(1) Patient safety is an important issue and a 
priority among patients, providers, insurers, busi-
nesses, and government entities alike. 
(2) Adverse drug events are defined by the In-
stitute of Medicine as ‘‘any injury due to medica-
tion’’. 
(3) According to the Institute of Medicine, more 
then 1.5 million preventable adverse drug events 
occur every year in the United States. 
(4) Studies indicate that at least 530,000 pre-
ventable adverse drug events occur each year among 
the Medicare population, and cost the Federal Gov-
ernment upwards of $887,000,000, or $1,983 per 
person. 
(5) Electronic prescription drug programs, or e- 
prescribing, provide for the electronic transmittal of 
prescription information from the prescribing health 
care provider to the dispensing pharmacy and phar-
macist. 
(6) Electronic prescribing provides formulary 
and coverage information before a prescription is 
written to better inform the patient and prescriber 
of lower cost options, including generics. 
(7) E-prescribing can help to eliminate medical 
errors, injuries, hospitalizations, and even death that 
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can result from illegible prescriptions and bad drug 
interactions, in addition to reducing patient medica-
tion non-adherence. 
(8) The Institute of Medicine recommends that 
all physicians create a plan to implement and use e- 
prescribing technology by 2010. 
SEC. 3. INCENTIVES FOR USE OF E-PRESCRIBING UNDER 
MEDICARE. 
(a) BONUS PAYMENTS.—Section 1833 of the Social 
Security Act (42 U.S.C. 1395l) is amended by adding at 
the end the following new subsection: 
‘‘(v) INCENTIVE PAYMENTS FOR PHYSICIAN USE OF 
E-PRESCRIBING.— 
‘‘(1) ONE-TIME BONUS FOR START-UP COSTS.— 
‘‘(A) IN GENERAL.—If the Secretary deter-
mines, based upon coding in claims submitted 
under this part over a duration specified by the 
Secretary, that a physician meets a threshold 
volume or proportion (as specified by the Sec-
retary) of claims for physicians’ services for in-
dividuals enrolled under this part that— 
‘‘(i) are classified (under section 
1848) as evaluation and management serv-
ices; 
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‘‘(ii) include the making of a prescrip-
tion that could under law be made using 
the electronic prescription drug program; 
and 
‘‘(iii) use the electronic prescription 
drug program for such prescription, 
the Secretary shall make a payment to the phy-
sician, in addition to any other payment under 
this part, of the amount specified in subpara-
graph (B). Not more than one payment may be 
made under this subsection with respect to any 
physician. 
‘‘(B) AMOUNT.—The payment amount 
under subparagraph (A) shall be, in the case of 
a physician that meets the conditions of sub-
paragraph (A) for a period that begins dur-
ing— 
‘‘(i) 2008 or 2009, $2,000; 
‘‘(ii) 2010 or 2011, $1,500; or 
‘‘(iii) 2012 or a subsequent year, 
$1,000. 
‘‘(2) ON-GOING
BONUS
FOR
USE
OF
E-PRE-
SCRIBING.— 
‘‘(A) IN GENERAL.—If the Secretary deter-
mines, based upon coding in claims submitted 
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under this part over a period specified by the 
Secretary, that a physician uses the electronic 
prescription drug program for prescribing at 
least a threshold volume or proportion (as spec-
ified by the Secretary) of claims for physicians’ 
services for individuals enrolled under this part, 
in addition to the amount of payment that 
would otherwise be made under this part for 
physicians’ services by the physician that are 
classified as evaluation and management serv-
ices under section 1848, there also shall be paid 
to the physician an amount equal to 1 percent 
of the allowed charges for such services. In ap-
plying the previous sentence, there shall not be 
taken into account claims for prescriptions writ-
ten for controlled substances which may not 
under law be prescribed using the electronic 
prescription drug program. 
‘‘(B) APPLICATION TO PHYSICIAN SHORT-
AGE BONUSES.—The additional payment under 
this paragraph shall be taken into account in 
applying subsections (m) and (u). 
‘‘(3) AUDITING.—Provisions applicable to the 
auditing of claims for payment and enforcement of 
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false claims under this part shall apply to claims for 
payment under this subsection. 
‘‘(4) ELECTRONIC
PRESCRIPTION
DRUG
PRO-
GRAM DEFINED.—In this subsection, the term ‘elec-
tronic prescription drug program’ means the pro-
gram established under section 1860D–4(e).’’. 
(b) ADJUSTMENT IN FEE SCHEDULE FOR FAILURE 
TO USE E-PRESCRIBING.—Section 1848(a) of such Act 
(42 U.S.C. 1395w–8(a)) is amended by adding at the end 
the following new paragraph: 
‘‘(5) REQUIREMENT
FOR
USE
OF
E-PRE-
SCRIBING.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), effective for physicians’ services fur-
nished on or after January 1, 2011, in the case 
of such services— 
‘‘(i) that are classified as evaluation 
and management services under this sec-
tion; and 
‘‘(ii) in connection with which there 
was one or more prescriptions made that 
could have been made, but were not all 
made, under the electronic prescription 
drug program, 
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the fee schedule amount otherwise applicable 
under this section shall be reduced by 10 per-
cent. 
‘‘(B) WAIVER.—The Secretary may waive 
the application of subparagraph (A) until Janu-
ary 1, 2012, or January 1, 2013, as specified 
by the Secretary, in cases of demonstrated 
hardship or unforeseen circumstances specified 
by the Secretary.’’. 
SEC. 4. REPORTS ON E-PRESCRIBING. 
(a) CMS REPORT.— 
(1) IN GENERAL.—Not later than 2 years after 
the date of the enactment of this Act, the Adminis-
trator of the Centers for Medicare & Medicaid Serv-
ices shall submit to Congress a report on progress 
on implementing e-prescribing under the Medicare 
electronic prescription drug program under section 
1860D–4(e) of the Social Security Act (42 U.S.C. 
1395w–104(e)). 
(2) ITEMS INCLUDED.—Such report shall in-
clude information on— 
(A) the percentage of Medicare physicians 
that utilize the electronic prescription drug pro-
gram; 
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