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October 08, 2010

Essential Role for E-Prescribing in Electronic Health Record Benefits


It seems the health care world is laser-focused on implementation of electronic health records, which has led to a disturbing trend: many payers assume that ePrescribing has been safely put to bed and they don’t have to pay attention to it anymore. Nothing could be further from the truth. While ePrescribing has come a long way and overall implementation is proceeding, left to its own devices, it may not be progressing in a manner that is advantageous to payers.

This situation basically results from the rush toward meeting the federal government’s meaningful use (MU) requirements so eligible providers can receive hefty incentive payments. These incentives are designed to encourage adoption of electronic health records (EHRs), of which ePrescribing is a component. Surescripts estimates that ePrescriptions will jump from 190 million in 2009 to 300 million in 2010, in part due to the government’s MU incentives.

While the electronic transmission of a prescription to the pharmacy is an integral part of MU, the transactions that add most value and return on investment for payers are not front and center among the MU requirements. Specifically, formulary and benefit checks have moved to the menu set or optional requirements, and eligibility checking has been bumped off the list entirely. While formulary and benefit checking will reportedly be mandatory in Stage 2, it is not known publicly why eligibility drew the short straw or if it will reemerge in future stages.

Now, we acknowledge that an eligibility request must be completed before a medication history request and that this transaction can feed medication reconciliation, which is also in the MU menu set. In addition to it being optional in Stage 1, we also point out that there are other ways to complete medication reconciliation, the MU metrics don’t require a transaction and all eligible providers are doing is “attesting” that they’re performing medication reconciliation.

What’s happening is that an increasing number of providers using electronic health records (EHRs) are turning off the formulary and eligibility checking functions. One reason is because formulary is elective and eligibility is not a requisite. Another harkens back to the EHR architecture, which can be clumsy when it comes to linking a formulary and doing eligibility requests. The source is both technical and philosophical. On the technical side, many EHRs are still client-server models, which mean there are servers in the group practice that, in turn, link to a main server. Getting the response from an eligibility request can take longer than the physician desires as it bounces from point to point. If formulary is linked to the patient by a means other than eligibility, there are challenges, as well, often involving a manual process. On the philosophical side, EHRs evolved from electronic medical records, which were designed to be the electronic version of paper records, meaning that they weren’t meant to be interoperable.

For payers, formulary matters because it affects the value proposition, which is derived initially and significantly from encouraging prescribing of lower-cost alternatives. It’s also the easiest component of the EHR to measure. Eligibility matters because of the complexities associated with pharmacy benefit design. It’s kind of complex but, in summary, benefits for companies such as GM, Ford and Chrysler or the UAW—who carve out the pharmacy benefit—may often be misidentified in the EHR if eligibility is not involved. In managing the Southeastern Michigan ePrescribing Initiative (SEMI), we found an average savings of $4.78 per prescription. When that analysis was completed, all prescribing decisions were made from an eligibility-informed formulary.

To our knowledge, no one has controlled for the difference between eligibility-informed formulary and that which is not, or that which is not informed by formulary at all. Nearly all studies conducted on ePrescribing have found savings in the $2.50 to $7/e-Rx range. The exception was a study published in 2005 in the Journal of Managed Care Pharmacy in which the authors, S. Michael Ross, MD, MHA, et al, were unable to find improvements in formulary compliance between ePrescribers and a control group. This was in the early days of ePrescribing (2001-2002), before the eligibility transaction and when plan-level formulary was being linked manually to benefits information derived from the practice management system. We would submit that this kludge method had a great deal to do with the findings.

In managing SEMI, we saw a shift from free-standing, robust, interoperable ePrescribing solutions to EHRs that were becoming increasingly interoperable but, in some cases, regressing to 2001-02. We’re there to remind the providers why they don’t want to turn off formulary, work with the vendors to address their architecture issues and promote formulary linking, in general. If we weren’t there, what would the results have been?

The reality is that the value of eligibility-informed formulary doesn’t just accrue to the payer. It reduces downstream noise and inefficiencies for providers and hassle for the patients. In addition, it helps providers meet Stage 1 of MU, and can help them qualify for pay-for-performance programs. Sometimes, however, the provider isn’t aware of all of this or how the complex system works and either gets frustrated or chooses the path of least resistance.

In Michigan, we’re there to ensure the value proposition. In your market and with your providers, who’s doing the same.


Tony Schueth is founder, CEO and managing partner of Point-of-Care Partners, LLC, a health care information technology consulting firm. To read more of his articles, please visit his columnist page.

Edited by Erin Monda

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