BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 718
A
AUTHOR: Emmerson
B
AMENDED: June 16, 2009
HEARING DATE: June 25, 2009
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REFERRAL: Business, Professions and Economic
Development 1
CONSULTANT:
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Bain/
SUBJECT
Inland Empire Health Plan E-Prescribing Pilot Program
SUMMARY
Establishes, until January 1, 2013, the Inland Empire
Health Plan E-Prescribing Pilot Program (Program), and
requires the program to meet specified requirements,
including requiring the Program to promote health care
quality and the exchange of health care information
including clinical decision support, formulary information,
drug compendia and patient drug history.
CHANGES TO EXISTING LAW
Existing law:
Existing law (the Pharmacy Act) prohibits a person from
furnishing any prescription drug, except upon the
prescription of a physician, dentist, podiatrist,
optometrist, or other specified health care providers.
Under existing law, a "prescription" is defined as an oral,
written, or electronic transmission order issued by a
physician, dentist, optometrist, podiatrist, veterinarian,
or other specified health care provider, that is given
individually for the person or persons for whom it is
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ordered. The prescription must include specified
information, including the name of the patient, the name
and quantity of the drug prescribed and the directions for
use, the date of issue, and a legible, clear notice of the
condition for which the drug is being prescribed, if
requested by the patient.
Existing law defines an "electronic data transmission
prescription" as any prescription order, other than an
electronic image transmission prescription, that is
electronically transmitted from a licensed prescriber to a
pharmacy.
Existing law requires an electronic data transmission
prescription to be filled by, or under the direction of,
the pharmacist.
This bill:
Establishes the Program, and requires it be administered by
an entity with certification from the Certification
Commission for Healthcare Information Technology (CCHIT)
and selected by the Inland Empire Health Plan (IEHP)
through a competitive bid process.
Requires the Program to promote health care quality and the
exchange of health care information consistent with
applicable law, including, but not limited to, applicable
state and federal confidentiality and data security
requirements and applicable state record retention and
reporting requirements.
Requires the Program to include all of the following
components:
Integrated clinical decision support alerts for
allergies, drug-drug interactions, duplications in
therapy, and elderly alerts.
Current payer formulary information.
Appropriate alternatives, when needed, to support
cost-effective prescribing at the point of care.
Drug compendia approved by the Centers for Medicare and
Medicaid Services.
Electronic prescribing consistent with applicable state
and federal law.
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Patient drug history.
Prohibits electronic prescribing under the Program from
interfering with a patient's existing freedom to choose a
pharmacy and from interfering with the prescribing decision
at the point of care.
Requires the entity administering the Program, on or before
January 1, 2012, to submit a report to the Legislature on
the goals and results of the Program and whether the
Program should be extended. The report must include
quantifiable data on all of the following:
The number of prescribers enrolled in the Program who use
electronic prescribing.
The number of pharmacies participating in the Program.
The number and percentage of prescriptions sent
electronically as a percentage of the overall number of
prescriptions reimbursed by the plan.
Expenditures on the Program.
Data on whether and to what extent the Program achieved
the following goals:
o Reduced medication errors.
o Reduced prescription fraud.
o Reduced health care costs, including, but not
limited to, inpatient hospitalization, by reducing
medication errors, increasing patient medication
compliance, and identifying medication
contraindications.
Provides that a violation of this bill is not considered a
crime, as specified.
Defines "electronic prescribing" as a prescription or
prescription-related information transmitted between the
point of care and the pharmacy using electronic media.
FISCAL IMPACT
AB 718 has not been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
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According to the author, AB 718 will promote health care
quality and the exchange of health care information by
creating the Inland Empire Health Plan E-Prescribing Pilot
Program. The author argues electronic prescribing would
increase safety and efficiency, as electronically created
and transmitted prescriptions would streamline the
prescribing process and enhance communication among health
care professionals, while maintaining safe and high quality
services. Additionally, the author argues electronically
created and transmitted prescriptions can reduce or
eliminate errors in the physician's office at the point of
prescribing, and at the pharmacy when a written or oral
prescription is entered into a pharmacy's computer system.
The author continues that this will enable physicians to
know whether the patient has picked up his or her
prescribed medication, thus better ensuring patient
compliance. Furthermore, prescriptions will be completely
legible, and physicians will have an electronic record of
what has been prescribed, making pharmacy prescription
records immediately retrievable. Additionally, electronic
prescriptions will provide pharmacists with a higher level
of confidence in the authenticity of prescriptions.
Lastly, the author argues e-prescribing would make
improvements in health care quality and efficiency by
ensuring that patients with multiple physicians are not
being over-prescribed or taking medications that are
contradictory in nature, and by ensuring that only Medi-Cal
approved medications are prescribed as a physician will be
immediately notified if the medication is not on the
formulary. The author anticipates this measure to generate
significant savings.
E-prescribing evolving
E-prescribing is the digital generation and transmission of
a prescription from a prescriber (typically through a
computer or handheld device) to a pharmacy. Electronic
prescribing offers a number of advantages over paper-based
prescribing. A full-fledged electronic prescription system
enables prescribers to send an accurate, error-free and
understandable prescription directly to a pharmacy from the
point-of-care. This reduces the potential for medication
errors due to illegible prescriber handwriting, reduces the
likelihood of prescription fraud from forged prescriptions,
decreases administrative costs incurred by pharmacies and
prescribers in verifying handwritten prescriptions, reduces
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medication errors by notifying prescribers of potential
adverse drug interactions with medications the patient is
currently taking, enables patients to be informed of
whether the prescribed drug is covered and if a lower-cost
generic drug is available, and reduces patient wait time at
the pharmacy.
A November 2008 issue brief by the California HealthCare
Foundation (CHCF) entitled "The Outlook for Electronic
Prescribing in California" reported that in 2007,
California's retail pharmacies (excluding Kaiser and the
Veterans Administration) filled more than 268 million
prescriptions but, of these transactions, only about 2.4
million were sent electronically between physician
practices and pharmacies. While this amount is a
significant improvement from the 311,097 recorded in 2005,
it represents only 1.2 percent of the total prescriptions
written in California each year. The CHCF report stated
that the adoption of e-prescribing in California has been
slow due to a number of possible reasons, including the
cost involved in implementing the technology at provider
practices, clinics and pharmacies, legal restrictions that
prevent electronic prescribing of controlled substance
prescriptions, and fees associated with using electronic
prescribing networks.
Federal legislation
The American Recovery and Reinvestment Act (ARRA), which
became law in February 2009, provides substantial financial
incentives to encourage the adoption of health information
technology (HIT) systems. According to a CHCF report
entitled "What California Stands to Gain: The Impact of
the Stimulus Package on Health Care," ARRA authorized
roughly $36 billion over 6 years, approximately $34 billion
of which is expected to be distributed between 2011 and
2016 as adoption incentives in Medicare and Medicaid to
qualified health care providers, who adopt and use
electronic health records. ARRA also authorizes the
federal Department of Health and Human Services to make
foundational investments of $2 billion in infrastructure
outlays through grants, loans, and demonstration programs.
In 2008, the U.S. Congress passed the Medicare Improvements
for Patients and Providers Act (MIPPA) which contains
electronic prescribing incentive payments starting in 2009
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and imposes penalties for those who do not adopt
e-prescribing by 2012. Specifically, pursuant to MIPPA,
providers would receive a reimbursement bonus of 2 percent
from Medicare for switching to e-prescribing by 2009, an
amount that is reduced to 1 percent in 2011 and 0.5 percent
in 2013. Providers who fail to make use of the technology
would begin to see their payments decreased by 1 percent in
2012, 1.5 percent in 2013 and 2 percent in 2014 and beyond.
In addition, the federal Drug Enforcement Agency (DEA),
which is responsible for the regulation and enforcement of
the Controlled Substances Act (which include prescription
medication classified as a Schedule II - V drug) will be
issuing proposed regulations later this year that would
provide physicians and other authorized prescribers with
the option of issuing electronic prescriptions for
controlled substances. Until the DEA's controlled
substance standards are modified, pharmacies and
prescribers in California must continue to create paper
copies of these particular prescriptions. CHCF's report
estimates 10-20 of prescriptions are for controlled
substances.
Inland Empire Health Plan
IEHP Plan is a joint power agency (a not-for-profit public
entity) established in 1994 to be the local initiative
Medi-Cal managed care plan for Riverside and San Bernardino
Counties. IEHP has enrollment of roughly 400,000
individuals in Healthy Families, Healthy Kids, Medicare and
Medi-Cal. Approximately 86 percent of its enrollees are in
Medi-Cal.
Current pilot programs
The California Public Employees' Retirement System, or
CalPERS, reported earlier this month that it joined Anthem
Blue Cross, Blue Shield of California, and Medco Health
Solutions, Inc., to launch the state's largest electronic
prescribing initiative to date. CalPERS indicates the
pilot program will use input from participating physicians
to determine the best ways to employ electronic prescribing
technology in their practices and facilitate use by all
prescribers. Program organizers will track results, such
as the number of identified preventable adverse drug
events, use of electronic prescribing, and generic drug and
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formulary prescribing rates. The program will continue
through December 2009 with results to be reported in 2010.
The Northern Sierra Rural Health Network (NSRHN) is
implementing electronic prescribing through a stand-alone
application funded by the Blue Shield of California
Foundation and CHCF. NSRHN includes hospitals, clinics,
providers and pharmacies, an electronic hub network
(SureScripts-RxHub). The Department of Health Care
Services is sharing Medi-Cal eligibility, formulary
information, and medication histories to participating
NSRHN pilot sites, but is requiring patient consent. An
evaluation of the pilot is being performed by the
University of Arizona on its effect on clinical outcomes,
impact on operational costs, quality, and efficiencies to
both providers and pharmacies, and its benefit to the
Medi-Cal program.
Arguments in support
Reed Elsevier and its division Elsevier, writes in support
that it believes this bill will help reduce Medi-Cal fraud
and overall prescription costs, while at the same time
increasing the quality of health care. Elsevier is a
provider of scientific, technical, and medical information
and tools for the health and science communities, including
an electronic prescribing program.
Elsevier states it has experience in ensuring that the
accurate flow of data for health care providers, which both
helps patients and saves costs. Elsevier indicates its
experience was honed in providing clinical support and
e-prescribing capabilities in Florida, Mississippi, and
Louisiana. Elsevier argues these states allow providers to
analyze each patient's prescription utilization by
providing immediate information to the provider before a
new electronic prescription is authorized. By adopting a
similar pilot, Elsevier argues IEHP will realize reduced
medical errors while also preventing fraud and eliminating
patient behaviors that undermine their care. Elsevier
states the pilot program established through this bill
would allow the IEHP to determine the qualified vendor to
meet the requirements of the pilot program and also to meet
the requirements to qualify for federal economic stimulus
grant funds. Additionally, Elsevier argues this bill will
help the State of California explore types of e-prescribing
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that will work for health plans and provide data on the
types of savings that can be found through the utilization
of these programs.
IEHP indicates it supports this bill to facilitate the
implementation of electronic prescribing as an important
first step to physicians becoming fully electronic in their
offices, and as a positive step in avoiding medication
errors and providing cost-effective medication options.
IEHP indicates the most important issue remaining is to
secure funding from the federal government to cover both
its costs and the costs of implementation in physician
offices, including equipment, training, support,
connectivity and any electronic prescribing transaction
costs, and has suggested amendments to the author on these
points.
Prior legislation.
ABX1 1 (N??ez) of 2007 would have required, on or before
January 1, 2012, every licensed prescriber, prescriber's
authorized agent, or pharmacy operating in California to
have the ability to transmit and receive prescriptions by
electronic data transmission. The Bureau of Naturopathic
Medicine, the Dental Board of California, the Osteopathic
Medical Board of California, the Board of Registered
Nursing, and the Physician Assistant Committee would have
been required, with the California State Board of Pharmacy,
to ensure compliance by the January 1, 2012, date and those
boards would have been specifically charged with the
enforcement with respect to their respective licensees.
ABX1 1 would also have prohibited electronic prescribing
from interfering with a patient's existing freedom to
choose a pharmacy, and from interfering with the
prescribing decision at the point of care. ABX1 1 also
would have required every electronic prescription system to
meet specified requirements relating to standards for data
exchange, applicable state and federal confidentiality and
data security requirements, and applicable state record
retention and reporting requirements. Finally, ABX1 1
would have required a prescriber or prescriber's authorized
agent using an electronic prescription system to offer
patients a written receipt of the information that has been
transmitted electronically to the pharmacy, and the receipt
would have been required to include the patient's name, the
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dosage and drug prescribed, the name of the pharmacy where
the electronic prescription was sent, and a disclosure
specifying that the receipt cannot be used as a duplicate
order for the same medicine. ABX1 1 failed passage in the
Senate Health Committee.
PRIOR ACTIONS
Assembly Floor: 78-0
Assembly Business and Professions:15-0
Assembly Health: 17-0
COMMENTS
1.Government role in e-prescribing.
Existing law authorizes electronic prescribing, and at
least one Medi-Cal managed care plan has an electronic
prescribing pilot project. This bill establishes a
three-year regional pilot program through the IEHP. The
approach taken in ABX1 1 was to require every licensed
prescriber, prescriber's authorized agent, or pharmacy
operating in California to be able to transmit and
receive prescriptions by electronic data transmission by
January 1, 2012. However, ABX1 1 was silent on how the
mandate would have been funded. The federal government
has provided financial incentives for adoption of
electronic medical records and electronic prescribing.
What is the appropriate role for government in
incentivizing or requiring electronic prescribing?
2.Clarification on formulary.
To ensure the electronic prescribing vendor is not
developing a formulary, but is instead implementing the
formulary of the payor (IEHP), it may be appropriate to
clarify that nothing in this bill authorizes the Program
to establish a formulary.
3.Certification.
This bill requires the Program to be administered by an
entity with certification from CCHIT. CCHIT is a
private, 501(c)3 nonprofit organization that has been
recognized by the federal government as an official
certification body for electronic health records whose
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mission is to accelerate the adoption of interoperable
health information technology by creating a credible,
efficient certification process. CCHIT indicates its
certification requirements are based on widely accepted
industry standards and involve the work of hundreds of
expert volunteers and input from a variety of
stakeholders throughout the health care industry.
CCHIT indicates it does not certify entities but instead
certifies products or services . CCHIT also indicates it
does not currently certify stand-alone electronic
prescribing products but expects to do so later this
year. CCHIT states it certifies ambulatory electronic
health records, which can include electronic prescribing.
Because CCHIT does not currently certify products that
are electronic prescribing only, and to ensure there are
sufficient vendors with products to bid for the Program,
this bill should be amended to permit the use of a
product certified as either a stand-alone electronic
prescribing program, or a program that is certified as
part of an electronic health record program.
4.Definition clarification.
This bill defines "electronic prescribing" as a
prescription or prescription-related information
transmitted between the point of care and the pharmacy
using electronic media. However, existing law defines an
"electronic data transmission prescription" as any
prescription order, other than an electronic image
transmission prescription, that is electronically
transmitted from a licensed prescriber to a pharmacy.
Should the terminology in existing law be used rather
than creating a new definition of electronic prescribing?
5.Penalty exemption language. This bill is placed in the
Pharmacy Law. Under existing law, a person who knowingly
violates any of the provisions of the Pharmacy Law is
guilty of a misdemeanor, if no other penalty is provided.
This bill would provide that, notwithstanding that
penalty provision, a violation of the provisions of this
bill is not a crime. Under the language in this measure,
it is unclear what the sanction would be if a person or
entity failed to meet the requirements of this measure.
6.Code placement. The provisions of this bill are placed
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in the Pharmacy Law in the Business and Professions Code.
Because this bill places requirements on a Medi-Cal
health plan (IHEP), it may be more appropriate to place
its provisions in the Welfare and Institutions Code.
POSITIONS
Support: Reed Elsevier, Inc. (sponsor)
Inland Empire Health Plan
Medical Board of California
Support (prior version):
California Retired Teachers Association (previous
version)
Oppose: None received
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