BOSTON, Oct. 9 -- The first-year Medicare bonus for e-prescribing could be enough to pay for the software, and that's not counting the efficiency savings, HHS officials said here.
"There's a lot of money on the table," said HHS Secretary Michael Leavitt, who likened the bonuses to the toasters that banks gave away years ago to encourage customers to use ATM machines.
If every physician met the requirements of the program, the total outlay could approach $1 billion for 2009 alone, according to CMS. The average primary-care doctor who e-prescribes, though, may receive only $2,000 to $3,000 of that.
Still, speakers at the CMS e-prescribing conference said that even such a modest amount would go a long way toward paying for the necessary software. Plus, they said, doctors could easily recoup their investment through cost savings possible with the technology.
The e-prescribing incentive program was created by the federal Medicare Improvements for Patients and Providers Act of 2008. Under MIPPA, doctors who e-prescribe for Medicare patients in 2009 and 2010 will receive a 2% bonus based on their total Medicare revenue.
The bonus decreases to 1% in 2011 and 2012, 0.5% in 2013, and then disappears.
Doctors who don't e-prescribe by 2012 will suffer a 1% pay cut that year, a 1.5% cut in 2013, and a 2% cut every year thereafter.
In other words, the carrot is temporary, but the stick is permanent.
MIPPA is clearly aimed at internists and family physicians, who write the bulk of prescriptions for Medicare patients. The American Academy of Family Physicians reports that Medicare accounts for roughly 23% of the average family physician's total revenue.
In 2006, median revenue for family physicians who don't deliver babies was $359,000, according to the Medical Group Management Association; 23% of that comes to $82,570.
So, for an e-prescribing family physician, the Medicare revenue would yield a bonus in 2009 of roughly $1,650.
With their strictly adult caseload, internists derive a higher percentage of revenue from Medicare, and stand to gain a bigger bonus, given that their total revenue is roughly equal.
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| CMS acting administrator Kerry Weems |
So how tempting will this carrot be? CMS acting administrator Kerry Weems said the cost of an e-prescribing system ranges from $2,500 to $3,000 per doctor.
With just $2,000 dollars in Medicare bonus money, however, doctors could afford to buy a number of the e-prescribing programs exhibiting at the conference.
A company called DrFirst sells its RCopia program, for example, for a first-year cost ranging from $450 to $799, depending on the length of the contract and other factors. Allscripts, another company exhibiting at the conference, makes a Web-based program called Allscripts ePrescribe, available to doctors free of charge. And health insurers frequently subsidize software costs for network doctors. (See: CMS-eRX: Private Insurers Subsidize E-Prescribing Software)
Of course, physicians may need to invest in extra hardware like a laptop or hand-held computer to use the software, but nevertheless, e-prescribing represents a far smaller investment than an electronic health record system (EHR), which costs up to $50,000 per doctor.
"The pieces still have to fall together for the business case for EHRs," said Weems. "E-prescribing is less expensive and less disruptive to implement, and the incentives turn the business case around."
Weems and others also touted the ability of e-prescribing to lower operating costs for physicians. The rigmarole of managing paper prescriptions -- everything from fielding phone calls from pharmacies about illegible scripts to chart pulls -- costs the average physician $15,700 a year in labor.
Family physician Jim Morrow in Cumming, Ga., a conference speaker, attested to the efficiencies possible with e-prescribing, which brings with it two-way electronic communication with pharmacies.
"I get seven to 15 refill requests from pharmacies every day," said Morrow, who estimates he could receive a Medicare bonus of roughly $2,000 for 2009. "Before our practice started to e-prescribe, the requests used to come in by fax or phone. A nurse would relay the request to me, and I'd approve it or not and give it back to the nurse, who'd then contact the pharmacy. That could eat up five or six minutes of her time.
"Now the requests go directly into my e-prescribing system. I click "approved" and it's gone. The nurse isn't involved. Every time the nurse is involved, it costs me money."
That was just the kind of story that Michael Leavitt wanted told at the CMS conference. "We know e-prescribing can save time and money," he said. "It's time to move."