E-prescribing and the MMA

January 9, 2006

The Medicare Modernization Act (MMA) is best known to pharmacists for establishing the Part D prescription drug benefit. However, the bill also promotes Medicare modernization by providing standards and incentives for the adoption of e-prescribing. All prescription drug plans participating in Medicare must have the capability to handle e-prescribing.

The move to e-prescribing has been picking up speed and may greatly accelerate with promotion through MMA 2003. Major vendors are emerging, and the necessary network infrastructures are being put in place. Major insurers and managed care organizations have sponsored development of e-prescribing systems regionally and created incentives for physician to participate. Large-scale e-prescribing pilot projects are under way and gaining publicity and attention. Recognition and supporting evidence of the potential benefits are emerging. Organizations and institutions that are implementing electronic medical records now expect order entry and e-prescribing as standard features.

CMS published the first set of e-prescribing standards in the Federal Register in September 2005. These are foundation standards already in use by enough stakeholders that government is comfortable with requiring their universal adoption by January 2006.

To meet the CMS requirements, e-prescribing systems must have the capability to transmit data about benefits, eligibility, and formulary, including information on drug interactions, cost comparisons, and therapeutic alternatives. Systems must be designed to transmit and process prior-authorization requests. They will display patient medication histories and record when Rxs are dispensed. Pharmacists must be able to communicate with prescribers through the e-prescribing system, and the system must allow for cancellation or changes to Rxs already transmitted. Throughout 2006, CMS will fund pilot tests of the additional standards needed to enhance e-prescribing systems.

E-prescribing systems will be using a new clinical drug terminology, RxNorm, that was developed by the National Library of Medicine. RxNorm links many of the drug vocabularies commonly used in proprietary pharmacy management and drug interaction software, including those of First DataBank, Micromedex, Medi-Span, and Multum. By providing links between these vocabularies, RxNorm can mediate messages between systems not using the same software and vocabulary.

Results of the pilot tests are to be presented to Congress in 2007, and any additional e-prescribing standards are to be promulgated no later than April 2008.

In addition to standards and incentives, MMA seeks to provide a way for external entities such as payers or hospitals to offer support for physicians who adopt e-prescribing. Entities will be allowed to provide hardware, software training, and other services to prescribers without violating anti-kickback laws and regulations.

Finally, MMA includes language that allows for federal preemption of state rules that interfere with adoption and/or implementation of e-prescribing standards. The need for preemptions is under evaluation by CMS. Regulations will follow if it is found that there are state laws or regulations that pose an impediment to e-prescribing under the Medicare standard.

To be prepared for e-prescribing, pharmacies should be sure they sign on with a reputable software vendor that's knowledgeable and compliant with the emerging standards.

THE AUTHOR is associate professor, Department of Pharmacy Health Care Administration, University of Florida College of Pharmacy.