News Release

Electronic Prescribing Standards Announced to Make Medicare's New Prescription Drug Benefit Easier and Safer

HHS Secretary Mike Leavitt today announced adoption by regulation of a set of standards for the electronic prescription of Part D drugs, which will make the use of prescription drugs easier and safer for Medicare beneficiaries.

The final rule establishes a set of foundation standards for electronic prescribing or �e-prescribing� of drugs covered by Medicare. The industry is already sufficiently experienced with these foundation standards, which will be available for immediate use when Medicare�s new prescription drug benefit begins Jan. 1, 2006.

�These standards will allow Medicare, physicians, hospitals, group practices, other health providers, and prescription drug plan sponsors and Medicare Advantage organizations to take advantage of e-prescribing technology, to improve medication prescribing for Medicare beneficiaries that participate in the new prescription drug program,� Secretary Leavitt said.

Electronic prescribing enables a physician to transmit a prescription electronically to a patient�s pharmacy of choice. This not only can be easier for the physician, pharmacy, and patient than paper prescriptions, but it also can improve patient safety and reduce avoidable health care costs by decreasing prescription errors caused by hard-to-read handwriting and communication errors, and by automating the process of checking for drug interactions and allergies.

�All of the Medicare prescription drug plans must comply with these newly established foundation standards for e-prescribing, which will improve drug safety and reduce costs,� said Mark B. McClellan, M.D., Ph.D., administrator of Centers for Medicare & Medicaid Services (CMS). �We are making e-prescribing easier to implement, to accelerate the use of e-prescribing in Medicare and throughout the nation�s health care system.�

E-prescribing will ultimately help physicians, pharmacies, and patients obtain timely and relevant information on the most effective and least costly drug based on the latest medical evidence. They will also be able to obtain information from drug plans about a patient�s eligibility. Having access to this information at the point of care will make writing, transmitting and filling prescriptions quicker and easier, and will also ensure that physicians can make informed decisions about alternative, lower-cost, therapeutically appropriate medications.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created a new voluntary prescription drug benefit under Medicare, which is administered by CMS. Although e-prescribing will be optional for physicians and pharmacies, Medicare will require drug plans participating in the new prescription benefit to support electronic prescribing. Compliance with these standards will be required on Jan. 1, 2006, so that they will be ready for immediate use when the Medicare drug benefit begins.

The foundation standards are:

• NCPDP SCRIPT Version 5.0 for transactions between prescribers and dispensers for new prescriptions, refill requests and response, prescription change request and response, prescription cancellation request and response, and related messaging and administrative transactions.
• ASC X12N 270/271, Version 4010 and addenda, for eligibility and benefits queries and responses between prescribers and Part D sponsors.
• NCPDP Telecommunication Standard, Version 5.1, and supporting NCPDP Batch Standard, Version 1.1, for eligibility queries between dispensers and Part D sponsors.

Along with the start of the Medicare drug benefit and implementation of the foundation standards on Jan. 1, 2006, Medicare will begin a pilot project to test �initial� e-prescribing standards, which may be included in a final rule to be issued no later than April 1, 2008. Any initial standards that are adopted in that final rule will be effective no later than one year from the date the final rule is issued.

These initial standards include those for information on formulary and benefits, patient instructions, prior authorization messages and clinical drug terminology. Collectively, these additional standards can make it easier for the appropriate drugs that are reimbursed under the new Medicare drug benefit to be selected, refilled and dispensed which will enhance the benefits to patients, doctors and pharmacists.

In addition, CMS has awarded a grant to MedCo Health Solutions, Inc. to evaluate the impact of the Southeastern Michigan Electronic Prescribing Initiative. This study will be complementary to the pilot project and should provide short-term lessons learned from one of the nation�s largest electronic prescribing programs.

The final rule went on display at the Federal Register today and will be published on Nov. 7, 2005.