Alert: California Law Now Requires E-Scripts

April 25, 2022

A sweeping law went into effect on January 1st of this year in California that now requires all licensed medical prescribers to use e-prescriptions unless an exemption is met. It applies to the vast majority of licensed prescribers in California, making only a few limited exceptions.

The AB 2789 bill was signed into law by the Governor in 2018, and became effective January 1, 2022. The law requires that all licensed medical prescribers are required to use e-prescriptions for all controlled and non-controlled substances unless an exemption is met. Unlike most states, this mandatory e-prescribing requirement applies to both controlled and non-controlled substances. The exemptions include: 1) prescriptions of schedule II controlled substances that comply with the rules made to terminally ill patients, 2) when electronic prescribing is not possible due to a temporary electric or technological failure, 3) prescriptions intended to be filled outside of California, 4) prescriptions made by hospitals or urgent care clinics to patients who live outside of the area or are homeless or whose pharmacy is likely closed, 5) prescriptions by veterinarians, 6) prescriptions for glasses or contacts, 7) when the prescription and dispensing are within the same entity, 8) when the prescriber reasonably determines that an electronic prescription makes it impractical for the patient to obtain the prescribed substances, and 9) the prescription includes elements not covered in the latest SCRIPT standard from the National Council for Prescription Drug Program. Therefore, unless an exemption is met, all medical practices and medical prescribers must begin use of e-prescriptions for all controlled and non-controlled substances starting January 1, 2022.

Per the Medical Board of California (“MBC”), medical providers who fail to meet the requirements of AB 2789 will be referred to the appropriate state professional licensing board which will likely be administration sanctions, as deemed appropriate by that board. However, MBC has not proposed any specific enforcement actions they might take. That being said, in the podcast that MBC held in September of 2021, they noted that for prescribers who are not prepared to issue electronic prescriptions will be viewed as out of compliance with the law, however that will not require a pharmacist to reject a prescription that is not issued electronically yet. This means even though MBC has not officially published the penalty, they are expecting all providers to be using e-prescriptions.

What This Means For You

Because this law went into effect on January 1st, it is important to recognize it applies now. The first step would be determining whether a permanent exception applies, such as the prescription and dispensing being located within the same entity. Even if a practice is able to meet this exception (there are state rules regarding dispensing within a practice), it is important to understand that use of the exception only applies to that particular type of prescription.  If a practice issues any prescriptions to patients that are to be fulfilled elsewhere, the practice would have to acquire an e-prescribing system to be compliant.

Even if a permanent exception does not apply, licensed medical prescribers should familiarize themselves with the temporary exceptions, such as in the case of a power outage, so that they know the appropriate times when they are not required to use e-prescriptions. The Board has recommended that all licensed prescribers have paper prescription forms available that meet the requirements of Health and Safety Code §11162.1, should a technological or electrical failure occur. If such failure does occur, a healthcare practitioner should document in the patient’s medical record the reason an e-prescription was not used within seventy-two ours of the end of the failure.

Federal Medicare Rules on E-Scripts for Controlled Substances

In addition to this new law, practitioners must also comply with federal Medicare rules on electronic prescribing for controlled substances. Title 21 of the Code of Federal Regulations provides guidance for using Electronic Prescription for Controlled Substances, which includes using third-party certification to ensure that prescription software applications meet DEA requirements, using access controls established by software users, and using two-factor authentication for prescription signatures.

Licensed medical prescribers must be in compliance because the burden of showing that the prescription meets one of these exemptions falls on the prescribing practitioner. Pharmacists are still able to fill written, faxed, and oral prescriptions and do not have to verify that an exemption was met. As mentioned previously, practitioners and pharmacists who fail to comply with these rules can receive discipline and sanctions from their licensing boards. 

E-Prescribing Software

All licensed medical prescribers should implement medical software that has compliant e-prescribing software as soon as possible to be in compliance. You will want to check with your system provider to determine the best way to implement this software that has e-prescription capabilities.

Contact ByrdAdatto

At ByrdAdatto we are working hard to ensure our clients are well equipped and ready for operating their business. If you have questions regarding this article, reach out to info@byrdadatto.com.

We are grateful for the significant research and drafting contribution to this article from our law clerk Emily Reese. Emily is a second year student at SMU Dedman School of Law.

ByrdAdatto attorney Jay Reyero

Jay D. Reyero

Jay grew up playing team sports and sees himself as an integral part of his client's team.