Electronic health record safe harbors
By Helen Oscislawski, Esq.
Can physicians accept “donated” technology and services relating to electronic health records and electronic prescribing?
The answer to the question is “yes.” However, the corollary question that this article aims to answer is how this can be accomplished without running afoul of the federal Anti-Kickback Statute (Anti-Kickback Law) and Physician Self-Referral Law (Stark Law) .
On October 10, 2006, final rules that establish new protections for certain arrangements involving donations of technology and related services used in electronic prescription (e-Prescribing) and electronic health records (e-Health Records) went into effect. Previously, the government generally has viewed such donations to potential referral sources as an inducement under the Anti-Kickback Law. Such arrangements could also potentially violate the Stark Law. However, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) required the government to promulgate regulations that would protect legitimate arrangements and, in turn, assist physicians with establishing e-Prescribing as required under the MMA. Moreover, such protections would encourage physicians to adopt e-Health Records technology and promote the government’s ultimate goal of achieving fully interoperable e-Health Records for all patients.
In response, a new safe harbor and exception were created to protect arrangements with regard to technology donated for e-Prescribing purposes (hereafter, respectively, referred to as the “e-Prescribing Safe Harbor” and the “e-Prescribing Exception”). In addition, a second safe harbor and exception were created to protect arrangements with regard to technology donated for e-Health Records purposes (hereafter, respectively, referred to as the “e-Health Records Safe Harbor” and the “e-Health Records Exception”). These new rules now allow certain technology and services to be donated from qualified donors, such as hospitals, to physicians.
However, before a physician accepts any such donation, he or she should determine whether the arrangement meets the requirements for the donation to fit within the applicable safe harbor and/or exception. A summary of those requirements are set forth below.
The requirements to meet the e-Prescribing Safe Harbor and e-Prescribing Exception are nearly identical. Physicians who wish to accept e-Prescribing technology or services may do so if all of the following requirements are satisfied.
Permitted Donors and Recipients
The class of donors and recipients that are potentially protected are strictly limited to: (1) hospitals donating to members of their medical staffs; (2) group practices donating to physician members; and, (3) Prescription Drug Plan sponsors and Medicare Advantage organizations donating to prescribing physicians. In addition, donors are prohibited from taking into account, directly or indirectly, the volume or value of referrals from the recipient-physician, or other business generated between the parties.
Worthy of note is that clinical laboratories are not included among the list of donors that may qualify for protection. However, clinical laboratories, as well as other potential donors, may qualify for protection under the more expansive definition of that term found in the e-Health Records Safe Harbor and e-Health Records Exception (discussed below), as long as the other conditions are met.
Protected Technology and Services
Any item or service that is “necessary and used solely to transmit electronic prescription information” can qualify for protection. This includes hardware, as well as software, information technology and/or training services that are necessary to receive and transmit e-Prescription information. In addition, “electronic prescription information” includes information about prescriptions for any items or services (i.e., including medical equipment) that are normally procured through a written prescription.
In order to be considered “necessary,” any donated technology for e-Prescribing cannot be technically or functionally equivalent to technology that the recipient-physician already possesses. Moreover, donated technology cannot be used for a purpose other than e-Prescribing. Therefore, any software that bundles general office management, billing, scheduling, e-Health Records, or other functions with the e-Prescribing features would not meet the “used solely” requirement (although such software may still be eligible for protection under the e-Health Records safe harbor or exception). The donor also cannot take any action to limit the use or compatibility of the e-Prescribing technology with other e-Prescribing or electronic health records systems.
The technology donated to support e-Prescribing must allow the recipient-physician to comply with all of the applicable standards for e-Prescribing under Medicare Part D, which requires, among other things, that electronic prescription drug programs meet certain functional and electronic system requirements.
Thus, donors that wish to donate multifunctional technology (which may include e-Prescribing software, among other functions) must turn to the e-Health Records safe harbor and exception for protection.
Any arrangement for the donation of e-Prescribing technology must be in writing,
signed by the parties, and identify with the items or services being provided. In addition, there must be documentation that sets forth the donor’s cost for the technology.
The e-Health Records Safe Harbor and e-Health Records Exception are almost identical, with some substantive differences. Physicians who wish to accept e-Health Records technology or services may do so if all of the following requirements are satisfied.
Protected Donors and Recipients
Under the e-Health Records Safe Harbor, “any individual and entity that provides covered services and submits claims or requests for payment, either directly or through reassignment, to any federal health care program, and health plans” may qualify as a protected donor/recipient. Under the e-Health Records Stark Exception, “any entity that furnishes designated health services to any physician” may qualify as a protected donor, and “any physician” may qualify as a protected recipient. Therefore, the potential class of donors and recipients for e-Health Records technology is must broader than for e-Prescribing.
As with e-Prescribing, a recipient cannot be selected in a manner that considers the volume or value of referrals or other business generated between the parties. Notwithstanding the foregoing, if a donor uses any one of six “selection criteria,” the selected recipient will be deemed proper. They are, selection of a recipient based upon: (1) the size of the medical practice; (2) the total number of prescriptions written; (3) the total number of hours of medical practice; (4) the overall use of automated technology; (5) the amount of uncompensated care; or (6) whether the recipient is a member of the donor’s medical staff.
Protected Technology and Services
Any software, information technology and training services that are “necessary and used predominately to created, maintain, transmit, or receive electronic health records” may qualify for protection. Examples include: interface and translation software; licenses for software; connectivity services (i.e., broadband and wireless); and, maintenance and other support services that are directly related to the e-Health Records. Any software donated in connection with e-Health Records must include e-Prescribing capability, either in an electronic prescribing component or the ability to interface with the physician’s existing e-prescribing system.
Donation of hardware does not qualify for protection.
As with e-Prescribing, the donor cannot take any action to limit the use or compatibility of the e-Health Records technology with other e-Prescribing or electronic health records systems. Moreover, the recipient cannot already possess the technology equivalent to those that are to be provided by the donor. In addition, the donor may not restrict the use of the technology for any patients. Finally, the recipient-physician cannot condition doing business with the donor on the receipt or volume of technology or services.
All donated e-Health Records technology must be “interoperable,” which is defined to mean that, at the time of the donation, the software is able to: (1) communicate and exchange data accurately, effectively, securely and consistently with different information technology systems, software applications and networks, in various settings; and, (2) exchange data such that the clinical or operational purpose and meaning of the date are preserved and unaltered.
The government has contracted with the Certification Commission for Health Care Information Technology (CCHIT) to perform and issue certifications of technology that meets their certification criteria. Any e-Health Record technology that has been certified by CCHIT as “interoperable” is deemed to have met the government’s interoperability requirement.
15 Percent Recipient Cost-Sharing Requirement
An arrangement between donor and recipient for e-Health Record technology is only protected where the recipient pays for at least 15 percent of the cost of the donated technology. This 15 percent cost-sharing must be paid at the time, or prior to, receipt of the technology. The donor may not finance the physician-recipient’s payment or loan funds for use by the physician-recipient to pay for the item or service.
In addition, the e-Health Records Safe Harbor requirement mandates that the donor not shift the costs for any donated items or services to any federal health care program.
The cost of the donated e-Health Records technology to the donor, and the physician’s contribution to that cost must be documented before items and services can qualify of for protection under the e-Health Records Stark Exception.
December 31, 2013 Sunset
The transfer of any and all technology and related services must occur, and all of the conditions must be met, on or before December 13, 2013.
In sum, the new Stark exceptions and Anti-Kickback safe harbors offer new protections to donors and recipients of technology and services relating to e-Prescribing and e-Health Records. This should promote advancement of e-Prescribing and e-Health Records. Physicians who are interested in obtaining such technology from donors, such as hospital, should carefully examine whether the proposed arrangement can be structured within appropriate e-Prescribing and/or e-Health Records safe harbor and exception.
However, even if your particular arrangement does not fit within the safe harbors and exceptions discussed in this article, all may not be lost. Already-existing safe harbors to the Anti-Kickback Law and exceptions to the Stark Law may offer protection. Any decision, however, to accept valuable technology or services should not be made lightly, nor without the input and guidance of experienced health care counsel.
Helen Oscislawski, Esq., is a corporate health care attorney with the Princeton offices of Fox Rothschild LLP.