Original Notice.

     Preproposal statement of inquiry was filed as WSR 98-14-118.

     Title of Rule: WAC 246-870-010 - 246-870-090, electronic transmission of prescription information.

     Purpose: The proposed rule implements legislation to allow the electronic transfer of prescription information from practitioner's offices to pharmacies and between pharmacies.

     Statutory Authority for Adoption: Chapters 69.41, 69.50 RCW, RCW 18.64.005.

     Statute Being Implemented: Chapters 69.41, 69.50 RCW.

     Summary: The proposed rule will ensure compliance with law on the electronic transfer of prescription information and provide guidance to the user on how compliance with the rule can be achieved. The rule also implements legislation enacted in 2001 pertaining to the faxing of controlled substance prescriptions.

     Reasons Supporting Proposal: Promotes public health and safety.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Donald Williams, 310 Israel Road S.E., Tumwater, 98501, (360) 236-4825.

     Name of Proponent: Department of Health, Board of Pharmacy, governmental.

     Rule is not necessitated by federal law, federal or state court decision.

     Explanation of Rule, its Purpose, and Anticipated Effects: The proposed rule allows the electronic transfer of prescription information from practitioner's offices to pharmacies and between pharmacies. The proposed rule provides guidance to users on how compliance with the rule can be achieved. Electronic prescription transfer programs can promote public health and safety by reducing medication errors attributed to illegible handwriting and look alike/sound alike drugs. By requiring standard data input protocols, pharmacist should not need to contact prescribers to obtain missing prescription information. This could reduce patient wait time at the pharmacy. The rule also implements legislation enacted in 2001 pertaining to the faxing of controlled substance prescriptions.

     Proposal does not change existing rules. This is a new WAC section.

     A small business economic impact statement has been prepared under chapter 19.85 RCW.

     The rule requires that:

•     The system used for transmitting electronically communicated prescription information and the board must approve the system used for receiving electronically communicated prescription information.

•     The electronic system shall have adequate security and systems safeguards designed to prevent and detect unauthorized access, modification, or manipulation of these records.

•     The pharmacist in charge of a pharmacy that accepts electronic prescriptions shall establish or verify the existence of policies and procedures which ensure the integrity and confidentiality of prescription information transmitted to the pharmacy by electronic means.

•     All managers, employees, and agents of the pharmacies that accept electronic prescriptions read, sign, and comply with the established policies and procedures.

     II. What industries are affected? Standard industrial classification (SIC) Code 5912 Drug stores and proprietary stores. The average size of the largest 10% of businesses in this sector is 91.62 employees and the average size of the remaining businesses is 15.23 employees.

			Average Employment
	Number of Firms	Total Employment	Small Business	Large Business
5912 Drug stores and proprietary stores	607	11,266	15.23	91.62

     III. What are the costs? It must be stressed that this rule does not require pharmacies to accept electronic prescriptions. Pharmacies that do not wish to accept electronic prescriptions are not required to make any changes to current practices.

     Those pharmacies that do wish to accept electronic prescriptions will need to purchase new software and will incur additional labor costs. Software and labor costs were estimated by discussion with industry stakeholders, pharmacists, board members, and pharmacy board investigators (who inspect 50% of pharmacies each year). These estimates indicate that the average cost for pharmacies would be about $10,600 initially plus about $670 per year thereafter.

•     Software:

     a.     Security software will be required to allow pharmacies to decrypt prescription information from multiple prescriber systems. The initial cost of the software is expected to be $10,000.

     b.     This software will require periodic upgrades as prescriber systems are updated, new prescriber systems are developed, and encryption standards are improved. The cost of software upgrades is expected to average $500 per year.

•     Labor:

     a.     Pharmacies must develop policies and procedures that must be approved by the Board of Pharmacy.

     b.     Staff must be trained on policies and procedures.

     c.     Staff must be trained on software.

     Staffing levels vary between pharmacies. The average pharmacy employs three pharmacists and three technicians¹ and will experience an average initial training cost of $381. Continuing training costs are expected to be average $66 based on staff turnover.

     Pharmacies able to receive electronic prescription will have a competitive advantage over pharmacies that do not. The average cost of processing an electronic prescription is less than that of a traditional hand written script because it virtually eliminates the need for staff to call prescribers or insurers.

     IV. Is the cost disproportionate? This rule has been reviewed and has been found to have a disproportionate impact on small businesses that choose to accept electronic prescriptions.

     Average employment in SIC 5912 does not fit the pattern of employment in the 1,126 pharmacies the Board of Pharmacy licenses. Retail pharmacies in Washington generally employ between six and ten people. Individual pharmacies will experience similar implementation costs.

     Worst case analysis for SIC Code 5912.

     Drug stores and proprietary stores.

	Small Business	Large Business
Average Employment	15.23	91.62
Average cost per employee	$721	$162

     V. What cost minimizing features were included?

     A. Reducing, modifying, or eliminating substantive regulatory requirements. Pharmacies are not required to receive electronic prescriptions.

     B. Simplifying, reducing, or eliminating record-keeping and reporting requirements. This rule does not impose any additional record-keeping requirements for electronic prescriptions.

     C. Reducing the frequency of inspections. The rule does not increase the frequency of inspections.

     D. Delaying compliance timetables. This rule was developed at the request and with complete cooperation of the pharmacy industry.

     E. Reducing or modifying fine schedules for noncompliance. This rule does not impose any additional fines for noncompliance with preexisting prescription record-keeping requirements.

     VI. How will you involve small business in the rule making? Small businesses attended stakeholder meetings.

¹ Assumes an average pharmacy is open eighty-eight hours per week.

     A copy of the statement may be obtained by writing to Lisa Salmi, Department of Health, Board of Pharmacy, P.O. Box 47863, Olympia, WA 98504-7863, Lisa.Salmi@doh.wa.gov, phone (360) 236-4828, fax (360) 586-4359.

     RCW 34.05.328 applies to this rule adoption. The rule subjects a violator of the rule to penalty or sanction.

     Hearing Location: Holiday Inn, 17338 International Boulevard, SeaTac, WA 98188, on July 23, 2003, at 10:00 a.m.

     Assistance for Persons with Disabilities: Contact Lisa Salmi by July 20, 2003, TDD (800) 833-6388 or (360) 236-4828.

     Submit Written Comments to: Lisa Salmi, Department of Health, Board of Pharmacy, P.O. Box 47863, Olympia, WA 98504-7863, Lisa.Salmi@doh.wa.gov, fax (360) 586-4359, by July 23, 2003.

     Date of Intended Adoption: July 30, 2003.

April 29, 2003

D. H. Williams

Executive Director

OTS-6158.1

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     (2) "Confidential patient information" means information maintained in the patient's health care records or individually identifiable health care records. Confidential information must be maintained and protected from release in accordance with chapter 70.02 RCW and applicable federal law.

     (3) "Digital signature" means an electronic identifier that provides for message integrity, nonrepudiation, user authentication, and encryption and is intended to have the force and effect of a manual signature.

     (4) "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with a prescription and executed or adopted by an authorized person with the intent to sign the prescription.

     (5) "Security" means a system to maintain the confidentiality and integrity of patient records including:

     (a) Documented formal procedures for selecting and executing security measures;

     (b) Physical safeguards to protect computer systems and other pertinent equipment from intrusion;

     (c) Processes to protect, control and audit access to confidential patient information; and

     (d) Processes to prevent unauthorized access to the data when transmitted over communication networks or when data physically moves from one location to another using media such as magnetic tape, removable drives or CD media.

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     Transmission of original prescriptions must include:

     (1) Prescriber's name and the physical address of the prescriber;

     (2) Prescriber's Drug Enforcement Administration Registration number where required for controlled substance prescriptions;

     (3) Date of issuance;

     (4) Patient's name and address;

     (5) Drug name, dose, route, form, directions for use, quantity;

     (6) Electronic, digital, or manual signature of the prescriber;

     (7) Refills or renewals authorized, if any;

     (8) A place to note allergies and a notation of purpose for the drug;

     (9) Indication of preference for a generic equivalent drug substitution;

     (10) Any other requirements consistent with laws and rules pertaining to prescription content and form, RCW 69.41.120 and 21 Code of Federal Regulations Part 1300; and

     (11) Identification of the electronic system readily retrievable for board of pharmacy inspection.

     Transfer of prescription information from pharmacy to pharmacy by facsimile, or verbally, must include:

     (a) All elements of the original prescription;

     (b) Date of transfer maintained in records at each site;

     (c) Number of refills remaining and the date of last refill;

     (d) State and federal required information for controlled substances;

     (e) No further refills may be issued by the transferring pharmacy unless the pharmacies use a common electronic data base for prescription filling which provides an audit trail to document each refill and limits refills to the number authorized.

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     Federal and state law do not allow the electronic transfer of Schedule II prescriptions except exact visual images as described in WAC 246-870-050(3). The pertinent requirements for Schedule II prescriptions are found in RCW 69.50.308 and 21 CFR Part 1306.

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     (1) The order contains the date, time, and telephone number and location of the transmitting device.

     (2) Prescriptions for Schedule III, IV, and V drugs may be transmitted at any time.

     (3) Prescriptions for Schedule II drugs may be transmitted only under the following conditions:

     (a) The order is for an injectable Schedule II narcotic substance that is to be compounded by the pharmacist for patient use; or

     (b) The prescription is written for patients in the following facilities:

     (i) A long-term care facility as defined in RCW 69.50.308; or

     (ii) A hospice agency licensed under RCW 70.127.030(2);

     (c) The prescription must be signed by the prescriber;

     (d) In a nonemergent situation, an order for Schedule II controlled substances may be prepared for delivery to a patient pursuant to a facsimile transmission but may not be dispensed to the patient except upon presentation of a written order;

     (e) In an emergent situation, an order for Schedule II controlled substances may be dispensed to the patient upon the oral prescription of a prescriber subject to the requirements of RCW 69.50.308(c). The pharmacy has seven days to obtain a written prescription that covers an emergency Schedule II oral prescription.

     (4) The transmitted order shall be filed in the same manner as any other prescription. However, the pharmacist is responsible for assuring that the quality of the order is sufficient to be legible for at least two years pursuant to the records retention requirements of WAC 246-869-100.

     (5) Refill authorizations for prescriptions may be electronically transmitted.

     (6) The pharmacist is responsible for assuring that each electronically transmitted prescription is valid and shall verify authenticity with the prescriber whenever there is a question.

     (7) No agreement between a prescriber and a pharmacist or pharmacy shall require that prescription orders be electronically transmitted from the prescriber to only that pharmacy.

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     (2) Systems in which prescriptions are transmitted from the prescriber's facsimile machine to the pharmacy facsimile machine do not require board approval.

     (3) Each system shall have policies and procedures on the electronic transmission of prescription information available that address the following:

     (a) Patient access. The system may not restrict the patient's access to the pharmacy of their choice.

     (b) Security. The system shall have security and system safeguard designed to prevent and detect unauthorized access, modification, or manipulation of prescription information. Accordingly, the system should include:

     (i) Documented formal procedures for selecting and executing security measures;

     (ii) Physical safeguards to protect computer systems and other pertinent equipment from intrusion;

     (iii) Processes to protect, control and audit access to confidential patient information; and

     (iv) Processes to prevent unauthorized access to the data when transmitted over communication networks or when data physically moves from one location to another using media such as magnetic tape, removable drives or CD media.

     (c) Pharmacies that utilize intermediaries in the electronic communication of prescriptions such as third party payers shall be responsible to insure that their contracts with these intermediaries require security measures that are equal to or better than those provided by this rule and prohibit the modification of any prescription record after it has been transmitted by the practitioner to the pharmacist.

     (d) Confidentiality of patient records. The system shall maintain the confidentiality of patient information in accordance with the requirements of chapters 18.64, 69.50, and 70.02 RCW Health Care Information Act and any applicable federal law.

     (e) Authentication. To be valid prescriptions transmitted by an authorized prescriber from computer to fax machine or from computer to computer must use an electronic signature or digital signature.

     (4) The system shall provide for the transmission and retention of the information by the sender and the receiver of the prescription as required in WAC 246-870-030.

     (5) The system must authenticate the sender's authority and credentials to transmit a prescription.

     (a) The system shall provide an audit trail of all prescriptions electronically transmitted that documents for retrieval all actions and persons who have acted on a prescription, including authorized delegation of transmission;

     (b) The right of the Washington state board of pharmacy to access electronically submitted prescriptions for purposes of investigations in disciplinary proceedings.

     (6) If a hard copy prescription, generated from the electronic prescription system, is printed on security paper that insures it is not subject to copying or alteration, an electronic signature may be substituted for a manual signature.

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