Surescripts cuts rates

February 15, 2010

Operational efficiences and economies of scale resulting from its 2008 merger with RxHub have enabled Surescripts to cut its pharmacy routing and transaction fees, which should lead to decreases in the prices independent pharmacies are paying.

Key Points

Electronic prescribing gave pharmacists an unexpected bonus in January when Surescripts cut its pharmacy routing and transaction fees. Independents can expect to see reductions of 10 percent to 15 percent, possibly more, depending on whose third-party software is being used. Chains using in-house systems will also see their transaction costs fall.

All the major chain pharmacies and pharmacy benefit managers are already on the Surescripts network, Ratliff told Drug Topics, but only about 60 percent of independents have signed on. That left total pharmacy coverage at about 85 percent nationwide at the end of 2009. Ratliff said lower pricing should help bring smaller independents into the network.

The number of e-prescribers has been doubling annually in recent years, but early adopters have been larger- and medium-sized practices and health systems with greater internal resources and information technology (IT) staff support. Most prescriptions are written by smaller practices with three or fewer physicians, he said, and these smaller practices have been slower to adopt technology.

"These smaller practices have automated their billing processes but not their clinical processes," Ratliff said. "They are a lot like the small pharmacy, in that they don't have extensive resources and they don't have an IT staff. But they are writing 75 percent to 80 percent of all prescriptions. Helping these smaller practices get and use the technology is the key to increasing electronic prescribing."

Surescripts is counting on financial incentives built into the American Recovery and Reinvestment Act (ARRA) and a carrot-and-stick approach from the Centers for Medicare and Medicaid Services (CMS).

ARRA offers physicians approximately $40,000 as an incentive to make meaningful use of electronic medical records. While final definitions of "meaningful use" are still being created, core EMR definitions include e-prescribing to use patient benefit and formulary information, the patient's prescription history, and electronic transmission of scripts to pharmacies, Ratliff noted.

Proposed language issued by CMS and the Office of the National Coordinator for Health Improvement Technology in late 2009 calls for physicians to employ computerized prescription-writing technology for 80 percent of all scripts by 2011.

Prescribers who use a qualified e-prescribing system have been eligible for a 2 percent bonus on all allowed Medicare charges since January 1, 2009. That 2 percent incentive drops to 1 percent in 2011 and to 0.5 percent in 2012; it disappears in 2014. Prescribers who do not e-prescribe will be hit with a 1 percent penalty on Medicare changes starting in 2012. The penalty jumps to 2 percent in 2014 and is not scheduled to disappear.

Ratliff said e-prescribing has shown several positive side effects. A study at Walgreens showed fill rates jumped 11 percent with e-prescribing. And anecdotal reports show a dramatic decline in the number of calls between pharmacy and prescriber for Rx changes and refill authorizations.