Physicians Face a Costly Challenge With Medicare's New 'E-Prescribing' Rule


Without the proper technology, physician practices may find it difficult to participate in Medicare's new “e-prescribing” standards under the Part D drug benefit, physician groups claim.

“Most primary care physicians will be unable to afford to implement this technology on their own, particularly with the projected cuts in Medicare physician payments of 4.4% in 2006 and a cumulative 26% reduction from 2006 to 2011,” Neil Kirschner, Ph.D., senior associate for regulatory and insurer affairs with the American College of Physicians, said in an interview.

The Centers for Medicare and Medicaid Services in a final rule established the standards for electronic prescribing, or e-prescribing, of drugs covered by Medicare's prescription drug benefit that started Jan. 1, 2006, according to the Federal Register. CMS also plans to pilot test initial e-prescribing standards, which may be included in a final rule to be issued by April 2008.

“These standards will allow Medicare, physicians, hospitals, group practices, other health providers, and prescription drug plan sponsors and Medicare Advantage organizations to take advantage of e-prescribing technology to improve medication prescribing for Medicare beneficiaries that participate in the new prescription drug program,” said Mike Leavitt secretary of the Department of Health and Human Services.

For the most part, medical organizations expressed support for the agency's e-prescribing initiative.

But few practices are currently employing this technology, Dr. Kirshner said. “Surveys vary, but the percentage of practices using it ranges somewhere from 5% to 18%.” The number is even lower for the typical small practice, he added.

Dr. Kirschner said the recent release of safe harbor antikickback and Stark exception rules allowing hospitals, group practices, and Medicare Part D drug plan sponsors to provide necessary e-prescribing technology to physicians may help facilitate its use.

E-prescribing is optional for physicians and pharmacies under the new standards, but as of Jan. 1, 2006, Medicare required drug plans participating in the new prescription benefit to support electronic prescribing.

Jeff Trewhitt, a spokesperson for the Pharmaceutical Research and Manufacturers of America, said PhRMA supported the development of a standardized e-prescribing system. In addition to reducing errors and the administrative costs associated with health care, the system would also promote more effective care of drug therapies for chronic conditions. He agreed, however, that such a system must be designed and implemented correctly. “Keep in mind that the systems needed to convert to an e-Rx system don't even exist yet.”

CMS's new standards for e-prescribing include the following technology:

▸ NCPDP SCRIPT, Version 5.0, for transactions between prescribers and dispensers for new prescriptions, refill requests and responses, prescription change requests and responses, prescription cancellation requests and responses, and related messaging and administrative transactions.

▸ ASC X12N 270/271, Version 4010 and addenda, for eligibility and benefits queries and responses between prescribers and Part D sponsors.

▸ NCPDP Telecommunication Standard, Version 5.1, and supporting NCPDP Batch Standard, Version 1.1, for eligibility queries between dispensers and Part D sponsors.

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