Bill requires e-prescribing for Medicare, pay cuts for non-compliance

January 25, 2008

Identical Senate and House bills introduced last month would require you to electronically transmit prescriptions for Medicare patients to the pharmacy starting in 2011 or else take a pay cut.

Identical Senate and House bills introduced last month would require you to electronically transmit prescriptions for Medicare patients to the pharmacy starting in 2011 or else take a pay cut.

It'd be inaccurate to call the bills an unfunded mandate, however. The legislation authorizes a one-time grant to physicians to offset start-up costs of e-prescribing (an estimated $2,000 to $3,000, according to a spokesperson for the House bill sponsor). The federal grant would be $2,000 for doctors implementing the technology in 2008 or 2009, $1,500 in 2010 or 2011, and $1,000 in 2012 and afterward. In addition, Medicare would tack on a 1-percent bonus for any evaluation and management service performed in conjunction with an e-prescription.

However, doctors who don't e-prescribe would suffer a 10-percent reduction in reimbursement for any related E&M service. Medicare would waive the penalty for practices that can demonstrate hardship.

Lest there be any misunderstanding, faxing a prescription to a pharmacy won't satisfy the e-prescribing mandate envisioned in the House and Senate bills. In true e-prescribing, a doctor's computer transmits the Rx directly to the pharmacy's computer through a technology called electronic data interchange, or EDI.

The bi-partisan legislation, called the Medicare Electronic Medication and Safety Protection Act, promises to set off a lobbyist war. Although the AMA reportedly has not yet taken a position on the House and Senate bills, the organization has called for voluntary adoption of e-prescribing coupled with generous federal funding. In contrast, a group called the Pharmaceutical Care Management Association, which represents pharmacy benefit managers, has run print and television ads urging Congress to mandate e-prescribing for the sake of saving lives.

Sen. John Kerry (D-MA) is the sponsor of the Senate bill (S. 2408) while Rep. Allyson Schwartz (D-PA) is the sponsor of the House bill (H.R. 4296). The Senate bill has nine co-sponsors; the House version, 11.

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