As Medicare Prescription-Drug Plan Nears, E-Prescribing Push Intensifies

In the two years leading up to Medicare Part D—as the new prescription coverage is called—there has been much discussion among officials in government and health-care circles about ways to promote the use of E-prescriptions, which can help eliminate inefficiencies and medical mistakes by replacing paper-based, handwritten drug prescriptions with digitized drug orders and processes.

While the U.S. Department of Health and Human Services advocates the use of E-prescriptions for Medicare as well as non-Medicare patients, so far the federal government hasn't yet launched formal financial incentive programs that reward doctors who use E-prescription applications for Medicare patients.

However, such federal programs are in the works and could come early in 2006. "In the near future, we will make an announcement for funding programs and evaluation of standards for E-prescriptions," says an HHS spokesman.

Health-industry insiders say the federal government is likely to bundle Medicare Part D related E-prescription incentives in broader pay-for-performance programs that also reward other uses of health IT, such as electronic health records, as well as in programs being created to improve and monitor the quality of care and outcomes of chronically sick patients.

As more doctors and pharmacies use E-prescriptions, those applications will evolve from mainly the processing of new prescriptions and refills, to "extensions in workflow" that can also help provide doctors with more comprehensive data about patients' medical history, the effectiveness of treatments, and patient's compliance in taking their medicines, says Kevin Hutchinson, CEO of SureScripts, which operates the largest network that electronically links doctors and pharmacies in the United States and was created about five years ago by the National Association of Drug Store Chains and the National Community Pharmacist Associations.

"E-prescribing is the launchpad" for collecting and sharing data that is key for other health IT initiatives under way in the government and health sectors, says Hutchinson, who in September was named by HHS Secretary Michael Leavitt as a commissioner on the new 16-member American Health Information Community, created to develop the standards and interoperability necessary to accelerate adoption of health-care IT.

For instance, "a spike in certain medication orders could indicate an outbreak of an infectious disease or bioterrorist attack," so the data that gets generated by E-prescribing also aids in the nation's biosurveillance efforts, he says.

The data can also help health payers—like private insurance plans as well as government programs like Medicare—monitor whether patients are complying with their appropriate prescription drug protocols. For instance, if a patient with chronic heart problems hasn't refilled his medication in six months, that might indicate he's not taking his medicine or might be splitting pills, which could in turn lead to additional health problems.

Some large employers and health plans are already using information gleaned from pharmacy claims data to help monitor whether patients are adhering to protocols that can improve health and reduce costs.

"We can do that now with claims data, but yes, we can move into models of better disease management," as the doctors' use of E-prescribing increases, says IBM medical director Dr. Paul Grundy.

IBM is among a growing number of employers and private and public health plans, which also include Florida's state Medicaid program and insurer Highmark Inc. in Pennsylvania, that already have a jump on Medicare in launching incentive programs to get more doctors using E-prescription applications.

Starting Jan. 1, IBM will reward doctors in the mid-Hudson area of New York state—which is home to IBM's largest concentration of employees—by paying physicians up to 50 cents per member, per month, if the doctor uses E-prescription applications for at least 25% of the prescriptions he writes. IBM provides health coverage to about 60,000 people in mid-Hudson, including 30,000 employees and their family members, says Grundy.

This incentive program will also cover doctors who treat IBM retirees, who could also be participants of the new Medicare Part D program, says Grundy.

Grundy says there are about 1,000 physicians who treat IBM employees in the mid-Hudson region, and, by Jan. 1, it's estimated that 300 of them will be doing E-prescribing.