Something as simple as a new provider identifier, thought to add efficiency to billing and reimbursement, has caused all kinds of grief for the private sector. When the HIPAA legislation mandated the use of a national provider identifier (NPI), it sounded fairly straightforward. But there were conversion problems, and there still are, even with the extension to the latter part of May that CMS granted.

It is not that the old provider identifiers were not doing the job. This makes me conclude that every time the government, whether federal or state, tries to improve the “system,” it creates new and, in some cases, larger problems. The administrative simplification component of HIPAA was viewed as a way to reduce the cost of healthcare. However, every aspect of the HIPAA legislation has collectively cost the private sector billions of dollars to comply. CMS is not at fault here. It is the people who drafted the legislation. With HIPAA it fell to CMS to figure out how to implement the legislation.

Now we have the FDA faced with a similar challenge — figuring out how to implement e-pedigrees and unique product identifiers to track, trace, and authenticate prescription drug products as they move through the supply channel. I recently heard a senior-level person at the FDA explain what must be done by the March 2010 deadline. Key to the successful implementation of an e-pedigree program is that every product moving through the channel must have a unique identifier. And of course there is the need for standards to allow for interoperability. Unlike HIPAA, here we are looking at a wide range of standards. There is a standard needed for the RFID “tags,” a standard needed for high frequency, a standard needed for ultra-high frequency, and the list goes on. The FDA is following standards development closely, since they have the option of adopting existing standards rather than developing their own. What’s different about these standards is that they will be global in nature, because of the worldwide reach of pharma companies. Also, there are a number of technologies that can be used for authentication — RFID isn’t the only solution. Two-dimensional bar codes, for example, offer a far less expensive option. Holograms are another, but can you believe there has been

counterfeiting of these? There must be convincing evidence that the solution is “bulletproof.” Getting all the stakeholders on the same page is going to be a tough task. Then there is the question of what all this will cost the private sector. Numbers I have been privy to regarding the California e-pedigree law have projected a significant new cost of doing business in that state.

What I can’t understand, is why isn’t a cost analysis done before and not after the fact? And in the case of e-pedigrees, will this really stop diversion and counterfeiting? CT

Bill Lockwood is the publisher of ComputerTalk. He can be reached at wal@computertalk.com.