Since their adoption in 2006, the Regulations have enabled hospitals and other providers and suppliers to subsidize up to 85 percent of the costs of EHR software and/or information technology and training services that are necessary and used “predominately” to create, maintain, transmit or receive electronic health records. The Stark exception, which is located at 42 C.F.R. 411.357(w), and the Anti-Kickback Statute safe harbor, which is located at 42 C.F.R. 1001.952(y), are virtually identical.
In addition to extending the expiration date from December 31, 2013 to December 31, 2021, the Regulations made several other changes and clarifications.
Exclusion of Laboratory Companies. Laboratory companies are no longer eligible to subsidize EHR systems due to concerns that some laboratories were explicitly or implicitly conditioning donations of EHR systems on the receipt of referrals from physicians. Commenters complained that such quid pro quo donations were increasing prices for laboratory services and impacting patient care. The decision to exclude laboratory companies from the universe of potential donors is consistent with some state laws and Attorney General Opinions that have prohibited or restricted laboratories from donating EHR systems. Laboratories that are currently engaged in EHR donation programs should take steps to end their donation programs by the March 27, 2014 deadline or restructure them to comply with Stark and the Anti-Kickback Statute. Other ancillary suppliers (e.g., durable medical equipment companies) are still permitted to make donations under the Regulations.
Modifications to Deemed Interoperability. Under the existing Regulations, the EHR technology is required to be “interoperable” at the time it is provided to the recipient. An EHR system will now be deemed “interoperable” if, on the date that it is provided to the recipient, it has been certified by a certifying body recognized by the Office of the National Coordinator (ONC) to an edition of the EHR certification criteria identified in the then applicable 45 C.F.R. part 170. CMS noted that the ONC’s certification criteria are implemented through a public process and, therefore, “affords the best opportunity for interested parties to comment on, understand, and ultimately implement those criteria and standards.”
E-Prescribing Capability No Longer Required. The EHR system is no longer required to have e-prescribing functionality. CMS and the OIG concluded there was sufficient incentive apart from the Regulations to motivate physicians to use e-prescribing software, and that they do not want to require technology that may be redundant of other e-prescribing software that physicians may have.
Prohibition On Data and Referral “Lock-In.” CMS and the OIG added clarifying language to the Regulations to emphasize that donating entities cannot take any action that restricts the use, compatibility or interoperability of the donated items and services. CMS and the OIG received comments that some donating entities were reaching agreements with physicians that required physicians to refer patients only to the donating entities. Other donating entities reportedly charged high fees for interfaces that would allow competing entities to connect with the EHR, effectively preventing physicians from working with other providers.
No Additional Guidance on Covered Technology. The existing Regulations offer some guidance regarding what technology may be donated, however commenters requested more explicit guidance about eligible technology. CMS and the OIG declined to further clarify what technology would be eligible for donation and, instead, noted that “whether specific items or services fall within the scope of covered technology under the exception ... depends on the exact items or services that are being donated.” CMS and the OIG emphasized that the Regulations do not protect monetary remuneration or donations of hardware or items with core functionality other than EHR.
The extension of the Regulations to December 31, 2021 is welcome news for those (non-laboratory) providers and suppliers that wish to maintain their existing EHR donation programs or commence new programs. Together with the financial incentives offered under the Medicare and Medicaid EHR Incentive Programs, the Regulations should facilitate the continued adoption of EHR systems for some time.
Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our health care clients and colleagues. If you have any questions about this Alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals:
Richard K. Rifenbark
Los Angeles, California
Donald H. Romano
C. Frederick Geilfuss II
Shilpa S. Patel
New York, New York