DEPARTMENT OF HEALTH &. HUMAN SERVICES	  Office of Inspector General 
Washington, D.C.  20201 
OCT  16 2009 
TO:	  Charlene Frizzera 
Acting Administrator 
Centers for Medicare & Medicaid Services 
FROM:  Stuart Wright 
Deputy Inspector General 
for Evaluation and Inspections 
SUBJECT:	  Memorandum Report:  "Medicare Part D Plan Sponsor Electronic Prescribing 
Initiatives," 0 EI-05-08-00322 
This memorandum report describes Medicare Part D plan sponsors' voluntary electronic 
prescribing (e-prescribing) initiatives (hereinafter referred to as initiatives) and implementation 
strategies to promote e-prescribing adoption.  Plan sponsors' initiatives include information 
technology and support services that may help defray prescribers' (e.g., physicians') costs 
associated with e-prescribing adoption.}  While plan sponsors must implement the Centers for 
Medicare & Medicaid Services (CMS) defined e-prescribing standards, prescribers and 
dispensers are not required to adopt or support e-prescribing.  To encourage prescribers to adopt 
e-prescribing, some plan sponsors voluntarily offer e-prescribing technology items and services. 
As such, we provide this memorandum to inform CMS of plan sponsors' efforts to promote 
e-prescribing.  We do not make any assessments about the quality or success of these initiatives. 
We found that plan sponsors have launched voluntary e-prescribing initiatives to increase 
prescriber adoption of e-prescribing.  At the time of our data collection in September 2008, 
approximately 20 percent ofplan sponsors reported that they had an initiative and another 
18 percent reported that they were planning an initiative.  Over half of plan sponsors with an 
initiative reported average or high prescriber participation levels for their initiatives.  Finally, 
75 percent ofplan sponsors with an initiative did not report a quantifiable benefit because they 
did not measure outcomes for their initiative.  The remaining 25 percent ofplan sponsors with an 
initiative reported that they measured a quantifiable benefit.  These plan sponsors most 
commonly reported that their initiative resulted in an increase in generic substitutions and an 
increase in formulary compliance. 
}As of2003, an entry level e-prescribing system may cost up to $4,500 plus approximately $],500 for annual 
support, maintenance, and licensing fees.  The Center for Information Technology Leadership, "The Value of 
Computerized Provider Order Entry:  Executive Preview," 2003.  Available online at 
http://www.citl.org/research/ACPOE Executive Preview.pdf.  Accessed on June 24,2009. 
OEI-05-08-00322  Medicare Part D Plan Sponsor Electronic Prescribing Initiatives  Page 2  Charlene Frizzera 
 
 
In October 2009, the Office of Inspector General (OIG) released a companion report to this 
memorandum, Medicare Part D E-Prescribing Standards:  Early Assessment Shows Partial 
Connectivity (OEI-05-08-00320).  That study assessed plan sponsors implementation of                  
CMS-required e-prescribing standards to support connectivity with prescribers and dispensers 
(e.g., pharmacies).  We found that nearly 80 percent of plan sponsors reported at least partial                          
e-prescribing connectivity but few reported complete connectivity. 
 
BACKGROUND 
 
E-prescribing occurs when a prescriber uses a computer or an electronic hand-held device, such 
as a personal digital assistant, to write and send a prescription directly to a dispenser.  Before a 
prescriber sends a prescription to a dispenser, he or she can request electronic data regarding 
patient eligibility, formulary and benefits, and medication history from the patients health 
insurance plan.   
 
Prescriber access to prescription information, such as medication history and formulary 
information, has several potential benefits.  With access to medication history, prescribers can 
potentially avoid adverse drug events, such as drug-to-drug allergies or interactions.  In addition, 
prescribers can use e-prescribing systems to look up and prescribe lower cost alternative drugs 
listed on a patients formulary.  A 2008 study indicated that, with access to formulary 
information, doctors prescribed less costly medications, leading to an estimated savings of 
$845,000 per 100,000 patients.2 
 
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) 
established the Medicare prescription drug program, known as Medicare Part D, which provides 
optional drug benefits to Medicare beneficiaries.3  CMS contracts with private health insurance 
companies, or plan sponsors, to provide prescription drug coverage for beneficiaries who choose 
to enroll in the program.  Plan sponsors may offer prescription coverage as a stand-alone 
prescription drug plan or as part of a managed care plan.4  As of February 2009, approximately 
26.6 million beneficiaries were enrolled in Medicare Part D.5   
 
The Medicare Part D E-Prescribing Program  
The MMA established the Medicare Part D e-prescribing program.6  For this program, CMS 
requires plan sponsors to implement four e-prescribing standards to provide the technical 
infrastructure that supports interoperable e-prescribing systems.  A standardized technical 
infrastructure enables plan sponsors, prescribers, and dispensers to exchange prescription 
information with each other.  Complete implementation of all four standards is necessary for 
                                                 
2 M. Fischer, et al., Effect of Electronic Prescribing With Formulary Decision Support on Medication Use and 
Cost.  Archives of Internal Medicine, 168 (22), pp. 24332439, 2008. 
3 Title I of the MMA, P.L. No. 108-173; Part D of Title XVIII of the Social Security Act; 42 U.S.C.  1395w-101   
et seq. 
4 MMA, P.L. No. 108-173  101(a); Social Security Act,  1860D-1(a)(1); 42 U.S.C.  1395w-101(a)(1). 
5 CMS, Total Medicare Beneficiaries With Prescription Drug Coverage, 2009.  Available online at 
http://www.cms.hhs.gov/PrescriptionDrugCovGenIn/.  Accessed on February 23, 2009.   
6 MMA, P.L. No. 108-173  101(a); Social Security Act,  1860D-4(e); 42 U.S.C.  1395w-104(e). 
OEI-05-08-00322   Medicare Part D Plan Sponsor Electronic Prescribing Initiatives      Page 3  Charlene Frizzera 
 
 
complete e-prescribing connectivity between plan sponsors, prescribers, and dispensers.  CMS 
required plan sponsors to completely implement two standards by January 2006 and the other 
two standards by April 2009. 
 
Beginning in 2010, plan sponsors will also be required to obtain prescription origin information 
on new prescriptions to monitor the rate of adoption of e-prescribing in Medicare Part D.7  The 
Prescription Origin Code (POC) is a data field that will be populated by the pharmacist to 
describe the method in which a prescription was received by the dispenser (i.e., paper, fax, or 
electronic).  Plan sponsors will obtain the POC data from dispensers and then submit them to 
CMS for inclusion in Medicare Part D prescription drug event (PDE) data. 
 
Plan Sponsor E-Prescribing Initiatives 
While plan sponsors must implement CMS-defined e-prescribing standards, prescribers and 
dispensers are not required to adopt or support e-prescribing.  To encourage prescribers to adopt              
e-prescribing, some plan sponsors offer e-prescribing initiatives, which include a combination of 
technology items and services.   
 
To address plan sponsor donations of e-prescribing items and services, the MMA required that 
OIG establish an e-prescribing safe harbor rule to the antikickback statute, which prohibits 
payment in return for patient referrals.8  The safe harbor rule protects certain low-risk 
arrangements that encourage prescriber adoption of e-prescribing.  It allows plan sponsors, 
among other health care entities, to provide prescribers with nonmonetary remuneration 
including hardware, software, or information technology and training services necessary and 
used solely to receive and transmit electronic prescription information.9  For example, plan 
sponsors can provide hardware, such as a personal digital assistant or computer.  Plan sponsors 
can also provide software that has e-prescribing functionality either as a stand-alone program or 
as part of an electronic medical record.   
 
Plan sponsors may choose to promote e-prescribing by providing prescribers and dispensers with 
financial incentives.10  According to the MMA, payment of financial incentives may take into 
consideration the cost to implement an e-prescribing program and may also be given to 
prescribers that have increased their formulary compliance, lowered drug costs, or reduced 
potential drug interactions.11   
 
Plan sponsors financial incentives may include pay-to-participate, pay-for-performance, and               
pay-per-transaction incentives.  Pay-to-participate incentives are one-time grants given to 
prescribers to assist with startup costs.  Pay-for-performance incentives are bonuses paid to 
prescribers for meeting specified e-prescribing metrics or outcomes.  Pay-per-transaction 
incentives are bonuses given to prescribers every time they e-prescribe.   
 
                                                 
7 CMS, Issuance of the 2010 Call Letter, 2009.  Available online at 
http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/2010CallLetter.pdf.  Accessed on July 9, 2009. 
8 MMA, P.L. No. 108-173  101(a); Social Security Act,  1860D-4(e)(6); 42 CFR  1001.952(x).   
9 42 CFR  1001.952(x).   
10 MMA, P.L. No. 108-173  102(b); Social Security Act,  1852(j)(7); 42 U.S.C. 1395w-22(j)(7). 
11 Ibid. 
OEI-05-08-00322   Medicare Part D Plan Sponsor Electronic Prescribing Initiatives      Page 4  Charlene Frizzera 
 
 
The Medicare Improvements for Patients and Providers Act of 2008  
In other efforts to promote e-prescribing, the Medicare Improvements for Patients and Providers 
Act of 2008 (MIPPA) stipulates that CMS offer financial incentives directly to prescribers.  To 
receive these incentive payments, CMS requires prescribers to meet specified e-prescribing 
quality measures.12  Financial incentives are available beginning in 2009 and will continue 
through 2013.13   
 
METHODOLOGY 
 
Scope 
This memorandum report describes plan sponsors e-prescribing initiatives and implementation 
strategies to promote e-prescribing adoption.  It does not include information or results from the 
Medicare e-prescribing incentive program. 
 
Data Collection and Analysis 
Between August and September 2008, we conducted an electronic survey of all plan year 2008 
plan sponsors.  We surveyed a total of 278 plan sponsors and received responses from 206 plan 
sponsors for a 74-percent response rate.  We identified plan sponsors using July 2008 Part D plan 
sponsor data from CMSs Health Plan Management System. 
 
The surveys gathered descriptive information about plan sponsors initiatives.  We asked plan 
sponsors if they had or were planning an initiative to promote prescriber adoption of                   
e-prescribing and to describe their initiatives.  We defined an initiative as a plan sponsor program 
designed to promote e-prescribing that includes any combination of e-prescribing technology 
items or services.  We also asked plan sponsors to describe anything else they offered as part of 
their initiatives.  We refer to the combination of these elements as an initiative package in this 
memorandum report.   
 
We also asked plan sponsors about any quantifiable benefits that resulted from their initiatives.  
We requested evidence of the claimed benefits when plan sponsors reported quantifiable benefits 
resulting from their initiatives.  If the plan sponsor could not provide evidence or we could not 
verify the benefits, we excluded those claimed benefits from our analysis.   
 
To determine prescriber participation in initiatives, we asked plan sponsors to report whether 
they had low, average, or high participation in their initiatives.  The categorization of low, 
average, or high participation is based on the plan sponsors perception.  We also asked them to 
provide the specific number of prescribers participating in their initiatives. 
 
To analyze participation in plan sponsor initiatives, we categorized plan sponsors into three 
categories based on the number of beneficiaries they covered.  We did this because participation 
levels for initiatives are relative to a plan sponsors size.  Table 1 shows the beneficiary ranges 
we used to categorize plan sponsors. 
                                                 
12 MIPPA  132, P.L. 110-275; Social Security Act,  1848(m)(3); 42 U.S.C.  1395w-4(m)(3); 73 Fed. Reg. 69726, 
69847 (Nov. 19, 2008). 
13 Ibid. 
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Table 1:  Plan Sponsor Size Categories  
Plan Sponsor Size Category  Number of Beneficiaries Covered by Plan Sponsor 
Small  110,000 
Medium  10,001500,000 
Large  500,000 + 
Source:  OIG analysis of Part D plan sponsor enrollment data, 2009. 
 
We also used survey data from a companion study, Medicare Part D E-Prescribing Standards:  
Early Assessment Shows Partial Connectivity (OEI-05-08-00320), that we collected 
simultaneously with data for this memorandum report.  We have data from the previous study for 
194 of the 206 respondents for this memorandum report.  For these 194 plan sponsors we 
assessed whether plan sponsors with an initiative also reported implementation of the CMS       
e-prescribing standards. 
 
Finally, we conducted structured in-person interviews with four plan sponsors that had                        
well-developed initiatives.  We selected these plan sponsors based on their survey responses.  
We defined well-developed initiatives based on the duration of the initiative and the number of 
participating prescribers.  In the interviews, plan sponsors described their initiatives and the 
benefits and challenges they experienced. 
 
Limitations  
This report relies on self-reported data.  Other than plan sponsors reported quantifiable benefits, 
we did not verify plan sponsors responses. 
 
Standards  
This study was conducted in accordance with the Quality Standards for Inspections approved 
by the Council of the Inspectors General on Integrity and Efficiency. 
 
RESULTS 
  
Approximately 20 percent of plan sponsors have voluntary e-prescribing initiatives, which 
most commonly include the provision of training and software 
Twenty-one percent of plan sponsors (44 plan sponsors) reported that they have an initiative to 
promote prescriber adoption of e-prescribing.  Another 18 percent of plan sponsors (36 plan 
sponsors) reported that they were planning to offer an initiative.  Initiatives consist of any 
combination of free or discounted software, hardware, Internet connectivity, financial incentives, 
and educational materials (e.g., newsletters).   
 
Although plan sponsors most commonly provide training and software, there is no prevailing 
model for an initiative.  Among the 44 plan sponsors with an initiative, there were 20 different 
initiative packages.  Initiative packages most commonly included one to three different elements, 
but some had up to six different elements, such as hardware, software, training, and financial 
incentives.     
 
OEI-05-08-00322   Medicare Part D Plan Sponsor Electronic Prescribing Initiatives      Page 6  Charlene Frizzera 
 
 
Despite the variety of initiative packages, two-thirds of plan sponsor initiative packages (29 plan 
sponsors) included a basic package of free or discounted training and software.  Over half of 
planned initiatives (21 plan sponsors) will also include a basic package of training and software.                
Chart 1 shows the number and type of elements plan sponsors currently offer or plan to offer in 
their initiatives.  
 
Chart 1.  
70
Elements 
of Plan  s 60
r
Sponsor  o
s
Initiatives  n 50
o
  p
S
n  40
a
Pl Plan to
of  30 provide
r  Currently
e 20
b provide
m
u
N 10
0
Software Hardware Internet Training Financial Educational
Connectivity Incentives Materials
Initiative Elements
 Source:  OIG analysis of survey data, 2009. 
 
Additional patterns emerged among plan sponsors initiative packages.  The most frequent 
initiative package, offered by eight plan sponsors, includes training, software, and hardware.  
These are some of the most basic elements required to e-prescribe.  If a prescriber already had 
Internet connectivity, these items and services would be sufficient for a prescriber to start                
e-prescribing.   
 
Sixteen plan sponsors with an initiative reported that they currently offer prescribers a financial 
incentive for e-prescribing.  Thirteen of these plan sponsors reported offering                                  
pay-for-performance financial incentives to prescribers.  Seven plan sponsors reported offering 
prescribers a combination of financial incentives.  For example, some plan sponsors provided 
prescribers both pay-to-participate and pay-for performance incentives.   
 
Almost all plan sponsors with an initiative reported implementing some of the technical 
infrastructure to support e-prescribing but only one reported complete implementation.  Almost 
all plan sponsors with an initiative (36 plan sponsors) reported implementing at least some of the 
standards that support the technical infrastructure to deliver e-prescribing information, such as 
medication history, eligibility, and formulary information to prescribers.  Of the remaining eight 
plan sponsors with an initiative, four reported that they had not implemented any of the standards 
that support the technical infrastructure for e-prescribing and four did not provide information 
about their implementation.    
 
OEI-05-08-00322   Medicare Part D Plan Sponsor Electronic Prescribing Initiatives      Page 7  Charlene Frizzera 
 
 
Among the 36 plan sponsors that reported some implementation, one plan sponsor reported 
completely implementing all of the standards that support e-prescribing.  The other 35 plan 
sponsors with initiatives have not completely implemented all of the standards that support                 
e-prescribing.   
 
Plan sponsors that have not completely implemented the four CMS-defined e-prescribing 
standards do not completely support the technical infrastructure required for interoperable             
e-prescribing systems.  Plan sponsors e-prescribing systems must be interoperable to maximize 
e-prescribing benefits.  Plan sponsor systems that are not fully compliant with all e-prescribing 
standards limit the types of e-prescribing information available to prescribers.   
 
For more detail about plan sponsors implementation of e-prescribing standards, see OIGs 
companion report, Medicare Part D E-Prescribing Standards:  Early Assessment Shows Partial 
Connectivity (OEI-05-08-00320).     
 
Over half of plan sponsors with an initiative reported average or high prescriber 
participation in their initiatives   
Twenty-seven plan sponsors with an initiative reported average or high levels of prescriber 
participation in their initiatives.  Small plan sponsors reported high prescriber participation more 
often than medium or large plan sponsors.  This may be because small plan sponsors interact 
with fewer prescribers.  Small plan sponsors can more easily reach their entire network of 
prescribers compared to medium and large plan sponsors.  Plan sponsors reported participation 
ranging from 4 to 13,000 prescribers. 
 
Some plan sponsors attributed their high levels of prescriber participation to implementation 
strategies that they used to promote their initiatives.  Some plan sponsors reported using 
implementation strategies to reach more prescribers, including creating mandates for staff 
physicians to use e-prescribing technology, tying other quality bonuses to e-prescribing, 
extending a financial incentive to pharmacies, and partnering with other health care 
organizations.  In structured interviews, three plan sponsors with high prescriber participation 
described their strategic approaches. 
 
Sierra Health Services 
Sierra Health Services (Sierra) offered all Nevada prescribers free, stand-alone               
e-prescribing software as part of its initiative to promote the adoption of e-prescribing.  
Only prescribers that were part of a large medical group owned by Sierra, Southwest 
Medical Associates (SMA), took advantage of the initiative.  However, even with free 
software, SMA prescribers were slow to adopt e-prescribing.   
 
SMA increased e-prescribing in its practice by making two changes.  First, SMA 
integrated e-prescribing into its electronic health record system.  Second, SMA changed 
its prescriber bonus structure so that only prescribers who were 100-percent compliant 
with SMAs e-prescribing program were eligible for bonuses.  Within 1 month of this 
change, the number of e-prescriptions went from 0 to 80,000.  As of September 2008, 
almost all prescriptions generated by SMA were electronic.   
 
OEI-05-08-00322   Medicare Part D Plan Sponsor Electronic Prescribing Initiatives      Page 8  Charlene Frizzera 
 
 
Blue Cross Blue Shield of Massachusetts  
Blue Cross Blue Shield of Massachusetts (BCBS-MA) is a founding member of the    
eRx Collaborative (Collaborative), a collaboration of three local health plans in 
Massachusetts.14  The Collaboratives initiative to promote the adoption of e-prescribing 
includes free stand-alone software, hardware, Internet connectivity, and staff training.  
BCBS-MA also offers its prescribers financial incentives based on e-prescribing use.   
 
The Collaborative rolled out its e-prescribing initiative in two phases.  First, the 
Collaborative targeted high-volume and specialty prescribers (e.g., an allergist).  The 
Collaborative found that more high-volume prescribers adopted e-prescribing than 
specialty prescribers.  Specialty prescribers were less likely to adopt e-prescribing 
because they did not see patients regularly.  Second, the Collaborative offered its 
initiative to any interested prescriber in Massachusetts.   
 
The Collaborative also invited two e-prescribing software vendors to help recruit 
prescribers to adopt e-prescribing.  Because e-prescribing was a relatively new 
technology, software vendors gave in-office demonstrations and explained the features 
and benefits of e-prescribing.  The Collaborative found this approach successful in 
recruiting prescribers to adopt e-prescribing. 
 
Since 2003, the Collaboratives initiative has assisted more than 6,000 prescribers to 
adopt e-prescribing.  In 2008, Collaborative prescribers transmitted more than 4 million 
electronic prescriptions.  Collaborative prescribers have transmitted 17.8 million 
electronic prescriptions between 2003 and 2008. 
 
Within the BCBS-MA provider network, approximately 13 percent of prescriptions in 
2008 were electronic prescriptions, up from 5 percent in 2005.  To further promote           
e-prescribing adoption, BCBS-MA announced that beginning in 2011, prescribers must  
e-prescribe to participate in any BCBS-MA physician incentive program. 
 
Blue Cross Blue Shield of North Carolina   
To extend its initiatives reach, Blue Cross Blue Shield of North Carolina (BCBS-NC) 
partnered with a large medical group and the Community Care Network of North 
Carolina (CCN).  CCN is an affiliation of medical group practices that includes 
physicians and pharmacists.  BCBS-NCs initiative includes free Web-based                          
e-prescribing software, discounted hardware, Internet connectivity, training, and financial 
incentives.   
 
BCBS-NC also extended a one-time financial incentive for pharmacies to update their 
computer systems.  BCBS-NC found that some prescribers stopped e-prescribing because 
pharmacies were not equipped to accept electronic prescriptions.  BCBS-NC found that 
pharmacies were receptive to the financial incentive, which led to an increase in the 
number of pharmacies connected for e-prescribing.  BCBS-NC reported that its efforts 
encouraged approximately 2,500 prescribers to e-prescribe in 2008.   
                                                 
14 The Collaborative was formed in 2003, before the creation of Medicare Part D plan sponsors. 
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Seventy-five percent of plan sponsors with an initiative could not report the quantifiable 
benefits of their initiatives because they did not measure outcomes 
Thirty-three plan sponsors could not report any quantifiable benefits from their initiatives 
because they did not measure the outcomes of their initiatives.  Plan sponsors initiatives are 
voluntary and there are no requirements to report outcomes.  However, measuring the outcomes 
of e-prescribing is the only way to determine whether e-prescribing leads to lower costs and 
improved quality.  Possible outcome measures may include increased generic substitution, 
increased formulary compliance, or decreased medication errors.   
 
Some plan sponsors reported that they did not measure outcomes because e-prescribing data 
were not readily available, which hindered their ability to measure the impact of their initiatives.  
Specifically, some plan sponsors reported that they do not have adequate data because their 
metrics are under development or their prescription volume is too low to measure outcomes.  In 
structured interviews, two plan sponsors described obstacles to obtaining e-prescribing data and 
measuring outcomes. 
 
BCBS-NC 
BCBS-NC reported difficulty obtaining e-prescribing data because prescribers 
participating in its initiative used different e-prescribing software platforms.  Initially, 
BCBS-NC partnered with three e-prescribing vendors to offer e-prescribing software to 
prescribers.  Limiting the vendor options helped BCBS-NC track e-prescribing volume 
because it only had to collect data from three vendors.   
 
In 2008, BCBS-NC pursued a vendor-neutral strategy so prescribers would have a wider 
choice of e-prescribing software.  With so many vendors, BCBS-NC tried to obtain              
e-prescribing data from a single source, RxHub,15 but the data were incomplete and 
inconsistent.  Vendors have to undergo certification with RxHub to properly transmit                   
e-prescribing data for reporting purposes, but BCBS-NC found that not all vendors had 
undergone certification.  As a result, BCBS-NC had to coordinate data collection from 
multiple vendors and then manually aggregate the data.  It had to contact several vendors 
for data and did not consistently receive data in a timely fashion.   
 
Inconsistent and incomplete e-prescribing data created two problems for BCBS-NC.  
First, BCBS-NC had trouble quantifying its e-prescribing benefits.  BCBS-NC found that 
when data were collected from multiple vendors, the reporting of potentially avoided 
drug-drug allergy interactions was not consistent.  The vendors often did not capture all 
of this information and many times were not able to report the number of prescription 
changes or cancellations that occurred as a result of the e-prescribing transaction.  
Second, inaccurate e-prescribing data complicated BCBS-NCs ability to track 
prescribers who were eligible to receive financial incentives.  BCBS-NC rewarded 
prescribers with a $1,000 bonus for viewing the medication history of 20 patients.  
Because of difficulty acquiring accurate data, BCBS-NC modified the financial incentive 
by rewarding prescribers that e-prescribed for 20 patients. 
                                                 
15 E-prescribing software systems query RxHub for medication history and formulary and benefits information from 
plan sponsors. 
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Medco Health Solutions 
Medco Health Solutions (Medco) also reported problems obtaining e-prescribing data and 
measuring initiative outcomes.  Prescribers participating in Medcos Southeast Michigan             
E-Prescribing Initiative (SEMI) can choose software from several e-prescribing software 
vendors.  Similar to BCBS-NC, Medco had to pursue several vendors for e-prescribing 
data.  Medco could not aggregate the e-prescribing data because the software vendors did 
not have a uniform way to report e-prescribing information.  Without consistent and 
complete e-prescribing data, Medco reported difficulty quantifying benefits of SEMI.  
Medco reported that pharmacy use of the POC would greatly improve its ability to track 
e-prescribing volume and benefits.   
 
In the future, e-prescribing data may be more widely usable if pharmacies populate the POC 
field.  With accurate POC data, CMS and plan sponsors could get e-prescribing volume data 
from PDE data.  The accuracy of the POC data depends on accurate pharmacy entry, which may 
be complicated by some pharmacy operations.  For example, if an electronic prescription is 
transferred from one pharmacy to another, the second pharmacy may not recognize it as an 
electronic prescription and enter the wrong code in the POC field.  Any inaccuracies in the POC 
data may affect CMSs ability to track e-prescribing. 
 
Twenty-five percent of plan sponsors with an initiative reported that they measured for and saw 
a quantifiable benefit.  These 11 plan sponsors reported that they were able to track e-prescribing 
volume and use the data to assess the impact of their initiative.  Eight plan sponsors reported an 
increase in generic substitutions and an increase in formulary compliance.  Five plan sponsors 
reported a decrease in medication errors as measured by the number of prescriptions changed 
because of medication alerts.  Two plan sponsors also reported cost savings from their initiatives. 
 
CONCLUSION 
 
Some plan sponsors have launched voluntary e-prescribing initiatives to increase prescriber 
adoption of e-prescribing.  As of September 2008, approximately 20 percent of plan sponsors 
had an initiative and an additional 18 percent were planning an initiative.  Although the 
composition of plan sponsors initiatives varied, most offered free or discounted software and 
training.  Despite efforts to promote e-prescribing, not all plan sponsors with initiatives have 
completely implemented e-prescribing standards, which may limit e-prescribing benefits.   
 
Over half of plan sponsors with an initiative reported average or high prescriber participation 
levels for their initiatives.  Some plan sponsors attributed their high levels of participation to 
implementation strategies they used to promote their initiatives.  Some of these additional 
strategies include creating mandates for staff physicians to use e-prescribing technology, tying 
other quality bonuses to e-prescribing, extending a financial incentive to pharmacies, and 
partnering with other health care organizations to reach more prescribers.   
 
Most plan sponsors were unable to measure outcomes for their initiatives.  Three-quarters of plan 
sponsors with an initiative could not report a quantifiable benefit because they did not measure 
outcomes for their initiatives.  Plan sponsors that were able to measure outcomes from their 
initiatives reported an increase in generic substitution and formulary compliance.   
OEI-05-08-00322   Medicare Part D Plan Sponsor Electronic Prescribing Initiatives      Page 11  Charlene Frizzera 
 
 
This report is being issued directly in final form because it contains no recommendations.  If you 
have comments or questions about this report, please provide them within 60 days.  Please refer to 
report OEI-05-08-00322 in all correspondence. 
OEI-05-08-00322   Medicare Part D Plan Sponsor Electronic Prescribing Initiatives