Federal Incentive Program Pushes Adoption of Electronic Prescribing

Most employers are familiar with the concept of electronic prescriptions and the benefits it can bring to the healthcare industry. Chances are, however, few of the physicians in your plan’s network currently utilize e-prescribing technology. In fact, despite the evidence that e-prescribing can save time, money and reduce medication errors, it is estimated that only about 10 percent of family physicians are transmitting prescriptions electronically. According to the Centers for Medicare and Medicaid Services (CMS), the main barriers to increased physician usage include the cost of buying and installing the equipment and a lack of reimbursement for costs and resources. But now, the federal government is taking steps to overcome physician resistance to e-prescribing and increase its utilization nationwide.

With the recent passage of the Medicare Improvements for Patients and Providers Act of 2008, the federal government will increase Medicare payments to physicians who adopt e-prescribing technology beginning January 1, 2009. According to the new guidelines, doctors who use e-prescribing for Medicare patients will receive a 2 percent increase in 2009 and 2010, a 1 percent increase in 2011 and 2012, and a 0.5 percent increase in 2013. The increase in payments will help offset the cost of purchasing e-prescribing equipment (which can run up to $3,000) and the additional monthly fees (between $80 and $400) for use and maintenance.

On the other hand, physicians who decline to use the e-prescribing system will suffer payment reductions of 1 percent in 2012, 1.5 percent in 2013, and 2 percent in 2014. There may be room for some exceptions, however, since e-prescribing adoption is an expense that many small practices cannot afford.

Overall, the plan is to promote widespread adoption of e-prescribing, which in turn could save taxpayers as much as $156 million over five years. In addition, it could reduce the 1.5 million injuries caused annually by drug-related errors (misread prescriptions, etc.), as well as the estimated 150 million pharmacy telephone calls each year to physicians’ offices to confirm prescriptions. E-prescribing can also help physicians to better track their patients for drug interaction and ensure each patient is taking the medication as directed. For many doctors, it could result in significant cost savings by helping them avoid unnecessary or inappropriate prescriptions and increase the usage of generic alternatives.

The new federal incentives should help physicians get up to speed with the rest of the industry as far as e-prescribing adoption. Pharmacists are already more prepared for e-prescribing as it is estimated that over 70 percent of community pharmacies have electronic prescription capabilities, according to new prescription transmission network SureScripts-RxHub. If the doctors catch up at the rate many are predicting as a result of the new guidelines, then those hard-to-read, hand-written prescriptions could soon become a rarity – and high costs due to prescription error a thing of the past.

For more information, please visit the following links:

E-Prescribing Encouraged by New Federal Law

Widespread Adoption of E-Prescribing Could Save U.S. $156M over Five Years

Health Officials Back Move Away from Handwritten Doctors’ Prescriptions

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September 26, 2008

Hill, Chesson & Woody strives to keep our clients' group decision makers abreast of trends influencing the employee benefits market. Look for Eyes on Benefits to bring you news and information affecting you and your employees.

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