Federal incentives up e-prescribing

January 1, 2009

CMS is sending a message that all prescribers must begin using electronic tools to increase safety and reduce costs. Commerical payers are onboard.

Outgoing HHS Secretary Mike Leavitt calls e-prescribing an "economic imperative" and says that Medicare is expected to save up to $156 million over five years by preventing some 530,000 adverse drug events. Will the new law serve as a bellwether for e-prescribing and help the technology turn the corner, not just for Medicare but also in the commercial environment?

"CMS is sending a message that it wants all stakeholders to pay attention to e-prescribing immediately," says Kathy Roe, partner, health law practice for Neal, Gerber and Eisenberg in Chicago. "It's the right thing to do and can serve as the first step for addressing spiraling healthcare costs. CMS is intent upon offering incentives despite the state of the economy."

Richard Popiel, MD, chief medical officer for Horizon Blue Cross Blue Shield of New Jersey, sees the law as an empowerment tool for the adoption of e-prescribing. With more than 1,500 physicians in the Horizon network, there are 1,000 active e-prescribers. Dr. Popiel says that the insurer initiated an e-prescribing program in 2001. It offers incentives based on the percentage of total scripts that are written electronically to prevent an excess of overall prescriptions.

States are exploring some collaborative initiatives, often supported by managed care insurers.

Florida established ePrescribe Florida, which supports the adoption of e-prescribing by physicians with incentives from health plans and the state to cover financial outlays.

"The CMS ruling should get the attention of physicians," says Ashley Allen, director of health information technology for Blue Cross and Blue Shield of Florida. "For those sitting on the fence, the incentives should help them jump the hurdle."

Allen says the Florida model could likely be applied in other states.

Southeast Michigan created the ePrescribe Initiative, which enables physicians to write prescriptions on a desktop computer or hand-held device, transmit to dispensing pharmacies and have real-time access to patient's eligibility, formulary, drug-fill history, allergies and drug interactions.

The first-year implementation costs approximately $2,000 per physician with ongoing costs of $500 to $600 per year. The Southeast Michigan Initiative offers a total incentive of $1,000-the first $500 after the 10th e-prescription and another $500 after 20 prescriptions per month for six months. From January 2005 to April 2008, 4.5 million prescriptions were sent electronically.