To amend title XVIII of the Social Security Act to require physician utilization of the Medicare electronic prescription drug program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Electronic Medication and 
Safety Protection (E-MEDS) Act of 2007''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Patient safety is an important issue and a priority 
        among patients, providers, insurers, businesses, and government 
        entities alike.
            (2) Adverse drug events are defined by the Institute of 
        Medicine as ``any injury due to medication''.
            (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 preventable 
        adverse drug events occur each year among the Medicare 
        population, and cost the Federal Government 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 pharmacist.
            (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 can result from 
        illegible prescriptions and bad drug interactions, in addition 
        to reducing patient medication 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 determines, 
                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 Secretary) of claims for physicians' 
                services for individuals enrolled under this part 
                that--
                            ``(i) are classified (under section 1848) 
                        as evaluation and management services;
                            ``(ii) include the making of a prescription 
                        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 physician, in 
                addition to any other payment under this part, of the 
                amount specified in subparagraph (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 subparagraph (A) for a 
                period that begins during--
                            ``(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-prescribing.--
                    ``(A) In general.--If the Secretary determines, 
                based upon coding in claims submitted 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 specified 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 services 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 applying the previous sentence, there 
                shall not be taken into account claims for 
                prescriptions written for controlled substances which 
                may not under law be prescribed using the electronic 
                prescription drug program.
                    ``(B) Application to physician shortage 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 false claims under this 
        part shall apply to claims for payment under this subsection.
            ``(4) Electronic prescription drug program defined.--In 
        this subsection, the term `electronic prescription drug 
        program' means the program 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-prescribing.--
                    ``(A) In general.--Subject to subparagraph (B), 
                effective for physicians' services furnished on or 
                after January 1, 2011, in the case of such services--
                            ``(i) that are classified as evaluation and 
                        management services under this section; 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,
                the fee schedule amount otherwise applicable under this 
                section shall be reduced by 10 percent.
                    ``(B) Waiver.--The Secretary may waive the 
                application of subparagraph (A) until January 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 Administrator of the Centers for 
        Medicare & Medicaid Services 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 include information 
        on--
                    (A) the percentage of Medicare physicians that 
                utilize the electronic prescription drug program;
                    (B) the estimated savings resulting from the use of 
                e-prescribing; and
                    (C) progress on reducing avoidable medical errors 
                resulting from the use of e-prescribing.
    (b) GAO Report.--
            (1) In general.--Not later than 2 years after the date of 
        the enactment of this Act, the Comptroller General of the 
        United States shall submit to Congress a report on the impact 
        of implementation of such program on physicians.
            (2) Items included.--Such report shall include information 
        on--
                    (A) factors influencing the adopting of e-
                prescribing by physicians; and
                    (B) the impact of this Act on physicians practicing 
                in individual or small group practices and on 
                physicians practicing in rural areas.

Summary: Medicare Electronic Medication and Safety Protection (E-MEDS) Act of 2007 - Amends title XVIII (Medicare) of the Social Security Act to require the Secretary of Health and Human Services to: (1) make incentive payments for physician use of an electronic prescription drug program (E-prescribing); and (2) reduce by 10% the fee schedule amount for failure to use E-prescribing.

Directs the Administrator of the Centers for Medicare & Medicaid Services to report to Congress on progress on implementing E-prescribing under the Medicare electronic prescription drug program.