BILL ANALYSIS
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|Hearing Date:July 6, 2009 |Bill No:AB |
| |718 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 718Author:Emmerson
As Amended:June 30 16 , 2009 Fiscal:Yes
SUBJECT: Inland Empire Health Plan E-Prescribing Pilot Program.
SUMMARY: Creates a pilot program in the Inland Empire Health Plan for
electronic prescribing until January 1, 2013.
NOTE: This measure was heard in the Senate Committee on Health on
June 24, and passed on a 11 to 0 vote.
Existing law:
1)Provides for the practice of pharmacy and the licensing and
regulation of pharmacies, and pharmacists by the Board of Pharmacy
within the Department of Consumer Affairs.
2)Prohibits dangerous drugs or devices from being sold or furnished
without a prescription, and defines a "prescription" as an oral,
written, or electronic transmission order issued by licensed
prescribers, as specified. Further defines electronic transmission
prescription as both image and data prescriptions; electronic image
transmission prescription as any prescription order for which a
facsimile of the order is received by a pharmacy from a licensed
prescriber; 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.
3)Requires an electronic data transmission prescription to be filled
by, or under the direction of, a pharmacist.
4)Provides that it is the intention of the Legislature that
pharmacies in this state have the ability to adopt new
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technologies involving the electronic transmission of
prescriptions to reduce the occurrence of dispensing errors and
to improve service to California.
5)Article One of the California Constitution guarantees the right
to privacy .
This bill:
1)Creates the Inland Empire Health Plan E-Prescribing Pilot Program
(Program) until January 1,2013.
2)Defines electronic prescribing in the Program as a prescription or
prescription-related
information transmitted between the point of care and the pharmacy
using electronic media.
3)Requires the Program to be administered by an entity with
certification from the CertificationCommission for Healthcare
Information.
4)Requires the Inland Empire Health Plan to select an administering
entity through a competitivebid process.
5)Requires the Program to comply with state and federal
confidentiality and data security
requirements.
6)Clarifies patient freedom to select a pharmacy.
7)Requires the Program administering entity to provide a report to the
Legislature on or beforeJanuary 1, 2012
FISCAL EFFECT: Unknown. According to the Author, the intent is to
utilize federal stimulus money to implement the program.
COMMENTS:
1.Purpose. The s S ponsor of this measure is Reed Elsevier . According
to the Author, " an electronic prescribing system in California would
add new dimensions of safety and efficiency to the practices of
medicine and pharmacy. Electronically created and transmitted
prescriptions would streamline the prescribing process and enhance
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communication among health care professionals while maintaining safe
and high quality services. Moreover, electronically created and
transmitted prescriptions can reduce or eliminate errors both at 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. Besides enhanced efficiency and safety, there are
many benefits that electronic prescriptions would provide. For
instance, physicians will know which pharmacy a prescription has
been sent and track whether the patient has picked it up. This will
offer opportunities for physicians and pharmacists to better ensure
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. "
2.Background. Electronic prescribing is lauded as a key component in
the future of health care. Efforts have been underway at the state
and federal level to modernize systems while enhancing the quality
of care, raising levels of patient safety and realizing cost
savings. In 2004, the President announced a plan to ensure that
electronic health records are available to most Americans by 2014 ,
and key components of the recently enacted American Reinvestment and
Recovery Act (ARRA) are designed to promote the expansion of health
information technology initiatives. Streamlining the practice of
medicine to be more efficient through tools such as electronic
prescribing and electronic health care records has the potential to,
among other benefits, minimize dangerous prescription errors.
In November of 1999, the Institute of Medicine (IOM) released a
report, "To Err is Human: Building a Safer Health System," which
found that approximately 7,000 hospital patients die annually across
the country from preventable medication-related errors. The IOM
report found that 2 out of every 100 hospital patients will die or
be injured as a result of preventable medication errors, and that
each medication error increases the cost of a hospital stay by an
average of $4,700.
A white paper from the Institute for Safe Medications Practices
(ISMP) called for the elimination of handwritten prescriptions
within 3 years. The ISMP paper stated that the health care industry
has been slow to adopt new technologies, and that prescription
writing is perhaps the most important paper transaction remaining in
our increasingly digital society. Previous hurdle s d to
modernization seem to be phasing out, as doctors more frequently
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utilize computers personal digital assistants (PDAs) and the
hardware and software that will allow for electronic prescribing are
more readily available.
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.
3.ARRA Modernization Monies. The recently enacted federal stimulus
allocates close to
$36 billion to encourage the adoption of health information
technology. Of that, approximately $34 billion will fund 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 (HHS) 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 , 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.
4.Experience in Other States. California, home to Silicon Valley and
a myriad companies creating cutting edge technology, rests lags
behind many other states in its advancement of electronic
prescribing policies. According to a recent report from the Office
of the Inspector General at HHS, five state Medicaid agencies have
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implemented electronic prescribing initiatives, including Florida,
Kansas, Mississippi, Missouri and Tennessee and 21 other states have
similarly planned initiatives in the works. Medicaid directors in
these states credit these programs with meeting certain goals,
including avoiding adverse events due to drug interactions or
errors.
Florida and Mississippi have given personal data assistants (PDAs)
to participating providers, enabling them to perform such actions as
viewing patient medication history, sending prescriptions to
pharmacies and being alerted of potentially adverse drug
interactions.
Mississippi estimates that its program costs the state about $35,000
per month, but has saved around $1.2 million per month in
prescription drug costs and nearly $27,000 per month in foregone
hospitalizations. Florida documented savings of $40 per patient per
month in 2006, for a total savings to Medicaid of $25 million.
5.Privacy. The State Constitution guarantees Californians' basic
privacy rights. According to a recent report from the Office of the
Inspector General at HHS, State Medicaid directors report that
developing security and privacy policies has been a challenge in
implementing health information technology initiatives like
electronic records. Specifically, notifying beneficiaries about how
their information will be used and developing procedures to handle
sensitive data, such as mental health, substance abuse, and HIV/AIDS
information, often rests as a barrier to expanded use of these
technologies. ( This bill states that the program must be consistent
with, but not limited to, State and Federal confidentiality and data
security requirements.)
6.Previous Legislation.
AB 1298 (Jones, Chapter 699, Statutes of 2007) The bill sought to
protect the privacy of personally identifiable unencrypted medical
and health insurance information by requiring any state agency or
business that operates in California to inform any potentially
affected state resident of the loss of that individual's health
information. The bill also prohibited any organization that holds
electronic personal health record data from disclosing that
information without patient consent.
AB 2516 (Mendoza, 2008) This bill required a doctor to ensure that
any prescription he or she makes be electronically transmitted to a
patient's pharmacy of choice. The measure was never heard in policy
AB 718
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committee.
ABX1 (Nunez, 2007) Required by January 1, 2012 all prescribers,
prescribers' agents, and pharmacies, have ability to transmit and
receive e-prescriptions, and given licensing boards the authority to
enforce this requirement. The measure failed passage in the Senate
Committee on Health.
7.Arguments in Support. The S ponsor, Reed Elsevier states that the
efforts set forth in
AB 718 will help the state explore electronic prescribing that works
for health plans and provides cost savings. The Sponsor notes that
they believe AB 718 "sets up a timely, needed program to allow the
State of California to use its health care dollars wisely and also
help consumers obtain a higher quality of care through
state-of-the-art-technology."
The California Retired Teachers Association appreciates the health
care cost containment the bill provides.
Both the Inland Empire Health Plan and the Medical Board of
California believe this bill will enhance consumer protection by
preventing medical errors and Inland Empire Health Plan also notes
that the measure provides cost effective options.
6.Policy Issue : Who Is Eligible To Bid? The measure specifies that
Inland Empire Health Plan will select a program administrator
through a competitive bid process and clarifies that the
administrator must also be certified by the Certification Commission
for Healthcare Information Technology (CCHIT). CCHIT is a private,
nonprofit organization with the stated public mission of
accelerating the adoption of viable, interoperable health
information technology (IT) by creating a credible and efficient
certification process. CCHIT certification designates that a health
IT product has been tested for functionality, interoperability and
security and has passed inspection of 100 percent of the criteria.
There is currently not a free-standing electronic prescribing
certification offered by CCHIT today. The CCHIT draft
certification policy and procedures are currently being reviewed and
evaluated by the Federal Health Information Technology Standards
Committee. While ARRA does not explicitly endorse CCHIT as a
certifying body, the law says that, in consultation with the
Director of the National Institute for Standards and Technology
(NIST), the National Coordinator for Health IT shall keep or
recognize a program or programs for the voluntary certification of
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health IT as being in compliance with applicable certification
criteria developed.
The Sp onsor, Reed Elsevier, is the parent company of Elsevier, a
provider of scientific, technical, and medical information and tools
for the health and science communities, including eMPOWERx, a
wireless system for medical records that has electronic prescribing
capabilities. eMPOWERx is currently used in Mississippi. Elsevier
does not yet have CCHIT certification. As such, it is one entity
that may meet the requisite criteria to bid as an administrator of
the program. Other vendors that supply services or products related
to electronic prescribing include, but are not limited to:
AllScripts; Dr. First; ZIX Corp; RxNT; CVS iScribe; Relay Health;
Med Plus.
The Committee Rrecommended Amendments: Aamending the bill so as not
to limit the number of eligible companies and ensure that a robust
group of vendors with electronic prescribing products are eligible
to bid.
On page 2, line 8, after "Information" insert:
or another certifying body authorized by the federal Department of
Health and Human Services
7.Previous Legislation.
AB 1298 (Jones, Chapter 699, Statutes of 2007) The bill sought to
protect the privacy of personally identifiable unencrypted medical
and health insurance information by requiring any state agency or
business that operates in California to inform any potentially
affected state resident of the loss of that individual's health
information. The bill also prohibited any organization that holds
electronic personal health record data from disclosing that
information without patient consent.
AB 2516 (Mendoza, 2008) This bill required a doctor to ensure that
any prescription he or she makes be electronically transmitted to a
patient's pharmacy of choice. The measure was never heard in policy
committee.
ABX1 (Nunez, 2007) Required by January 1, 2012 all prescribers,
prescribers' agents, and pharmacies, have ability to transmit and
receive e-prescriptions, and given licensing boards the authority to
AB 718
Page 8
enforce this requirement. The measure failed passage in the Senate
Committee on Health.
8.Arguments in Support. The Sponsor, Reed Elsevier states that the
efforts set forth in AB 718 will help the state explore electronic
prescribing that works for health plans and provides cost savings.
The Sponsor notes that they believe AB 718 "sets up a timely, needed
program to allow the State of California to use its health care
dollars wisely and also help consumers obtain a higher quality of
care through state-of-the-art-technology."
The California Retired Teachers Association appreciates the health
care cost containment the bill provides.
Both the Inland Empire Health Plan and the Medical Board of
California believe this bill will enhance consumer protection by
preventing medical errors and Inland Empire Health Plan also notes
that the measure provides cost effective options.
NOTE: This measure was heard in the Senate Committee on Health on
June 24 and passed on a 11-0 vote.
SUPPORT AND OPPOSITION:
Support:
Reed Elsevier (Sponsor)
California Retired Teachers Association
Inland Empire Health Plan
Medical Board of California
Opposition:
None on file as of June 30, 2009.
Consultant:Sarah Mason
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