Why Medicare's E-Prescribing Bonus Gives Labs A New Opportunity for Added Value. Ravi Sharma, CEO 4medica, Inc.

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1 Why Medicare's E-Prescribing Bonus Gives Labs A New Opportunity for Added Value Ravi Sharma, CEO 4medica, Inc.

2 eprescribing definition The transmission, using electronic media, of prescription or prescription-related information between a prescriber, dispenser, pharmacy benefit manager or health plan, either directly or through an intermediary. It includes: Two-way transmissions between the point-of-care and dispenser Decision support to aid in safer, more informed prescribing Drug-to-drug interactions Patient medication history Formulary and benefits information

3 System Qualifications As of January 1, 2009 prescribers using a qualified system to prepare and send electronic prescriptions can receive higher reimbursement under Medicare A qualified system must be able to: Generate a complete medication list Select medications Transmit prescriptions electronically using the applicable standards Warn the prescriber of possible undesirable or unsafe situations Provide information on lower-cost, therapeutically appropriate alternatives. Provide information on formulary or tiered formulary medications Patient eligibility and authorization requirements The prescription must be sent electronically to an e-prescribing-capable pharmacy. If the pharmacy is not able to receive electronic prescriptions, it may convert to a fax A system is not qualified If can only send faxes to pharmacies The qualification rules apply to all systems Stand Alone Incorporated in EMR MIPPA defines additional rules for physician qualifications

4 Who is Eligible Qualified Clinicians Physicians Nurse practitioners, Physician assistants, Clinical nurse specialists Certified registered nurse anesthetists Clinical psychologists Others Registered dietitians, Certified nurse midwife, Clinical social workers Physical or occupational therapists, Nutrition professionals Qualified speech-language pathologists, Qualified audiologists Physicians for whom office visits, consultations, eye exams, psychotherapy or other services represent at least 10% of their Medicare charges AMA estimates nearly all office based physicians will meet this threshold For incentives and penalties

5 Additional Physician Qualifications The incentives are based on calendar year totals Physicians do not need to start on January 1, 2009 As long as Medicare e-prescribing G Codes are used on at least 50% of all Medicare office visits and consultations G Codes to report using an e-prescribing system G8443 for all prescriptions G8445 no prescriptions was generated during the encounter G8446 did not e-prescribe due to state or federal law or regulations that required to phone-in or print the prescription G8446 did not e-prescribe because the prescription was for narcotics or other controlled substances G8446 the patient requested that prescription be printed or phoned-in G8446 the pharmacy system could not receive electronic transmissions

6 Medicare Incentives & Penalties Incentives % +2% +1% +1% +1% -1% -1% -2% Increase/Decrease in amount of total allowed charges for covered professional services - Part B charges ehealthinitiative estimates that physicians can earn as much $17,000 per year in 2009 and 2010 in incentives Penalties

7 Expected Benefits of eprescribing Improving Patient Safety and Quality of Care Reducing time spent on phone calls and call backs to pharmacies Reducing time spent on faxing prescriptions to pharmacies Automating renewal request and authorization Increasing patient convenience and compliance Improving formulary adherence, lowering costs Allowing greater prescriber mobility Improving drug surveillance and recall ability

8 Why are the incentives only for Medication Prescriptions?

9 Medications Large Part of NHE In 2006, National Healthcare Expenditure (NHE) $2.1 Trillion increased 6.7% from 2005 Prescription Drugs accounted for 10% of NHE, over $210 Billion In 2005, there were roughly 964 million visits to physicians offices 4 out of 5 patient visits resulted in at least one prescription. Prescription medications are used by 59% of the under- 65 population About 80% of the over-65 population More than 3.52 billion prescriptions written in 2007 Expected to grow to 4.1 billion by 2010 e-prescribing could have been used for 1.5 billion prescriptions Actual usage, roughly 2% of potential

10 Medication Errors Adverse Drug Events The Institute of Medicine report, Preventing Medication Errors, found that More than 1.5 million adverse drug events (ADEs) each year are preventable More recent study by the Center for Information Technology Leadership (CITL) increased ADE estimates > 8.8 million each year in ambulatory care alone A QSHC study of 440 family physicians showed the prescribing error rate at 70% of which 50% could have been prevented Pharmacists caught 40% of errors which did not reach the patient 50% of the errors reached the patients 35% required monitoring 8% required an intervention 3% required hospitalization. Pharmacies make >150 million calls to busy physician practices each year Clarify prescriptions or discuss potential errors Medical Group Management Association (MGMA) found that these tasks cost practices on average $19,444 a year for a ten-physician practice Based on time and cost associated with manually processing refills Resolving issues related to formulary Issues related to dosage and legibility

11 Federal and States Expect Huge Savings Visante, on behalf of PCMA, projects savings $22B to federal government $56B to all payers Patient safety benefits 3.5M less ADEs 585K less hospitalizations Four key elements Lower cost alternative drugs Checking for interaction using medication history Mail order pharmacies Electronic entry

12 Surescripts/RxHub Surescripts is the result of a 2008 merger between the country s two leading health information networks: RxHub and SureScripts RxHub was founded in 2001 by the nation s three largest PBMs CVS Caremark Corporation Express Scripts Inc Medco Health Solutions, Inc SureScripts was also formed in 2001, by The National Association of Chain Drug Stores (NACDS) The National Community Pharmacists Association (NCPA) 8 years later Surescripts is the de-facto standard for eprescribing Qualified systems must certify with Surescripts in order to be eligible for incentives Includes EMR/EHR Includes stand alone systems

13 eprescribing Components Generic Substitution Formulary Compliance Renewal Authorization Drug to Drug interactions Drug to Allergy interactions Drug to Condition interactions Real Time Alerts Decision Support Clinical Guidelines Measurable Value Prescription Writer Drug Reference Guide Drug adherence Fraud and Abuse Detection Electronic submission to PBMs, Pharmacies Dispense Drug History Prescribe Drug History CoPay Costs Formulary Eligibility Drug to Lab interactions Medication Reconciliation Complexity & Investment Connectivity thru RxHub/Surescript

14 Increasing Participation Number of payers participating in Surescripts are growing At the end of 2008, 65% of patients were covered Number of pharmacies participating in Surescripts are growing At the end of 2008, 76% of community pharmacies were connected Active prescribers grew from 36,000 to 74,000 in % of all office based prescribers Over 60% are EMR users Only 30% of EMRs deploy all three eprescribing services compared to 80% of Stand Alone systems

15 Physicians Satisfaction Increasing Surveys taken prior to the Medicare Incentives show increased acceptance by physicians Over 500 physician surveys indicate that More than 70% are highly satisfied with their current eprescribing method Only 6% of physicians are highly dissatisfied Overall satisfaction is similar across vendors Other key findings: Nearly 70% highly agree that eprescribing improves quality of care Almost 75% highly agree that eprescribing improves patient safety Approximately 70% were very satisfied with the ease of drug-related interactions More than 60% of physicians report at least one incident of changing a prescription in response to a safety alert 71 percent highly agree that a patient s transaction at the pharmacy is faster and easier More than 50% highly agree that eprescribing saves clinicians time and increases productivity, A minority (16%) highly disagree More than 70% have seen a reduction in phone calls / faxes to / from pharmacies since using the e-prescribing system. About 25% highly agree that eprescribing will save patients money and reduce a practice s cost, while 20% highly disagree Over 60% of staff, 40% of MDs are much more likely to prescribe a generic or planpreferred drug.

16 eprescribing Gaining Momentum Total Rxs erxs 2, % 2,000 1 in 3 Rx electronically by ,738 1,865 2,000 90% 80% Millions 1,500 1,000 1,100 1,250 1,380 1,510 1,620 70% 60% 50% 40% Source: SureScripts National Progress Report on eprescribing, December 2007 <---Projected Growth ---> 30% 20% 10% 0% 16

17 Some States are Leading the Efforts

18 Why Medicare's e-prescribing Incentives Give Labs A New Opportunity for Added Value

19 Emphasis on Quality Healthcare is being pressured to shift from its episodic approach to patient centric healthcare Pay For Performance Evidence Based Medicine Disease Management Increasing need to integrate patient data from multiple sources NHIN RHIOs HIEs Greater emphasis on use of Decision Support to Improve outcomes Reduce costs

20 Labs Play a Key Role in Healthcare Over $50B, growing 5.5% per year About 3% of overall NHE expenditure, Drives 70% of total health dollars On average labs make up over 50% of a patient s chart Lab data drives a number of medication decisions Most medications are prescribed after reviewing lab data Medications are often continued, stopped or changed as a result of lab data, like Chemistry Sodium, Potassium, Chloride and Calcium Hematology Hemoglobin, Hematocrit, WBC, Antibiotic sensitivities Many drugs are expressly contraindicated by the FDA in conditions dependent on lab results Pregnancy Liver disease Renal thresholds for creatnine Heart failure Yet even in hospitals, lab systems generally are not integrated with pharmacy systems Most pharmacists do not have access to lab data Most studies and recommendations for eprescribing fail to mention the significance of lab data Qualification standards for eprescribing solutions do not include lab data

21 Opportunity for Labs Starting with the famous IOM Report To Err is Human The debate has been all about medications The labs have largely focused on Internal quality Productivity Competitiveness The labs hold a lead with their outreach efforts Bringing connectivity solutions to the physicians The labs can maintain this lead by providing value added services Informatics that Integrate labs into the care continuum Lab data with medications Promote use of decision support tools Improve quality of overall healthcare Reduce healthcare cost

22 Labs Can Maintain Lead Physician offices already have Practice Management Systems Some have Electronic Medical Records Most still use paper charts Some have a lab portal or dedicated terminal or printer Stand alone eprescribing would require yet another system to access Adversely impacting practice workflow Patient lab data is integral for prescribing, monitoring and changing medications Improving safety Reducing costs through prevention Lab Outreach is available to more physicians than eprescribing at this time At least one major commercial lab has started offering graphing of lab values with medications

23 Example of technology that leverages lab data for medication ordering using Decision Support

24 4medica s eprescribing solution Unique features Decision support for Drug to Lab Interactions At the time of meds order and as lab values change Graphing - up to 4 lab analytes and 4 medications on a single graph Automated Alerting to changes in lab values that affect meds Other features Create common lists of frequently ordered medications Access patient s historical medications through RxHub interface Patient preferred or practice preferred pharmacies In case of contra indications physicians can easily select Alternative Drugs Print, Fax, or electronically transmit prescriptions Formulary coverage Drug to drug interactions Drug to allergy interactions Drug to clinical history Common List Multi analyte/meds graphing

25 Conclusion Healthcare is moving towards integration of patient s clinical record Labs play a key role in healthcare Labs already have a lead with outreach programs Medicare incentives provide an opportunity for labs to provide added value services Build closer associations with the physicians they serve Improve the quality of healthcare Reduce overall healthcare costs

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