$10 million for prescription exchange interoperability

Written by Kate McDonald on .

Electronic prescription exchange vendors eRx and MediSecure will receive $660,000 each for technical work to ensure they are interoperable, as well as a share in more than $8.3 million in transaction fees.

As reported by Pulse+IT in October, eRx and MediSecure have been working together for some months under a deal brokered by the Department of Health and Ageing (DoHA) to ensure both exchanges can interoperate. At present, a prescription lodged with one of the exchanges can only be downloaded and dispensed by pharmacists using the same system.

According to a copy of the contract submitted to the Australian Competition and Consumer Commission (ACCC) by eRx, the government will contribute a total of $1,320,000, paid in three instalments, to the two exchanges as a capital investment to achieve interim interoperability.

A prescription exchange service electronic prescription fee (PEPF) will also be paid on each transaction, with $8,361,460 available in total. The fee has been set at 85c per transaction up to December 31, 2012, and will reduce to 35c per transaction until June 30, 2013, or until the funds are fully expended.

The Department of Health and Ageing said the 85 cent fee reflects the cost of delivering the service until interoperability is achieved. The volume of scrips is expected to increase substantially once the exchanges are interoperable, resulting in a reduction in the fee to 35c in the new year.

If a prescription is collected by one exchange and dispensed by the other, the two have agreed to an "interchange fee" of 50 per cent share each.

The contract appears to have necessitated an application to the ACCC for authorisation as the agreement to share equally in the transaction fees could be considered anti-competitive. According to supporting arguments submitted by DoHA, the public benefits which will derive from interoperability would outweigh any anti-competitive effect.

The $10m is not new money but is a budgeted part of the $15.4 billion Fifth Community Pharmacy Agreement (5CPA), which also established a payment of 15 cents per electronic script to pharmacies. The market price charged by the exchanges has since settled in a way that the service is in effect free to pharmacies.

In the supporting documents accompanying eRx's application, the federal government said that while electronic transfer of prescriptions is a priority under the 5CPA, the number of eligible electronic prescriptions for 2011-12 was less than expected.

“Early analysis has revealed that there are large numbers of electronic prescriptions being lodged to the [prescription exchange service] PES by prescribers (doctors), but the number being downloaded by dispensers (pharmacies) is quite low,” the documents state.

“The main cause identified is that the patient presents to a pharmacy which is not connected to the particular PES containing the relevant electronic prescription.”

Under the contract signed by both eRx and MediSecure, the two exchanges must work together and share all information necessary to create interoperability between their systems by December 24 this year. Pulse+IT understands that while the technical hurdles are not difficult, it will require the exchanges to add an adaptor to each system in every client pharmacy.

Part of the work will include the standardisation of the format and positioning of the barcodes on the original prescriptions and a mechanism for facilitating the inter-PES transaction fee.

Interoperability will still be considered interim, as the Australian technical specifications for electronic transfer of prescriptions (ETP) are not yet ready. The technical specifications are currently being considered by Standards Australia subcommittee IT-014-06-04.

The contract states that full PES interoperability, conforming to those specifications and a resulting Australian Standard, will follow the completion of the project.

The amount of money on offer is far superior to the amount being paid by NEHTA to the secure messaging service vendors, some of which have also been working on interoperability.

NEHTA announced recently that it would pay the fees for having secure messaging services tested at a NATA-approved laboratory, if the services pass their conformance test for the secure message delivery (SMD) standard, as well as payments of $15,000 to each vendor that can prove it has achieved interoperability with at least two other vendors.

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