By:  Alaap Shah and Marshall Jackson

 

With the New Year, come new protections for health care entities and individuals utilizing electronic health records (EHRs).  On December 27, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) and the Centers for Medicare and Medicaid Services (CMS), issued final rules regarding the Stark Exception and the Anti-Kickback Safe Harbor permitting certain health care organizations to subsidize up to 85% of the donor’s cost of certain EHR items and services (the “Final Rules”). The Final Rules amended the 2006 original rule (the “Original Rule”).  The Final Rules:

  • Extend the expiration of the protections from December 31, 2013 to December 31, 2021;
  • Exclude laboratory companies from the list of eligible “Protected Donors” that may donate EHR items and services;
  • Update the provisions under which an EHR donor or recipient can ascertain, with certainty, that EHR is interoperable;
  • Remove requirements that donated EHR include e-prescribing capabilities; and
  • Clarify the requirement prohibiting any action that limits or restricts the use, compatibility, or interoperability of donated EHRs.

SUNSET PROVISION

            Under the Original Rule, EHR donation regulations were set to expire on December 31, 2013.  The Final Rules extend the expiration of the protections until December 31, 2021.

LABORATORY EXCLUSION

            As a change from the Original Rule, the protections under the Final Rules no longer extend to laboratory companies as a type of entity that may donate EHR items and services.  However, this exclusion under the Final Rules does not apply to hospitals who furnish clinical laboratory services through a laboratory that is a department of the hospital.  It should be noted that a hospital-affiliated or hospital-owned company that furnishes laboratory services, which have a billing number assigned to the company as opposed to the hospital, would be excluded from the protections under the Final Rules.

INTEROPERABILITY

The Original Rule required that donated or subsidized software be “interoperable”.  The rule stated that software is interoperable if a certifying body recognized by the Secretary of the Department of Health and Human Services certified the software within 12 months of the time it was provided to a physician.  Under the Final Rules, software is deemed to be interoperable if, on the date it is provided to the physician, it has been certified by a certifying body authorized by the National Coordinator for Health Information Technology to an edition of EHR certification criteria.  Significantly, the protections under the Final Rules are not limited to donations to individuals and entities eligible to participate in the EHR Incentive Programs (the “Meaningful Use Program”), but also extend to other entities and individuals if the donations meet the conditions of the safe harbor.

DATA LOCK-IN AND EXCHANGE

In order to foster the free exchange of data, the Final Rules have made limited clarifications to require that a donor not take any action to limit or restrict the use, compatibility or interoperability of the items or services with other electronic prescribing or EHR systems.  The Final Rules included examples, making it clearer that this prohibition applies to any donor action that limits the use of donated software with any other health information technology.

ELECTRONIC PRESCRIBING

The Original Rule required that donated software contain an electronic prescribing capability.  However, under the Final Rules, effective March 27, 2014, the requirement that the donated software contain an electronic prescribing capability has been eliminated.

THE WINNERS AND LOSERS

The Final Rule attempts to strike the right balance between competing interests.  On the one hand, the Final Rule seeks to foster continued adoption of EHRs and increased interoperability, which are ongoing goals within CMS, ONC and much of the healthcare industry.  On the other hand, OIG has shifted its position to better control risks associated with misuse of EHR donation by certain entities that seek to secure kickbacks.  Recognizing these competing concerns, OIG has extended the safe harbor and improved alignment with ONC to ensure companies have better guidance to meet the interoperability requirements.  Therefore many organizations emerge as winners under the Final Rule, including EHR vendors, protected EHR donors and EHR recipients.  However, laboratory companies are at a significant loss as a result of OIG’s tightening of the definition of “Protected Donor”.

 

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