CMS Proposes Standards for E-Prescribing Under Medicare Part D

Overview

On Friday, November 16, 2007, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule (CMS-0016-P) to adopt final uniform standards for an electronic prescription drug program under the Medicare Prescription Drug Program, or Part D. There is a 60-day public comment period on the proposed rule. Comments are due to CMS by January 15, 2008.

Background and Overview

The prescription drug benefit established under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the MMA) required Prescription Drug Plan (PDP) sponsors and Medicare Advantage (MA) organizations to establish electronic prescription drug programs to provide for the electronic transmittal of certain information, such as information on eligibility, drugs included in the applicable formulary, information on tiered formulary structure, or information on prior authorization, to the prescribing provider, dispensing pharmacy and pharmacist. The MMA directed the Secretary of Health and Human Services to issue uniform standards for the electronic transmission of such data.

This proposed rule does not require that prescribers or dispensers implement e-prescribing. However, it would require prescribers and dispensers who do electronically transmit prescription and other drug information under Part D to comply with any final standards that are adopted.

On November 7, 2005, CMS issued a final rule containing the first set of standards, known as the “foundation standards,” which were adopted after consultation with the National Committee on Vital and Health Statistics (NCVHS) based on industry experience with these standards. The foundation standards address the exchange of eligibility information between prescribers and Medicare Part D sponsors; the exchange of eligibility inquiries and responses between dispensers and Medicare Part D sponsors; and the exchange of certain transactions between prescribers and dispensers, such as new prescriptions, changes, renewals, or cancellations.

The MMA also called for pilot testing of initial e-prescribing standards in 2006. The Secretary included six initial standards in pilot testing that was conducted during 2006. According to the statute, final standards must be issued not later than April 1, 2008, with an effective date not later than one year after the date they are issued. The final standards will incorporate the findings of the pilots sites, as well as public comments that are received in response to this proposed rulemaking.

Summary of Proposed Rule

The proposed rule describes the initial standards that were pilot tested and the findings of the pilot sites. The rule then proposes to adopt additional standards and identifiers for use in an electronic prescribing program under Medicare Part D. Finally the rule proposes a compliance date for adopting final uniform e-prescribing standards and solicits comments from the public.

Pilot Testing of Initial Standards and Findings

The six initial standards testing in the pilot project were:

• Formulary and benefit information – intended to provide prescribers with information from a plan about a patient’s drug coverage at the point of care. The pilot sites found that adoption of this standard for formulary and benefits transactions between plans and providers may deliver added value in approximating patients’ drug coverage and lead to patient-specific, real-time benefit information.

• Exchange of medication history – intended to provide a uniform means for prescribers and payers to communicate about the list of drugs that have been dispensed to a patient. The pilot sites found the proposed medication history standard to be well structured and supportive of the exchange of information. They did not find the proposed standard to impose an undue administrative burden and support its use as part of the e-prescribing program under Medicare Part D.

• Structured and codified SIG – to describe instructions for taking medications (such as “by mouth, three times a day”) that are currently expressed as free text at the end of a prescription (called the signatura, and commonly abbreviated SIG). The pilot sites found that the proposed standard format needs additional work, particularly in reference to field definitions and examples, field naming conventions and clarifications of field use. In order to reduce medication errors and improve patient safety, the pilot sites found it imperative that the prescriber’s instructions be translated exactly into e-prescribing and pharmacy practice management systems. Therefore, this standard was not found sufficiently developed for use in Part D e-prescribing.

• Fill status notification function – to be used by the dispenser to notify the prescriber if a patient has picked up a prescribed medication at the pharmacy. The pilot sites’ found no market demand for this information, and observed that it may cause an unnecessary administrative burden on prescribers and dispensers. Prescribers expressed concern about being inundated with data if they were to be informed every time a prescription was filled or not filled, and they were unsure of the usefulness of this information.

• Clinical drug terminology – to provide standard names for clinical drugs (active ingredient + strength + dose form) and for dose forms as administered to a patient. The pilot sites found that this standard was not sufficiently developed for effective and accurate use for Medicare Part D e-prescribing.

• Prior authorization messages – to obtain certification from the plan to a provider that the patient meets criteria for a drug to be covered. The pilot sites found prior authorization to be a complex standard to implement and noted that modifications would be needed prior to adoption as a final standard for the Medicare Part D e-prescribing program.

Provisions of the Proposed Rule

The proposed rule issued on November 16, 2007, contains the following proposals and solicits public comments:

• Replace the NCPDP SCRIPT version 5.0 foundation standard with NCPDP SCRIPT version 8.1 for current e-prescribing transactions. CMS solicited comments on the updated version in an interim final rule with comment on June 23, 2006, and received comments in favor of adopting version 8.1.

• Adopt an E-prescribing Standard for Medication History Transactions. The pilot sites demonstrated that this standard can be successfully implemented among e-prescribing partners. If NCPDP SCRIPT version 8.1 (proposed above) is adopted, CMS proposes to use version 8.1 for electronic medication history transactions for covered Part D drugs for eligible individuals. CMS proposes that the adoption of this standard will substantially reduce the number of preventable adverse drug reactions and result in cost savings.

• Adopt an E-prescribing Standard for Formulary and Benefit Transactions. The pilot sites demonstrated that the NCPDP Formulary and Benefits Standard version 1.0 can be successfully implement among e-prescribing partners. CMS proposes that the adoption of this standard may deliver added value in approximating patients’ drug coverage and lead to specific, real-time benefit information, which prescribers can consider during the prescribing process in order to make the most appropriate drug choices. Patients would also benefit through out-of-pocket savings, for example by avoiding the increased expenses resulting from prescribed drugs that are not on their plan’s formulary.

• Adopt the National Provider Identifier (NPI) as a Standard for Use in E-Prescribing Transactions. While the NPI was not tested during the pilot project, CMS notes that there is currently adequate industry experience with the NPI to support its use in Part D e-prescribing transactions. The NCPDP SCRIPT 8.1 supports the use of the NPI. CMS specifically solicits comments as to whether the use of the NPI in HIPAA-compliant transactions constitutes adequate industry experience for using the NPI as a covered health care provider identifier in Part D e-prescribing transactions.

• Issue Final Standards Not Later than April 1, 2008, Effective 1 Year After Publication. CMS solicits comments regarding the impact of these proposed dates on interested stakeholders and whether an earlier compliance date should be adopted.

Public Comments

Comments on the proposed rule will be accepted until 5 p.m. on January 15, 2008.