Database of Knowledge E-prescribing Incentives and Mandates for Your Practice

E-prescribing is IT software and peripheral equipment used to monitor, evaluate, and issue patient drug prescriptions by health care providers. It most often is utilized on PCs but may also be used on PDAs. It can be on a site-based or Web-based service or part of an electronic health record system. Or it may be a freestanding application.

What are the Benefits?

E-prescribing offers several opportunities and advantages over manual systems, some of which have been already proven by field testing, including the following:

Improving quality of care. This is accomplished through information provided almost immediately from the patient database and from a shared database of information relative to specific illness, diagnosis, and medications. On one or two screens, the doctor or non-physician provider can be updated to current medications prescribed to the patient, current diagnoses being treated, patient allergies, alternative formularies and nonformularies, side effects, complications, and conflicts with specific prescriptions. All this information aids in making more informative and timely clinical decisions. Obviously, when interfaced with an EMR or EHR system, more information can be accessed.

Reduction in medical errors. It has been estimated that, nationwide, millions of preventable adverse drug events (ADEs) occur due to complications with conflicting medications, drug and diet complications, duplicate medications, inappropriate doses, and inappropriately prescribed medications. It is estimated that between 5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} and 18{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of all ambulatory patients experience significant ADEs every year. Impact studies have indicated that properly implemented E-prescription can reduce these by a factor of three within two years.

Efficiencies in the office. Studies suggest that E-prescription can save almost 3 minutes of personnel time per prescription, reduce error rate by 88{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} and reduce callbacks from pharmacies for corrected or missing information by 50{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}.

Reduction in drug costs. By displaying formulary and non-formulary drugs, the system offers alternative or generic brands of the same medication. It can also indicate name brands for which the patient’s insurance carrier won’t reimburse. This provides immediate cost savings to both the patient and the insurance company. As a side benefit, offering lower-cost alternatives may reduce the incidence of patients not filling prescriptions because they can’t afford them and instead going without treatment.

Even so, it is estimated that only about 20{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of doctors currently use E-prescribing systems. Up until recently, patients and insurers were the primary beneficiaries of this system. Doctors were responsible for bearing the costs of buying and installing the systems and the loss of time spent in the training and learning-curve phase, and were also concerned over compliance and liability issues. Aside from concern for patients and third-party payers, the benefits to doctors have been less tangible and more strategic.

New Developments

The Centers for Medicare and Medicaid Services (CMS) has recently issued both financial incentives and mandates that make E-prescribing a priority item that should be on the strategic-planning agenda of medical group practices, especially those with a significant Medicare patient base.

For 2009, practices that participate in the CMS electronic prescribing initiative will receive an incentive bonus of 2{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of their Medicare payments generated for services rendered during 2009. Practices will have until Feb. 8, 2010 to submit 2009 claims. The 2{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} bonus also applies to 2010. For 2011 and 2012, it drops to 1{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, and in 2013 it falls to 0.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}. Note that the bonus applies to all Medicare Part B payments, not just for E-prescribing claims or office visits.

If this isn’t incentive enough to get in the program, consider the following. In 2012, practices that don’t E-prescribe, or don’t meet the requirements, will be penalized 1{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of all Medicare payments. The penalty increases to 1.5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} in 2013 and 2{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} in 2014 and all later years.

The sooner medical practices implement E-prescribing, the less costly it will be. The bonus payments will, in effect, help fund the system. Some private payers are also offering incentives, so it may be worth checking with your payers.

To be eligible for bonus payments, a practice must receive 10{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of its Medicare Part B payments from office-based services, successfully report that it E-prescribed or attempted to E-prescribe 50{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the applicable cases, and use a system that is compatible with the Physician Quality Reporting Initiative (PQRI).

There are currently 33 office-based services codes from which to choose in determining the 10{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} requirement. In reporting E-prescribing, there are three G codes that must be used (G8443, G8445, G8446) together with the office-based procedure codes.

An E-prescribing system may be an EMR-based system. If it is, the EMR must be certified by the Certification Commission for Healthcare Information Technology (CCHIT) and must also be able to use Medicare Part D E-prescribing standards for transactions. Most, but not all, EMRs are CCHIT-certified.

There are also standalone E-prescribing systems. Practices can save money, at least initially, by using free E-prescribing software developed by the National E-Prescribing Patient Safety Initiative (NEPSI), dubbed eRx NOW. To sign up for this, visit www.nationalerx.com.

Practices that are currently using computer-generated faxes for E-prescribing may continue to do so until Jan. 1, 2012. It is recommended, however, that practices begin phasing this system out rather than wait.

Begin the Process Now

Doctor practices are going to have to implement E-prescribing eventually. Doing this now, rather than later, will enable you to take advantage of financial incentives that will be phased out within the next few years.

Beginning the process now will also get you over the learning curve sooner and will start paying for itself through improved operating efficiencies and risk reduction.

James B. Calnan, CPA, is partner-in-charge of the Health Care Services Division of Meyers Brothers Kalicka, P.C., in Holyoke, certified public accountants and business consultants; (413) 536-8510.