Incentives Offered to Doctors for Using Electronic Prescriptions For Medicare Patients

Author: Drucilla Dyess

As of January 1, 2009 the federal government will give doctors an incentive when they send prescriptions electronically to a pharmacy instead of giving handwritten ones to patients. Only 10 percent of physicians currently transmit prescriptions to pharmacies electronically. The main culprit in the system's lack of use is the expense of buying and setting up the equipment and software necessary, which runs about $3,000 per doctor. In addition, it costs between $80 and $400 a month to maintain and operate a system.

To motivate physicians to incur the expense and move forward with technology, Congress has agreed to pay doctors just a little more for the next five years if they choose to implement and utilize the electronic system. These physicians will get an extra 2 percent on top of their reimbursement rates for treatment of Medicare patients in the years 2009 and 2010. The amount will decrease to 1 percent in 2011 and 2012 with only a 0.5 percent boost in 2013.

On the other side of the coin, Congress set financial penalties for physicians who choose not to use electronic prescribing that will drop their Medicare reimbursements incrementally over the five-year period. There will be a 1 percent decrease in 2012, a 1.5 percent loss in 2013 and a 2 percent penalty in 2014. Hardship cases will be considered for exception to these penalties.
The use of electronic prescribing is projected to save taxpayers up to $156 million over the next five years as well as save lives, according to Health and Human Services Secretary Michael Leavitt.

The software can make certain that all necessary information is included and guarantee that the data is legible. It will also allow doctors to monitor patients more efficiently and safely. They can quickly check for possible allergic reactions, medications that may conflict with other medications a patient is taking as well as verify that patients are taking medications as directed.

The bill was just recently approved by Congress as part of a bill that nullified a 10.6 percent cut in reimbursement rates for physicians who treat Medicare patients. President Bush vetoed that bill due to other provisions within it that decreased payments to health insurers, yet Congress overrode Bush's veto.

In a conference call, Leavitt said that by making provisions for electronic prescriptions, an estimated 1.5 million injuries annually that are caused by drug-related errors could be avoided. He also noted that the system should cut down on the pharmacies more than 150 million telephone calls made annually to get clarification of written prescriptions. "That's a lot of people needlessly hurt and a lot of time spent trying to sort out bad handwriting," Leavitt said.

There are still some other obstacles that hinder the use of the electronic prescribing system such as state laws that prohibit electronically prescribing across state lines and the inability to prescribe controlled substances under Drug Enforcement Administration rules but overall the system is expected to have more pros than cons. Medicare officials plan to hold a conference in the fall to assist doctors with some of the technical issues involved in setting up electronic prescribing