Medication Management and e-Prescribing

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2007-05-19T06:23:00.000-07:00

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Prescription Drug Pricing: MAC can make you Wacky

2007-05-13T12:50:00.000-07:00

To understand the pricing of prescription drugs, one must wade through a number of acronyms and concepts that have evolved over time and, in this writer's opinion, obfuscate rather than clarify pricing. Understanding the history of prescription drug pricing seems important if one is to develop a transparent pricing approach. But here is an irony, although CMS has the authority to ensure that where applicable manufacturer's sales information on average manufacturer price and best price are correct (see below), the Social Security Medicare Part D legislation requires that this information be kept confidential and hence it is not publicly available.

Terms

Average Wholesale Price (AWP).

"The AWP has often been equated with a “sticker price” or “list price,” as those terms are used in the automobile industry. It has become an important prescription drug pricing benchmark for payers throughout the health care industry. Payments are typically based on AWP minus some percentage. Despite its name, however, the AWP is not an accurate reflection of actual market prices for drugs. As noted, it is a price derived from self-reported manufacturer data for both branded and generic drugs. There are no requirements or conventions that the AWP reflect the price of any actual sale of drugs by a manufacturer, or that it be updated at established intervals. It is not defined in law or regulation, and it fails to account for the deep discounts available to various payers, including certain federal agencies, providers, and large purchasers, such as HMOs. Consequently, the AWP has been the subject of great criticism and scrutiny." (Source: Wikipedia)

Wholesale Acquisition Cost (WAC).

The price a wholesaler pays to a manufacturer for a drug. It is a published price that does not include rebates or discounts. Sometimes called the "catalog price." (Source: Gencarelli)

Average Manufacturer’s Price (AMP).

The average price paid to manufacturers by wholesalers (less discounts) for a particular dosage form and strength of a prescription drug distributed solely to the retail pharmacy class of trade. The AMP is not a published price. It is calculated by the manufacturer and submitted to CMS for purposes of calculating the Medicaid rebate. (Source: Gencarelli)

Maximum Allowable Cost (MAC).

The highest price a health plan or other intermediary will pay for medications. This cost figure becomes most relevant when there are more than two generic options available for the drug. Maintaining a list of these costs across all drugs is, as one document describes it, "tedious and expensive."

Federal Supply Schedule (FSS).

Obtained from market transaction data reported by manufacturers. In general, FSS may not be higher than the lowest price charge by the manufacturer for non-federal purchasers. That is, the federal government should never pay more than any other plan or intermediary. Some federal bodies (e.g., the VA) set price according to FSS.

Federal Upper Limit (FUL).

This is a ceiling paid when there are more than three generic options available. It is set at 150% of the least costly therapeutic equivalent that can be purchased by pharmacies in quantities of 100 tables. (Source Gencarelli)

Estimated Acquisition Cost (EAC).

This is the other upper limit complementing the FUL. EAC is a state's estimate of price paid by providers for a drug. It is often used for single-source (e.g., "brand") drugs. Most states use AWP to calculate EAC.

Average Sales Price (ASP).

The average of all final sales prices charged for a prescription drug in the United States to all purchasers (including mail order pharmacies) excluding those sales that
are exempt from inclusion in the “best price” for Medicaid drug rebate
purposes. Defined by the OIG-mandated corporate integrity agreement with TAP pharmaceuticals.

Usual and Customary Charge.

The common charge to the public for a prescription drug.

References

AWP (Wikipedia)

Medicaid Prescription Reimbursement by State (CMS). A comprehensive Web resource.

Follow the Pill: Understanding the U.S. Commercial Pharmaceutical Supply Chain. Health Strategies Consultancy for the Kaiser Family Foundation (March, 2005)

Dawn M. Gencarelli (June_7, 2002). "Average Wholesale Price for Prescription Drugs: Is There a More Appropriate Pricing Mechanism?" (pdf). National Health Policy Forum. Includes definitions of all terms. Appendix 1 contains Medicaid dispensing and cost sharing as of 2002 for each state. It is instructive.

Office of the Inspector General (2002). Actual acquisition costs of generic prescription drug products.

Office of the Inspector General (2002). Additional analysis of the actual acquisition cost of prescription drug products.

Abramson, et. al. Generic Drug Cost Containment in Medicaid: Lessons from Five State MAC Programs. Health Care Financing Review. Spring 2004. 25 (3), 25-34.

HHS Office of the Inspector General (October, 2003). State Strategies to Contain Medicaid Drug Costs (OEI-05-02-00680).

HHS Center for Beneficiary Choices. Lower Cash Pricing (October 11, 2006). Describes the CMS approach to Wal-Mart $4 generics and similar programs.

HHS Center for Beneficiary Choices. Scope of work: State-to-State Plan Reconciliation (July 7, 2006). Describes the data fields (including "usual and customary charge") that will be submitted by states to Public Consulting Group (PCG) to study costs incurred by states for dual-eligible and low-income subsidy entitled beneficiaries during their transition to Medicare Part D. States will then work with CMS and its contrator to establish reimbursement parameters based on eacch state's liability for either primary or secondary payment under Part D claims.

How this works.

First, a state determines a dispensing fee. Examples abound.
Second, a state determines a reimursement for ingredient costs. This is often AWP less some percent (usually 5-15%) or WAC + some percent (around 5%) - whichever is lower.

Remember that the federal government pays some portion of the charge, depending on the state. (Follow this link to the Kaiser Family Foundation's table of federal matching rates.) The rate in Tennessee for 2007 is 63% and the rate in Florida is 58%.

States or other intermediaries then receive rebates from manufacturers equal to some percentage of the AMP. It is higher (15% a good number) for "sole source" drugs (e.g., "brand names) and a bit lower (around 10%) for multi-source drugs (e.g., generics). Sometimes the rebate is the difference between the AMP and the best price. Sometimes it is further increased if prices exceed the CPI or other inflation indicators. The Federal rebate amount is the same for all states and established by 42 U.S.C. 1296r-8(a).

CMS releases e-prescribing pilot reports

2007-04-17T08:32:00.000-07:00

CMS released the evaluation report from their five e-prescribing projects. The five pilot sites are among the leading experts in the field of e-prescribing: RAND, Ohio KePRO/UHMP, Brigham and Women's Hospital, SureScripts, and Achieve Healthcare. A summary of their results as well as additional analyses and recommendations is included in the evaluation report.

This writer had the opportunity to contribute to this effort with Chelle Woolley, Kevin Johnson, Adil Moiddudin, and many others.

Follow this link for the summaries:

Follow this link for the draft congressional report
Follow this link for the complete NRC / AHRQ evaluation report (pdf)
Follow this link for the complete NRC /AHRQ evaluation report (text)

Follow these links for the individual evaluations:

Follow this link for Achieve Healthcare Technology's report
Follow this link for the Brigham report
Follow this link for the Ohio report
Follow this link for the RAND report
Follow this link for the SureScripts report

e-Prescribing needs work: Are we surprised?

2007-04-03T15:33:00.000-07:00

In the most recent Health Affairs, Grossman and colleagues discuss the limitations of e-prescribing from the perspective of the physician office practice. Two thirds of those interviewed used eRX in the context of a more comprehensive EMR.

Follow this link to the Grossman Health Affairs article

Follow this link to the AHRQ HIT e-RX web site

Their semi-structured interviews raised the following concerns:

First the good news:

Practitioners uniformly believed this technology leads to better care. Although they seem to disregard the many early adopters and discarders when they say that their subjects "did not want to go back to paper."
They relate documentation benefits and believe more legible prescriptions decrease call-backs and believe the ease of accessing lab data in the many who use integrated EMR/e-Rx decreases chart pulls.
They believe that formularies (when available) made choices "somewhat easier." Those few who submitted electronically reported additional time savings.
Most could not point to staff cuts but believed the technology freed staff to do other things. They believe efficiency gains were offset by costs.

Now the less positive news.

Most were not able to availa themselves to update a medication history
Eligibility checks were erratic because the limited number of PBMs and a conservative matching algorithm.
Some noted that adjudicated claims data did not necessarily correspond to an active medication list.
Clinical decision support was limited because of integration.
Many had difficult getting formulary data. ("Over half of the practices did not have acess to the formulary data electronically....either because their systems lacked the feature or the practice had chosen not to enable it.
Those respondends seeking formulary information found it from 25-90%.
There was limited connectivity to pharmacies (retail and mail).
Many believed their states precluded electronic transmission (largely, this is so only for controlled substances).
Local pharmacies' lack of readiness was cited as a barrier to full electronic transmission.
"Most practices using electronic fax or EDI reported spending substantial time educating local pharmacies about e-prescribing. This included both informing pharmacies that electronic transmissions were legal and making sure that pharmacies routinely checked their fax machine or computer system for the transmissions. Respondents reported that it took a couple of months of daily communication about individual patients for pharmacies to begin to treat electronic transmissions as routine. Until that point, practices reported that pharmacies regularly called when patients arrived to pick up medications because they could not find the prescriptions."
Two industry experts "believed, however, that pharmacies typically must reach a critical mass of electronic prescriptions to successfully incorporate checking these new sources into their workflow."

Rhode Island Publishes List of True e-Prescribers

2007-03-10T06:11:00.000-08:00

One of the leading states in e-prescribing has elevated the discourse on this topic by publishing a list of physicians who do true e-prescribing. Based on Rhode Island Board of Pharmacy documents, e-prescribing is defined as:

The electronic entry of a prescription by a clinician (e.g., physician or nurse practitioner);
The secure electronic transmission of the prescription to a pharmacy;
The receipt of an electronic message (not a fax) by the pharmacy;
The electronic approval of prescription renewal requests from pharmacies.

Rhode Island's goals for achieving e-prescribing adoption are:

75% prescriptions (new and renewal) that are eligible to be e-prescribed are completed electronically.
67% of prescribers are using e-prescribing mechanism for new or renewal prescriptions in the last 90 days.
100% of pharmacies are capable of accepting electronic prescriptions

SureScripts Press Release

2007-03-10T06:04:00.000-08:00

During the annual HIMSS meeting, SureScripts, LLC announced its safe Rx awards. Their awards are based on the use of e-prescribing as a fraction of total scripts eligible for electronic routing. This is defined as true digital communication between prescriber and pharmacy - not faxing.

As the release points out, "There remains a sizable opportunity to increase the adoption and utilization of e-prescribing across the country – including in all the top 10 Safe-Rx states."

What this means is that the actual number of e-prescriptions is relatively small. One concern is that many prescribers use e-Rx software to write scripts but the transmission to pharmacies remains via fax. The unknown: what percentage of the claimed safety and financial benefits are realized when scripts are written using digital systems but faxed? Given the relative lack of integrated, interoperable systems, it is highly likely that many of the safety and financial benefits will not be realized until pharmacy, medical practice, and data integrator systems (including laboratory systems) are all tightly coupled and focused on comprehensive review and interaction checking.

Follow this link for the SureScripts Release

RxHub Accomplishments

2007-02-26T18:24:00.000-08:00

ON February 23, RxHub announced its accomplishments for the past year (2006) and the plans for the coming year. Quoting from the press release (this writer's comments are in blue text):

in 2006:

Access to more than 160 million patient prescription information records for consenting patients, via payers and PBMs, through the growing list of RxHub certified technology partners. Contracts with payers and PBMs were executed representing additional access to more than 50 million patients though RxHub.
An increase in transaction volumes of 50% from 29 million transactions in 2005 to more than 43 million transactions in 2006. These transactions were real-time requests for patient eligibility and benefits, formulary, and medication history information, made at the point-of-care in the ambulatory and acute care settings from clinicians across the United States. (blogger note: 43 million transactions - but there were over 3 billion scripts filled last year)
A ten-fold increase in true electronic prescriptions, which includes the transmission of patient-specific clinical decision support information at the point of prescribing, to retail and mail order pharmacy locations of the patient’s choice. (note: the % of true eRx still is estimated to be well under 5% of total transactions)
Involvement in three of the four nationwide health information network (NHIN) prototypes defined by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology.
Participation in four of the five year-long ePrescribing pilots that were funded by the Centers for Medicare and Medicaid Services (CMS) in collaboration with the Agency for Healthcare Quality and Research (AHRQ). RxHub provided the underlying infrastructure for the pilots to test a variety of e-prescribing standards, including RxHub’s medication history and formulary and benefits standards that were made available to the industry last year. The pilots also tested a new standard for electronic prior authorization (ePA) and a new use of electronic prescribing standards to meet the unique needs of the long-term care environment. All pilots have successfully completed their obligations and submitted final reports, which identify successes as well as opportunities for improving the ePrescribing process.

During 2007, RxHub will address these opportunities through focus groups, workgroups, product enhancements, and standards development.

Their proposed activities for this year include:

RxHub will actively continue the growth of PBM and payer participation and expand its current Master Patient Index (MPI) coverage to more than 200 million covered lives which will increase the already impressive value it brings to the prescribing industry as well as the patients it represents nationwide. (note: Since the American population is just around 300 million, does this really mean that the participating plans cover 2/3 of the people in the United States? It would be interesting to know how many duplicates are in these data)
RxHub will conduct a partner satisfaction survey to poll participants on current services and additional offerings necessary to enable further physician adoption of ePrescribing.
RxHub will host the Second Annual RxHub Symposium focused on payer sponsored ePrescribing initiatives and pay-for-performance programs in the United States. Results of the findings and outcomes will be published following the Symposium in May.
RxHub has retained the services and expertise of Maria Friedman as part of the RxHub team focused on Public strategies related to electronic prescribing. Dr. Friedman is a former senior advisor to CMS.
RxHub is in the final stages of receiving full accreditation by the Electronic Healthcare Network Accreditation Commission (EHNAC). This milestone reinforces the dedication to quality RxHub strives for in its daily operations and provides partners with continued commitment to excellence.

How Two Rights Can Make a Wrong

2007-02-26T15:36:00.000-08:00

In a February 25, 2007 NY Times article entitled "How Two Rights Can Make a Wrong," Howard Markle, MD does a fantastic job if describing the perils of prescription drugs. Added to this well-referenced article is a graphic that describes the complexity in a new way.

He has a more current, 2005 number for prescription drugs - 3.6 billion (2004 was 3.38 billion). His source is the Kaiser Family Foundation. (source - June 2006 Prescription Fact Sheet)

Mentioned as well is the October 18, 2006 survey of emergency departments published in JAMA by Budnitz et. al. (PubMed Source; JAMA abstract). They performed active surveillance from January 1, 2004, through December 31, 2005, through the National Electronic Injury Surveillance System-Cooperative Adverse Drug Event Surveillance project. They found that over the 2-year study period, 21,298 adverse drug event cases were reported, producing weighted annual estimates of 701,547 individuals.

The Sloan Epidemiology Center is cited as a source for prescription drug use. They claim:

75% of Americans over 65 years of age took roughly four prescription drug on a daily basis
the average 75-year old swallowed 8 different prescription medications each day
82 percent of the united states population reported using at least one prescription drug, over-the-counter meds, or dietary supplement in the previous week.

A fascinating report by the Columbia University Center for Addiction and Substance Abuse entitled "Under the Counter: the Diversion and Abuse of Controlled Substances in the US" states that:

34% of pharmacists do not have time to check a patient's full medication history at the time of dispensing
28% do not regularly validate the prescriber DEA number and 10% rarely or never do so.
Only about half (54%) of physicians in the survey regularly call or obtain records from patient's previous (or other treating) physicians before prescribing long-term controlled drugs.

Prescriptions: Facts and Assumptions

2006-12-24T05:54:00.000-08:00

How many prescriptions?

Good data can be obtained from the NACDS Chain Pharmacy Industry Profile. Their numbers differ slightly from figures published by the NCPA (community pharmacists) in part because of different definitions. NACDS defines a chain pharmacy as one that operates four or more for-profit pharmacies open to the general public. These include traditional drug stores, supermarket pharmacies, and pharmacies in mass-merchandise stores. Some are urban, and some are rural. Some might consider themselves "community pharmacies."

Table 30 in the 2006 profile outlines the number of prescriptions filled in 2005.

3,383

Source	scripts(mil)	$ (mil)
Chains	1,562	$94,453
Independents	743	$41,819
Total(chain + independents)	2,305	$136,272
Mass Merchants	365	$22,480
Supermarket	469	$27,576
Mailorder	244	$ 43,929
Total	$230,257

Other data show the top drugs

Top 10 U.S. Retail Prescription Products Ranked by Total Prescription Count

Product	Rank	Generic or Brand	TRx Count* (Mil)	TRx Count % Change Prior Year
Hydrocodone w/APAP	1	Generic	92.7	8.17%
Lipitor	2	Brand	69.8	6.46%
Lisinopril	3	Generic	46.2	17.50%
Atenolol	4	Generic	44.2	2.88%
Synthroid	5	Brand	44.1	-6.73%
Amoxicillin	6	Generic	41.4	10.48%
Hydrochlorothiazide	7	Generic	41.3	14.83%
Zithromax	8	Brand	37.2	-5.99%
Furosemide	9	Generic	36.5	3.24%
Norvasc	10	Brand	34.7	4.18%

Based on Wolters Kluwer Health proprietary methodologies. Reflects prescription data for retail and mail order pharmacy channels.

Calculating dispensing costs and the value of e-prescribing

2007-02-19T16:40:00.000-08:00

What does it cost to fill a prescription?

Depends on what you measure.

One valuable source are the Medicaid cost data prepared by firms like Myers and Stauffer, LLC.

A 2002 study prepared for Texas, for example, showed a weighted median cost per prescribing of $5.95.

The dispensing fee is one of two major components of drug fees (the other is the ingredient cost). The dispensing, or professional, fee is paid to pharmacies to cover their overhead and labor costs. Federal regulations at 42 CFR 447.331-333 require states to establish a reasonable dispensing fee for their Medicaid pharmacy programs and to document their pharmacy reimbursement methodology in their state plan. (the requirement is for reasonable, but evidently not for perspicuous). These studies are a mother lode of information. They demonstrate some obvious trends (for example, the relationship between prescription volume and unit cost).

Pharmacy costs are also dictated by the amount of compounding and intravenous drugs delivered. These specialty areas skew data and hence lead to calculations of median rather than mean values.

Pharmacy and Pharmacist Facts and Assumptions

2006-12-24T05:53:00.000-08:00

Number of retail independent pharmacies – 18,958 (1)
Number of chain retail pharmacies - 35,877 (1)
Number of pharmacists - 229,740 (1)
Median salary of pharmacists - $88,000 (1)
Number of pharmacy technician working in retail pharmacies - 182,000 (ref)
Pharmacists make approximately 150 million clarifying phone calls to physicians annually.
More than half of calls to physicians concern pharmacy issues. (Source: Institute for Safe Medication Practices (ISMP) White Paper: A Call to Action: Eliminate Handwritten Prescriptions within 3 Years, ISMP 2000)
30% of prescriptions require pharmacy call backs (Hutchinson, NCVHS May 25, 2004)
900 million prescription-related telephone calls are placed annually (Hutchinson, ibid)
One-fifth (20%) of pharmacy personnel time is spent solely on activities directly related to third-party issues (at a cost of approximately $1.18 per script).
Of this portion of pharmacy personnel time, 3.7% is spent on script clarification and data entry (which is reduced by receiving an electronic script).
The remaining 16.3% is spent handling issues related to prescription changes or rework due to eligibility, formulary and similar benefits coverage-related activities (which is reduced by receiving a prescription that was written with an awareness of patient benefits coverage). (Source: “Pharmacy Activity Cost and Productivity Study.” Arthur Anderson, LLP, funded by NACDS. November 1999)
The number of vacancies for pharmacists, which nationwide jumped from 2,700 in 1998 to nearly 7,000 in 2001. (DHHS)

1. http://www.hayesdir.com/services.html

Facts from NCPA

Independent pharmacy: $92 billion marketplace
Independent pharmacy prescription sales: $85 billionIndependents dispense 1.5 billion prescriptions annually (42% of the retail prescriptions)
Average independent pharmacy sales: $3.75 million up 5% over 2004
Average prescription sales: $3.45 million up 5% over 2004
92% of annual sales are Rx medicines
Average number of prescriptions per indepdentent pharmacy: 61,071 annually, 196 per day
Over 33% of independent owners have ownership in two or more pharmacies
Overall, the average independent owns 1.9 pharmacies
Average independent employs 12.8 full-time equivalent (FTE) employees
Average independent employs 2.8 FTE pharmacists (including owner)
Average independent employs 4.3 FTE technicians
56% of drugs dispensed by independent pharmacies are generics

Year end 2005 sales for all traditional drug stores (chain and independents) reached an estimated $174.2 billion. This is a 4.1% increase over the 2004 NACDS estimate.

	(2005)	(2004)
All traditional drug stores (39,266 units)	$174.2 B	+ 4.1% vs $167.2 B
Traditional chain drug (21,349 units)	$ 131.7 B	+4.2% vs $126.4 B

Bureau of Labor statistics

The upper 10^th percentileis used for the Head Pharmacist . Arthur Anderson 1999 numbers were also inflated over 8 years with an inflator of 8.7% for pharmacists and 5% for staff.

Bureau of Labor Statistics Salaries

Role	2004 (BLS)	2007 Salary	Cost ('07)
Head pharmacist	$110,000	$141,280	$175.187
Pharmacist	$84,000	$107,887	$133,780
Pharmacy technician	$22,741	$26,324	$32,642
Pharmacy intern	$219,600	$34,266	$42,489
benefits (% of salary)	24%
Pharmacist salary inflator	8.7%
Other staff inflator	5.0 %
Hours per year	2,080

Prescriber Facts and Assumptions

2006-12-24T05:53:00.000-08:00

The National Association of Chain Drug Stores produces an annual industry report with a comprehensive review of prescription drugs, prescribing, and pharmacies.

Prescribers, scripts, and dollars

Follow this link for a sorted list of specialty practices, number of prescriptions, and dollars (2004).

The Medical Group Management Association has valuable data on the administrative costs of prescribing. In a 2004 study entitled "Analyzing cost of administrative complexity in group practice" MGMA used their study was the first using Group Practice Research Network (GPRN)of almost 300 group practices to identify administrative costs using a survey. They found that in a medical group practice with 10 physicians, more than $19,444 per year was spent on phone calls with pharmacies resolving drug formulary issues.

SureScripts takes the MGMA data and identifies some total e-prescribing costs in their GetConnectedRx Resource site.

Per FTE Physician	Hours/Year	Cost/FTE
Support staff time on phone with pharmacies – Rx Refills	133.0	$1,929.00
Physician time on phone with pharmacies – Rx Refills	80.8	$8,083.00

Some calculations for the savings that might be incurred at 50% and 100% e-Rx. In actuality, it is reasonable to calculate only the staff savings, but it is a matter of the extent to which savings can be realized by more volume or staff reductions.

	50% e-Rx	100% e-Rx
Savings per physician FTE	$ 6,365	$ 11,913
FTE staff savings per MD	$ 2,275	$ 4,254
Total Savings	$ 8,640	$ 16,171

Follow this link for a spreadsheet with Mark Frisse's calculations from the MGMA data

Follow this link to get to the Excel file at the MGMA site

Handwriting and the IOM Recommendation - eRX by 2010

2007-02-16T18:50:00.000-08:00

The Institute for Safe Medication Practices provides one of the best snapshots of the status of medication error prevention and what can be done about it.

One of the more interesting sections of this series is on handwriting and legibility. Quoting:
Undecipherable or unclear prescriptions result in more than 150 million calls from pharmacists to physicians, asking for clarification, a time-consuming process that could cost the healthcare system billions of dollars a year in wasted time. At the very least, that process can delay the time until patients receive their medications. At worst, a misread order can lead to injury or even death.
An incorrect understanding of the intended drug, dosage, or route or frequency of administration can quite obviously produce a medication error-not to mention an adverse drug event. Given some doctors' hurried scribbles, it may be hard for dispensers to tell whether a zero is preceded by a decimal point or not; if the decimal is misread, the dose ultimately given may be off by an order of magnitude, and the result could be a 10-fold overdose. Poor handwriting can blur critical abbreviations for weights, volumes, or units; mg may be confused with mg, again leading to an overdose. An order marked as "qd" (once a day) might be read as "qid" (4 times a day).

In light of these findings, the Institute of Medicine recommended that all prescriptions be submitted electronically by 2010.

Follow this link for the home page of the report. (Follow the links at the bottom)

Follow this link for a report brief

Medication Safety Claims

2007-02-16T18:38:00.000-08:00

Adverse drug events

Annually, 530,000 preventable adverse drug events (ADEs) among elderly adults in the ambulatory care setting . (Source: Gurwitz et. al. Incidence and preventability of adverse drug events among older persons in the ambulatory setting. JAMA. 2003 Mar 5;289(9):1107-16.
Extimated cost of preventable ADES per year for this category - $900 million (source Field et. al. The costs associated with adverse drug events among older adults in the ambulatory setting. Med Care. 2005 Dec;43(12):1171-6
Prevention of half of these ADEs will therefore decrease costs by $450 million.

AHRQ: Outpatient Prescription Drug Expenses in the U.S. Community Population, 2003

2007-02-16T18:31:00.000-08:00

Primary Source

http://www.meps.ahrq.gov/mepsweb/data_files/publications/cb16/cb16.pdf

General Issues

In 2003, outpatient prescription drug expenses in the U.S. civilian non-institutionalized population totaled $177.7 billion and accounted for approximately 20% of total health expenses.
The average prescription drug expense per person in the community population (including people with no expenses) was $611.
The average per person with an expense (about 64% of the population) was $950.
Medicare beneficiaries comprised only 15% of the community population but accounted for 42% of prescription medicine expenses.
The average drug expense was about four times larger for Medicare beneficiaries ($1,774) than for the non-Medicare population ($413).
The top 10% of the population (that is, the 10% of the population with the highest drug spending) accounted for 69% of prescribed drug expenses for the non-Medicare population and 41% of prescribed drug expenses among Medicare beneficiaries.
Nearly half (45%) of the total spending for outpatient prescription drugs was paid by patients and their families. This percentage was more than twice as large as the out-of-pocket share for total health expenses (20%).
Medicare beneficiaries paid for a much larger portion of their drug expenses out of pocket (51%) than the non-Medicare population (40%). D
Drug expenses were concentrated among people in fair or poor health in both the Medicare and non-Medicare population.
In 2003, 64% of the 290.6 million people in the U.S. civilian non-institutionalized population had an outpatient prescription drug expense.
The community population purchased a total of 2.8 billion prescriptions, an average of almost 10 prescriptions per person.
Outpatient prescription drug expenses totaled $177.7 billion, accounting for approximately 20% of total health care spending.
In 2003, the 42.4 million Medicare beneficiaries comprised about 15% of the community population yet accounted for 42% of total prescription drug purchases and 42% of total prescription medicine expenses.
The average drug expense per Medicare beneficiary ($1,774) was more than four times as large as the average expense for the non-Medicare population ($413).
The top 10% of the population (that is, the 10% of the population with the highest drug spending) accounted for 41% of expenses for the Medicare population and 69% of expenses for the non-Medicare population. Similarly, the top 30% of the population accounted for 73% of Medicare drug expenses and 95% of non-Medicare expenses.
In 2003, the distribution of expenses for the top 10% and top 30% throughout the population was similar for prescription medicines and all health care.
For both types of expenses, the 10% of the population with the highest spending accounted for nearly two-thirds of the total, and the top 30% accounted for around 90% of the total.

Who pays for prescription medicines?

In 2003, 45% of the $177.7 billion spent for outpatient prescription drugs was paid by patients and their families (out of pocket). In comparison, only 20% of overall health care spending was paid for out of pocket.

In 2003, prior to MMA, private health insurance was the largest third-party payer for prescription drugs, accounting for more than a third (36%) of total expenses.

Public insurers—primarily Medicaid—and other sources accounted for the remaining 20% in expenses.

Are prescription medicine expenses highly concentrated in certain age groups?

In 2003, Medicare covered not only elderly people but also younger people with certain disabilities and people with end-stage renal disease (permanent kidney failure with dialysis or a transplant, sometimes called ESRD).

Expenses for Medicare beneficiaries were somewhat concentrated in the non-elderly age group. Medicare beneficiaries under age 65 represented 14% of the population but accounted for 21% of expenses.

In the non-Medicare population, prescription medicine expenses were concentrated among people in the two older age groups.

Persons age 45–54 comprised 16% of the population and 27% of total expenditures, and persons age 55–64 made up 11% of the population and 31% of total expenditures—27% of the population accounted for 57% of total expenditures.

In contrast, people under age 45 made up 73% of the non-Medicare population but accounted for only about 43% of drug expenses.

In 2003, non-elderly beneficiaries had the highest average prescription expense per user among Medicare beneficiaries ($3,263).

Average annual drug expenses per user in the non-Medicare population increased steadily with age going from $148 for children under age 6 to $1,421 for the 55–64 age group.

What are the top five therapeutic classes of prescribed drugs when ranked by total expenses for the U.S. community population?

The five therapeutic classes of drugs accounting for the largest expenses in the community population in 2003 were cardiovascular agents, hormones, central nervous system agents, psychotherapeutic agents, and anti-hyperlipidemic agents.

The top five therapeutic classes of drugs accounting for the largest expenses for elderly Medicare beneficiaries in the community population in 2003 were cardiovascular agents, anti-hyperlipidemic agents, hormones, central nervous

What are the top five therapeutic classes of prescribed drugs when ranked by total expenses for non-elderly Medicare beneficiaries?

In 2003, of the $15.6 billion spent on prescription drugs by the 5.7 million non-elderly (under age 65) Medicare beneficiaries, a larger percentage was spent on central nervous system agents (23%) than on psychotherapeutic agents (16%), cardiovascular agents (10%), and hormones (8%). These were three of the top four remaining in the top five therapeutic classes of drugs for which reliable estimates could be made.

Of the top five therapeutic classes, central nervous system agents were purchased by the highest percentage of persons (58%), followed by cardiovascular agents (45%), psycho-therapeutic agents (40%), anti-infectives (35%), and hormones (32%).

What are the top five therapeutic classes of prescribed drugs when ranked by total expenses for the non-Medicare adult population?

In 2003, of the $92.0 billion spent on prescription drugs by the 175.9 million persons in the non-Medicare adult population (age 18–64), a larger percentage was spent on hormones (16%) than on any other therapeutic class. The remaining four therapeutic classes of drugs were psycho-therapeutic agents (13%), central nervous system agents (13%), cardiovascular agents (13%), and gastrointestinal agents (10%).

One-quarter of the adult non-Medicare population purchased at least one central nervous system agent. This was a higher percentage than for any of the other top five therapeutic classes of drugs.

Other facts

According to the National Association of Chain Drug Stores (NACDS), four out every five patients who visit a doctor in the United States leave with a prescription. The nation's prescription drug sales rose to about $132 billion last year from $121 billion in 1999, and are expected to rise a further 75 percent in the next five years. http://www.pharmacychoice.com/news/pr/reuters070301.cfm

Is "E-faxing" the same as "E-prescribing"?

2007-02-16T14:00:00.000-08:00

Is “E-faxing” the same as “E-prescribing”?

For now, it is in most cases.

It all depends on the definition of “electronic media” in the eRX final rule. This rule makes a distinction between systems that can generate NCPDP SCRIPT vs. prescribers that use simpler systems (the example is a word processor). The force of the support for e-faxing is based in part on the belief that clinicians using e-prescribing systems will naturally move from e-faxing to e-prescribing. This writer is not sure that is the case. Time will tell.

The definition of electronic media and discussion can be found at: 42 CFR Part 423 Medicare Program; E-Prescribing and the Prescription Drug Program; Final Rule
Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Rules and Regulations (see Page 67571).

quoting from the report:

Electronic Media by these definitions has the same meaning as this term is defined for purposes of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In 45 CFR 160.103, electronic media means. It includes: - Electronic storage media including memory devices in computers (hard drives), and any removable/ transportable digital memory medium, such as magnetic tape or disk, optical disk, or digital memory card; or -Transmission media used to exchange information already in electronic storage media. Transmission media include, for example, the internet (wide open), extranet (using internet technology to link a business with information only accessible to collaborating parties), leased lines, dialup lines, private networks, and the physical movement of removable/ transportable electronic storage media.

Certain transmissions, including of paper, via facsimile, and of voice, via telephone, are not considered to be transmissions via electronic media, because the information being exchanged did not exist in electronic form before the transmission. (p 67571) While we have determined that the NCPDP SCRIPT standard meets the test of adequate industry experience in many e-prescribing applications, in light of the comments received, we now recognize that prescribers using computer-generated faxes to transmit prescriptions to a dispenser’s fax machine that prints a hard copy of the original computer-generated fax merits separate consideration.

Because this computer-generated transmission started as an electronic version, it would constitute a transmission using electronic media as defined in the proposed rule, and, as a result, would be required to comply with adopted eprescribing standards.

In some cases, the prescriber’s software can generate SCRIPT transactions, but the ability is ‘‘turned off’’ because electronic communication with the pharmacy has not yet been established.
In other cases, the prescriber uses software (such as a word processing program) that creates and faxes the prescription document, but does not have true e-prescribing capabilities.

In the first case, the prescriber is already conducting e-prescribing, and should do so after the compliance date using the foundation standards. We would expect that the prescriber will establish electronic communication and begin to use the SCRIPT standard with little difficulty.

However, the prescriber in the second case is not actually capable of conducting e-prescribing using the standards being adopted by this rule. That prescriber is merely using word processing software and the computer’s fax capabilities in lieu of faxing paper. Requiring these prescribers to convert to e-prescribing using the foundation standards would likely result in their simply reverting to faxing paper. Consequently, requiring these entities to comply with the NCPDP SCRIPT Standard would force the vast majority of them to revert to paper faxes, and, thus, it would impose a significant burden on those entities presently using computer-generated faxing, and would be counterproductive to achieving standardized use of non-fax electronic data interchange for prescribing.

Moreover, we believe prescribers using computer fax capabilities will migrate to e-prescribing in time, possibly at the same time as they implement electronic health record systems. Therefore, we adopt an exemption which exempts those using computer-generated faxes from using the NCPDP SCRIPT Standard for transmitting prescriptions and prescription-related information. We believe this approach is consistent with the statutory direction that the Secretary has to issue uniform standards with the specific objective of improving efficiencies, including cost savings, in the delivery of care, and designed so that the standards, to the extent practicable, do not impose an undue administrative burden on prescribing health care professionals and dispensing pharmacies and pharmacists.

We interpret these statutory objectives as enabling us to ensure that existing functionalities and workflow are not disrupted for a large number of prescribers and dispensers. We believe this interpretation is appropriate given the burden that adherence to the statutory requirements would create and based on the requests in comments received in response to the proposed eprescribing rule. As indicated above, we anticipate that many prescribers and dispensers would revert to handwritten paper prescriptions or computergenerated prescriptions that are printed in hard copy and manually faxed to the dispenser. This practice would stand as a significant obstacle to the broader statutory goals of the electronic prescription drug program provisions, as well as limit the ability of Medicare beneficiaries and the Medicare program to benefit from the patient safety and cost savings anticipated from eprescribing drugs under Part D of Title XVIII of the Act. However, we encourage all prescribers using fax technology to move as quickly as possible to the use of electronic data interchange via the SCRIPT standard.

Definitions

2007-02-16T13:40:00.000-08:00

All references (unless cited otherwise) from 42 CFR Part 423 Medicare Program; E-Prescribing and the Prescription Drug Program; Final Rule
Federal Register / Vol. 70, No. 214 / Monday, November 7, 2005 / Rules and Regulations

E-Prescribing (p 67571) - the transmission, using electronic media, of prescription or prescription-related information, between a prescriber, dispenser, PBM, or health plan, either directly or through an intermediary, including an eprescribing network.

Electronic claims adjudication and other related administrative functions are outside the scope of e-prescribing as specified in section 1860D–4(e) of the Act. Moreover, a number of transactions standards for these administrative functions have already been adopted in the August 17, 2000 HIPAA Standards for Electronic Transactions and Code Sets Final Rule (HIPAA final rule) (65 FR 50312–50372) and modified in the February 20, 2003 Health Insurance Reform: Modifications to Electronic Data Transactions Standards and Code Sets (68 FR 8381–8399).

Dispenser - a person, or other legal entity, licensed, registered, or otherwise permitted by the jurisdiction in which the person practices or the entity is located, to provide drug products for human use by prescription in the course of professional practice.

Prescriber - a physician, dentist, or other person licensed, registered, or otherwise permitted by the U.S. or the jurisdiction in which he or she practices, to issue prescriptions for drugs for human use. The proposed definition does encompass individuals who are non-physicians, but who are permitted to issue prescriptions for drugs for human use. These non-physician providers could include CRNAs, nurse practitioners, and others. We also believe that it is inappropriate to include specific references to prescribing functions, such as electronic signatures, within this basic definition.

Prescription-related information - information regarding eligibility for drug benefits, medication history, or related health or drug information for a Part D eligible individual enrolled in a Part D plan.

We also believe that the e-prescribing provisions of section 1860D–4(e) of the Act, as amended by section 101 of the MMA apply to pharmacists, both dispensing and non-dispensing, who electronically transmit prescription and certain other information for covered drugs prescribed for Medicare Part D eligible individuals. The statute broadly includes medication history, eligibility, related health or drug information. Furthermore, we believe that ‘‘medication history or related health or drug information’’ is sufficient to include drug allergies and personal allergies.

Medication Reconciliation Issues

2006-11-11T14:30:00.000-08:00

Background

Poor communication of medical information at transition points of care has been cited as a cause of many medication errors. It is estimated that 46% of medication errors occur during the patient's admission or discharge from a clinical unit and/or hospital. Other studies have shown discrepancies in medication orders to be frequent, and as many as half of all hospital medication errors occur at the interfaces of care.

Incorporating protocols and processes for reconciling medications at each intersection of a patient’s care (i.e., admission, transfer, and discharge) has shown to significantly reduce both medication errors and adverse drug events. During an 11-month period (September 2004 – July 2005) there were 2,022 medication errors reported to USP’s MEDMARX® program that involved a reconciliation issue. Approximately 22% (n = 456) of the reconciliation-related errors occurred during the patient's admission to the facility, 66% (n = 1,329) occurred during the patient's transition/transfer to another level of care, and 12% (n = 237) occurred at the time of discharge.
(source: J. Santell: http://www.jcrinc.com/consulting.asp?durki=13427 )

Major Resources

Other Presentations and Readings

Links: Federal Government

2006-11-07T05:15:00.000-08:00

Executive orders and legislation pertaining to impact analyses

EO 12866 (Federal Register, October 4, 1993, Regulatory planning and review) - html

EO 13258 (amended EO 13258 - which primarily just reassigned duties and roles from the Vice President to others)

EO 13132 (addresses federalism issues)

Brookings Institute Review of 13258 (March, 2003)Regulatory Flexibility Act

Section 1102(b) of the Social Security Act (impact on small hospitals)

Unfunded Mandates Reform Act of 1995 (public law 104-4)

Final Rules for e-prescribing (Federal Register, Nov 7, 2005)

NCVHS Links

Other Resources

e-Prescribing Facts and Hypotheses

2006-09-29T15:28:00.000-07:00

Pharmacies and Pharmacists

Number of retail independent pharmacies – 18,958 (1)
Number of chain retail pharmacies - 35,877 (1)
Number of pharmacists - 229,740 (1)
Median salary of pharmacists - $88,000 (1)
Pharmacists make approximately 150 million clarifying phone calls to physicians annually. More than half of calls to physicians concern pharmacy issues. (Source: Institute for Safe Medication Practices (ISMP) White Paper: A Call to Action: Eliminate Handwritten Prescriptions within 3 Years, ISMP 2000)
30% of prescriptions require pharmacy call backs (Hutchinson, NCVHS May 25, 2004)
900 million prescription-related telephone calls are placed annually (Hutchinson, ibid)
One-fifth (20%) of pharmacy personnel time is spent solely on activities directly related to third-party issues (at a cost of approximately $1.18 per script).
Of this portion of pharmacy personnel time, 3.7% is spent on script clarification and data entry (which is reduced by receiving an electronic script).
The remaining 16.3% is spent handling issues related to prescription changes or rework due to eligibility, formulary and similar benefits coverage-related activities (which is reduced by receiving a prescription that was written with an awareness of patient benefits coverage). (Source: “Pharmacy Activity Cost and Productivity Study.” Arthur Anderson, LLP, funded by NACDS. November 1999)
The number of vacancies for pharmacists, which nationwide jumped from 2,700 in 1998 to nearly 7,000 in 2001. (DHHS)

1. http://www.hayesdir.com/services.html

Prescriptions

There are 3 billion prescriptions written annually in the United States. (1)
Over three and probably closer to four billion prescriptions are written each year. (Source: NACDS report, “The Chain Pharmacy Industry Profile 2001”)
Annual growth in pharmaceutical spending is estimated at 10 - 14%. (Healthcare Goldman Sachs report, February 16, 2001)
Drug price inflation is estimated to be 7.7% (3)
Express Scripts PMPY spending (2001) is $592.05. Expected to be $686.19 in 2002. (3)
25% of spending in 2001 was for gastric acid inhibitors, anti-depressants, and cholesterol-lowering drugs (need to clarify if this percentage excludes specialty and OTC drugs)
50% of spending concentrated in 10 therapeutic classes (out of 99 classes ); hypetension, depression, cholesterol, GI, diabetes, arthritis, asthma, antihistamines, calcium channel blockers, dermatology drugs
One-third of these prescriptions are never picked up. (Source: NACDS report, “The Chain Pharmacy Industry Profile 2001”)
Up to 30 % of the 3 billion prescriptions written annually require dispenser calls. This equates to 900 million phone calls at least (2)
Non-compliance with medication regimens causes more than 125,000 deaths annually in the United States. (Source: NACDS report, “The Chain Pharmacy Industry Profile 2001”)
Physicians in the community practice setting generate prescribing errors on approximately 2% of all new prescriptions they issue. It is estimated that up to a third of these may be harmful.
During the last 10 years, the number of dispensed prescriptions has grown between 2% and 7% annually, with an average of 5% growth per year. (Source: Prescription Drug Expenditures in 2001: Another Year of Escalating Costs. National Institute of Health Care Management, Research & Education Foundation, revised May 6, 2002)
Pharmaceutical spending is rising 10% to 14% annually due to inflation, an aging population, new products entering the market, and expansion of third-party coverage (which increases overall drug utilization). (Source: “Healthcare: Pharmaceutical Services” Goldman Sachs report, February 16, 2001).

Agency for Healthcare Research and Quality. MEPS Highlight #11: distribution of health care expenses, 1999.
Hutchinson, Kevin, SureScripts. Testimony before NCVHS Subcommittee on Standards and Security, May 25, 2004
Express Scripts Drug Trends Report, 2004. "Trends" chapter

Prescribers

Of the 777,600 MDs in the US, 473,000 are office-based and the source of outpatient prescriptions. (other sources give more conservative estimates - 301,000 active physicians). Of these, 30% are “high prescribers” either Family Practice, Pediatrics, Internal Medicine, Cardiology—accounting for up to 80% of written Rxs (2001 AMA statistics)
32% of physicians in 2004 worked in solo or two-physician practices
19% of physicians in 2004 worked in groups of 3-9 in size
A typical primary care physician writes as many as 30 prescriptions daily and wrote a equal number of renewals (30) each day. (Medical Economics, October 1988)
30% of prescribing physicians are considered "high prescribers" and account for 30% of written prescriptions (AMA statistics)
Although illegible handwriting is known to cause a substantial number of medication errors, fewer than 5% of U.S. physicians prescribe medications electronically. (Source: Institute for Safe Medication Practices (ISMP) White Paper: A Call to Action: Eliminate Handwritten Prescriptions within 3 Years, ISMP 2000)

More than half of the clinical calls to physicians concern pharmacy issues.

Specialty	Number
Family and GP	111,990
Internists	50,140
OB-Gyn	19,180
General Peds	26,910
Psychiatrists	19,530
Surgeons	49,710
Anesthesiologists	23,710
Other	?
Total	277,280

Fact	Value
Percentage of physicians that prescribe electronically (2000, eHI eRx report)	5%
Percentage of physicians in practices size 1-9 that prescribe electronically (2005)	13%
Percentage of physicians in practices size 10-50 that prescribe electronically (2005)	23%
Percentage of physicians in practices size > 51 that prescribe electronically (2005)	47%
Percentage of prescriptions written on "integrated" e-prescribing systems (2004, NCPDP, NCVHS, 3/30/04 p. 21)	3%

http://www.bls.gov/oes/current/oes_nat.htm#b29-0000
http://www.bls.gov/oes/2003/may/oes_29He.htm

Consumers

In 2000, there were 823 million visits to physician offices (National Center for Health Statistics, cited in 42 CFR Part 423)
Approximately 80% of patients leave a doctor visit with at least one prescription (NACDS, cited in 42 CFR Part 423)
Number of individuals enrolled in Medicare (200x) - 43 million (1)
Number enrolled in federally-subsidized drug plans - 22.5 million
Number enrolled in employer plans - 10.4 million
Number in other alternatives (e.g., VA) - 5.4 m
June, 2006 KFF report suggests that 90% of Medicare beneficiaries have some creditable prescription drug coverage.
Number expected to fall into the original "doughnut hole" - 25-33% (see: http://www.kff.org/medicare/rxdrugbenefit.cfm)
A typical 64-year-old person will take 6 prescription drugs on a regular basis. The average number of concurrently used prescription medications rises to 12 at age 75. (Source: NACDS report, “The Chain Pharmacy Industry Profile 2001”)
Approximately 80% of patients leave a doctor visit with at least one prescription (NACDS, cited in 42 CFR Part 423)
65% of the US public uses prescription drugs in a given year (AHRQ, cited in 42 CFR Part 423)
Of the filled prescriptions, 50% are taken incorrectly. (Source: NACDS report, “The Chain Pharmacy Industry Profile 2001”)

"Prescription Drug Coverage Among Medicare Beneficiaries. " Kaiser Family Foundation, June, 2006

Implications

Medication errors caused by misinterpreted doctor’s prescriptions were the second most prevalent and expensive claim counted on 90,000 malpractice lawsuits in the 1980’s and 1990’s. (Physician’s Insurer’s Association of America).
Medication errors and adverse drug events (ADEs) have become among the country’s most serious health care problems, accounting for over 770,000 injuries or death each year in hospitals, and costing up to $5.6 million each year per hospital, depending on size. (Source: Reducing & Preventing Adverse Drug Events to Decrease Hospital Costs. Research in Action, Issue 1. AHRQ Publication Number 01-0020, March 2001. Agency for Healthcare Research and Quality, Rockville, MD)
More than 9 million Americans experience adverse drug events and it is estimated that e-Rx systems can avoid 2 million of these - 130,00 are estimated to be life saving (CITL, 2003)
The financial costs of drug-related morbidity and mortality may exceed nearly $77 billion a year. (Source: To Err is Human: Building a Safer Health System. Linda T. Kohn, Janet M. Corrigan, and Molla S. Donaldson, eds. Washington, D.C.: National Academy Press 2000)
Costs of drug-related morbidity and mortality may run nearly $136 billion a year. (JA Johnson, JL Bootman “Drug-related Morbidity and Mortality and the economic impact of pharmaceutical care. American Journal of Health Systems Pharmacy, 54 (March 1, 1997) 554-558
Non-compliance with medication regimens causes more than 125,000 deaths annually in the United States. (Source: NACDS report, “The Chain Pharmacy Industry Profile 2001”)
More than $1 billion a year is spent on physician and hospital visits that result from medication errors, many of which are related to illegible handwritten prescriptions and adverse drug interactions (Source: To Err is Human: Building a Safer Health System. Linda T. Kohn, Janet M. Corrigan, and Molla S. Donaldson, eds. Washington, D.C.: National Academy Press 2000)
Lack of access to comprehensive information on patient’s outpatient medications contributes to ADEs both in the hospital and after discharge. (Source: Lesar TS, Briceland L, Stein D. Factors related to medication prescribing errors. JAMA. 1997; 277:312-317.
IOM report released 1999 indicated that up to 98,000 Americans die each year as a result of preventable medical errors. The cost associated with these errors in lost income, disability and health care costs is as much as 29 billion (IOM report, “To Err is Human; Building a Safer Health System” Institute of Medicine)
e-prescribing was estimated to save approximately $27 billion annually (source: eHealth Initiative e-prescribing report)
Projected savings from reduced phone time are estimated at $2.7 billion per year (source: Johnson et. al. Value of Computerized Order Entry in Ambulatory Settings. CITL, 2003).

NCVHS

2006-09-29T15:18:00.000-07:00

NCVHS Links

Generic Resources

2006-09-28T14:48:00.000-07:00

HHS Postings

NCVHS Links

eHealth Initiative Report - 2004

What are the Critical Standards?

NCPDP Formulary & Benefit Standard
Medication History function of NCPDP SCRIPT
Fill Status function of NCPDP SCRIPT
Prior Authorization (X12N 278)
RxNorm
Structured & Codified Sig
Follow this link to the Health Information Technology Standards Panel (ANSI) site

NCPDP Links

Other Presentations
The Who, What, When, and Where of the MMA 2006 E-Prescribing Pilots (Ken Wittemore, Surescripts) - ppt

Medicare Drug Benefit Resources

NACDS

State tracking on electronic transmission / e-Rx

CMS Pilots

CMS eRx RFA

RAND Corporation

RAND Corporation, Santa Monica, Calif., in conjunction with the New Jersey E-Prescribing Action Coalition, an industry-academic partnership involving RAND Health; Horizon Blue Cross Blue Shield of New Jersey; the e-prescribing vendors AllScripts, Caremark iScribe, and InstantDx; Caremark's prescription benefit management plans; the electronic prescription routing companies RxHub and SureScripts; Caremark's mail-order pharmacy and Walgreen's retail pharmacies will conduct the pilot in New Jersey. In addition to testing the standards, the project will determine changes in drug use, clinical outcomes, and patient satisfaction as a result of e-prescribing.

There are various conditions under which e-prescribing takes place:

No e-prescribing - paper and fax only.
E-prescribing with only the foundation SCRIPT functions for new and renewal prescriptions - a minimalist approach
e-prescribing with the inclusion of a broader package of standards added to SCRIPT, including eligibility

an alternative formulation (mef):

Paper and fax
e-Rx on computer to Fax to pharmacy
e-RX with minial SCRIPT functionality transmitting to pharmacy or through RxHub
e-prescribing in the context of a full-blown CDS and EHR (along the lines of a CITL top-level interoperable system)

Brigham and Women's Hospital

Brigham and Women's Hospital, Boston, Mass., in conjunction with physician practices in Massachusetts associated with a hospital network, will use an existing community utility for e prescribing called the eRx Gateway. The pilot will test the e-prescribing standards and will conduct needed research into ambulatory drug safety and the impact of e-prescribing on physician workflows.

SureScripts

SureScripts, Alexandria, Va., partnering with Brown University and five vendors (Allscripts, DrFirst, Gold Standard, Medplus/Quest Diagnostics, ZixCorp.) will recruit physicians and pharmacies for participation in Florida, Massachusetts, Nevada, New Jersey, Tennessee, and potentially Rhode Island. The pilot will evaluate how the e-prescribing standards work in a variety of practice settings, geographic areas, and e-prescribing technologies. In addition, the project will assess how prescriber and vendor characteristics influence e-prescribing adoption and what "best features" of vendor software improve medication-related safety outcomes.

Three standard information flows:

NewRx - new prescription generated by prescriber , sent to SureScripts, sent to pharmacy, and picked up by patient
RefReq - request for refill generated by pharmacy, sent to prescriber, approval given, and patient picks up medication from pharmacy
RefRes - request generated by prescriber, sent to SureScripts, sent to pharmacy, filled, and picked up by patient

Achieve Healthcare Information Technology

Achieve Healthcare Information Technology, Minnesota, in conjunction with nursing facilities in Minnesota associated with the Benedictine Health System and Preferred Choice Pharmacy will be the first program to evaluate how the e-prescribing standards work in certain long-term care settings. The project also will assess the impact of e-prescribing on the workflow among prescribers, nurses, the pharmacies and payers.

Standards for e-Prescribing and Medication Management

2006-09-30T09:22:00.000-07:00

/* NOTE: This page is very much a "work in progress." Suggestions appreciated. */

General References:

The Commission for Systemic Interoperability's publication "Ending the Document Game" has a 41 page appendix (Appendix C) summarizing all standards up to their 2005 report. This is among the most thoughtful, historical, and comprehensive summaries available.

Follow this link for Appendix C

NCVHS (2/2/2004 note to Secretary Thompson) identified three types of standards:

Message format standards

Continuity of Care Record (CCR)

NCPDP Script telecommunications

NCPDP Script formulary and benefit information

This standard displays the formulary status and alternative drugs as well as co-pays and other status information

NCPDP Script medication history

Includes the status, provider, patient, coordination of benefit, repeatable
drug, request, and response segments of SCRIPT

NCPDP Script fill status

Informs when Rx filled, not filled, or partially filled. Includes provider,
patient, and drug segments of SCRIPT message. Not yet generally used.

NCPDP Script change request and response

This the primary means by which a pharmacy may request of a provider a
clarification, correction, or change in drug as a result of therapeutic
substitution or other rationale.

NDPDP Script cancellation

Cancels a prescription previously sent to a pharmacy. Not generally used at
present.

SIG messages

Indication, dose, dose calculation, dose restriction, route, frequency,
interval, site, administration time and duration, stop

X-12N-270/271 - eligibility

X12N-278 prior authorization

This is the portion of X12-278 that supports prior authorization. It required
header information, requester, subscriber, utilization management, and other
relevant information.

Terminology standards

RxNorm

RxNorm is organized around normalized names for clinical drugs. These names
contain information on ingredients, strengths, and dose forms. It includes the
sematic clinical drug (ingredient plus strength and dose form) and the sematic
branded drug representation (proprietary, branded ingredient plus strength)

RxNorm site

Identifier standards

Other Sites:

Readings

2006-10-03T08:03:00.000-07:00

John Halamka, MD; Jerilyn Heinold, MPH;Gail Fournier; Diane Stone; Kate Berry. E-Prescribing in Massachusetts:Collaboration Leads to Success. September / October 2006. Patient Safety and Quality Healthcare

Commission for Systemic Interoperability

CMS Pilot Update

2006-10-08T11:05:00.000-07:00

CMS Pilots

CMS eRx RFA

RAND Corporation
RAND Corporation, Santa Monica, Calif., in conjunction with the New Jersey E-Prescribing Action Coalition, an industry-academic partnership involving RAND Health; Horizon Blue Cross Blue Shield of New Jersey; the e-prescribing vendors AllScripts, Caremark iScribe, and InstantDx; Caremark's prescription benefit management plans; the electronic prescription routing companies RxHub and SureScripts; Caremark's mail-order pharmacy and Walgreen's retail pharmacies will conduct the pilot in New Jersey. In addition to testing the standards, the project will determine changes in drug use, clinical outcomes, and patient satisfaction as a result of e-prescribing.

Rand e-Rx Research Home Page
Bell et. al. A conceptual framework for evaluating outpatient electronic prescribing systems based on their functional capabilities. JAMIA 11(1), 2004: 60-70.
Rand corporation press release on CMS pilot
There are various conditions under which e-prescribing takes place:
No e-prescribing - paper and fax only.
E-prescribing with only the foundation SCRIPT functions for new and renewal
prescriptions - a minimalist approach
e-prescribing with the inclusion of a broader package of standards added to SCRIPT, including eligibility

an alternative formulation (mef):

Paper and fax
e-Rx on computer to Fax to pharmacy
e-RX with minial SCRIPT functionality transmitting to pharmacy or through RxHub
e-prescribing in the context of a full-blown CDS and EHR (along the lines of a CITL top-level interoperable system)

Brigham and Women's Hospital
Brigham and Women's Hospital, Boston, Mass., in conjunction with physician practices in Massachusetts associated with a hospital network, will use an existing community utility for e prescribing called the eRx Gateway. The pilot will test the e-prescribing standards and will conduct needed research into ambulatory drug safety and the impact of e-prescribing on physician workflows.

SureScripts
SureScripts, Alexandria, Va., partnering with Brown University and five vendors (Allscripts, DrFirst, Gold Standard, Medplus/Quest Diagnostics, ZixCorp.) will recruit physicians and pharmacies for participation in Florida, Massachusetts, Nevada, New Jersey, Tennessee, and potentially Rhode Island. The pilot will evaluate how the e-prescribing standards work in a variety of practice settings, geographic areas, and e-prescribing technologies. In addition, the project will assess how prescriber and vendor characteristics influence e-prescribing adoption and what "best features" of vendor software improve medication-related safety outcomes.

Three standard information flows:

NewRx - new prescription generated by prescriber , sent to SureScripts, sent to pharmacy, and picked up by patient
RefReq - request for refill generated by pharmacy, sent to prescriber, approval given, and patient picks up medication from pharmacy
RefRes - request generated by prescriber, sent to SureScripts, sent to pharmacy, filled, and picked up by patient

Achieve Healthcare Information Technology