Widespread adoption of e-prescribing could save U.S. $156 million over five years

Jul 23 2008

HHS Secretary Mike Leavitt on Monday discussed the details of an electronic prescribing incentive program scheduled to begin on Jan. 1, 2009, that will increase Medicare payments to physicians who adopt the technology, the AP/Chicago Tribune reports.

The e-prescribing initiative was included in a new Medicare law that delays a 10.6% reduction to Medicare physician payments. Congress last week overrode a presidential veto of the legislation. Leavitt said widespread adoption of e-prescribing could save taxpayers as much as $156 million over five years, as well as reduce the 1.5 million injuries caused by drug-related errors annually (Freking, AP/Chicago Tribune, 7/21).

Under the law, physicians who adopt e-prescribing technology in 2009 and 2010 will receive a 2% bonus in their Medicare payments; those who use the technology in 2011 and 2012 will receive a 1% bonus; and those who use it in 2013 will receive a 0.5% bonus (Kornblum, USA Today, 7/22). Medicare payments for physicians who do not use the technology will be reduced by 1% in 2012, 1.5% in 2013 and 2% in 2014. Some health care providers will be exempt from the requirements (AP/Chicago Tribune, 7/21).

Acting CMS Administrator Kerry Weems said the initial expense for each physician to adopt the technology is about $3,000, with additional monthly costs of between $80 and $400 to operate and maintain the electronic systems.

Conference

Weems also discussed preliminary plans for a conference that will be held this fall to address what physicians need to do to participate in the e-prescribing program. The conference will address issues such as the technological options available to physicians to qualify for the Medicare payment bonuses, as well as how those payments would fit together with bonuses from the Physician Quality Reporting Initiative. Weems said physicians who adopt e-prescribing technology and participate in the quality reporting program would receive Medicare payments that are 4% higher in 2009 -- a 2% bonus for e-prescribing and a 2% bonus for reporting quality measures.

Weems indicated that further details about how the programs could overlap would be addressed at the conference. He said the conference will be a "bully pulpit" to spur nationwide adoption of the technology.

Comments

In a statement issued on Monday in response to the Medicare e-prescribing requirement, Scott Serota, CEO of the BlueCross and BlueShield Association, said that "this new e-prescribing requirement will likely have repercussions that extend far beyond Medicare." Serota said, "As a purchaser of health care services for more than 44 million Americans, Medicare's e-prescribing requirement is likely to encourage use of e-prescribing and other health information technology among others, including: Fortune 500 employers, small businesses, labor unions and other public programs" (Reichard, CQ HealthBeat, 7/21).

James King, president of the American Academy of Family Physicians, said, "It is fairly costly for a small practice to begin the change-over to e-prescribing, so the incentives in this particular bill will help" (AP/Chicago Tribune, 7/21). However, he said that some barriers still must be lowered to encourage widespread adoption of the technology, adding that not all pharmacies have adopted e-prescribing, some drugs cannot be prescribed electronically and some medications cannot be prescribed across state lines (CQ HealthBeat, 7/22).