health care providers,and pharmacies or pharmacists

•They will be compatible with federalgeneral health informationtechnology standards, such asthose in the Health InsurancePortability and Accountability Act

•They allow for the electronicexchange of drug-labeling anddrug-listing information retainedby the FDA and the NationalLibrary of Medicine

Pilot Programs

The pilot programs also weredesigned to assess the impact of e-prescribingon the work flow among prescribers,pharmacies, and insurancecompanies. HHS dispensed ~$6 millionin grants to help run the programs,which will help determine which uniformstandards for e-prescribing will beadopted by Medicare by 2008. In additionto Brigham and Women's Hospital,contracts were awarded to the RANDCorp (Santa Monica, Calif); SureScripts(Alexandria, Va); and Achieve HealthcareInformation Technology(Eden Prairie, Minn).

Results of the tests weredue to be presented toCongress by April 1, 2007.Any additional standardsrequired are to be publicizedno later than April2008.

To allow health plans andproviders to furnish hardwareor software to physiciansto help facilitate e-prescribing,CMS had toclarify the Stark Law, which "prohibits aphysician from making referrals forcertain designated health servicespayable by Medicare to an entity withwhich he or she has a financial relationship,"unless an exception applies.In that case, the exception involves thephysician self-referral prohibition forcertain arrangements in which a physicianreceives necessary nonmonetarycompensation that is used solely toreceive and transmit e-prescribinginformation.

According to CMS, between 5% and18% of physicians in America are estimatedto be using e-prescribing in 1form or another. This percentage isprojected to grow by 10% every yearover the next 5 years. About 75% of the57,208 pharmacies across the UnitedStates already have e-prescribingcapabilities.

State Barriers to E-prescribing

Several states have laws in placethat hinder the initiation of e-prescribing,however. CMS has identified severalcategories of state laws that are preempted,either in whole or in part,because they are contrary to the federalstandards or because they restrictthe ability to carry out the e-prescriptiondrug program requirements forMedicare Part D. Some of these categoriesof state laws are as follows:

•Laws that expressly prohibite-prescribing

•Laws that prohibit the transmissionof e-prescriptions via intermediaries,such as networks orpharmacy benefit managers, orthat prohibit access to these prescriptionsby plans, their agents, orother duly authorized third parties

•Laws that require specific languageto be used, such as "dispenseas written," to indicatewhether generic drugs may ormay not be substituted for brandeddrugs, when this language isnot consistent with the standard

•Laws that require handwrittensignatures or other handwritingon all prescriptions

After announcing the regulations,HHS Secretary Michael O. Leavitt statedthat "[the] proposed e-prescriptionrules would set standards to helpMedicare, physicians, and pharmaciestake advantage of new technology thatcan improve the health care of seniorsand persons with disabilities."