HHS Announces Final Exceptions and Safe Harbors to Promote the Adoption of E-Prescribing and E-Health Records Technology
The Department of Health and Human Services (“HHS”) recently announced that on August 8, 2006, it will publish its final e-prescribing and e-health records exceptions to the Federal Stark law and anti-kickback statute safe harbors, each of which will take effect sixty days after their publication. These regulations, which are broader in scope than what was initially proposed and submitted for public commentary by HHS on October 11, 2005 [to view prior bulletin, click here], will permit hospitals and other health care organizations to donate e-prescribing technologies and e-health records technologies to physicians in order to promote the exchange of e-prescribing information and e-health records.
Please note that HHS has made certain revisions to the regulations since their initial proposal on October 11, 2005. HHS has decided to abandon the proposal to have separate safe harbors and exceptions with respect to pre-interoperability and post-interoperability e-health records arrangements. Since the publication of the initial proposal of these regulations, certification criteria for the interoperability of e-health records technology has become available, thereby rendering separate safe harbors and exceptions for pre-interoperability e-health records and post-interoperability e-health records unnecessary. The list of recognized criteria is available by clicking the applicable link at http://www.hhs.gov/healthit . Furthermore, while HHS did not impose a limit on the value of e-prescribing technologies that may be donated, HHS did provide a restraint on the value of the e-health records technologies that may be donated by requiring the recipient to pay for at least 15% of the value of the donated technology. According to HHS, the provision of e-health records technologies to physicians poses a greater risk of fraud and abuse than does the provision of e-prescribing technologies because e-health records technologies are inherently more valuable to physicians in terms of avoided overhead and administrative expenses of an office practice.
The following chart lays out schematically the overall structure and scope of the final exceptions and safe harbors promulgated by HHS.
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EXCEPTIONS / SAFE HARBORS | |
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E-Prescribing Exception/Safe Harbor |
E-Health Records Arrangements Exception / |
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Covered Technology |
Items and services necessary and used solely to transmit and receive e-prescription information. Includes hardware, software, internet connectivity, and training and support services. |
Software necessary and used predominantly to create, maintain, transmit, or receive e-health records. Software must include an e-prescribing component. Software may include functions related to patient administration (such as billing and scheduling software) provided that the core function of the software is to create, maintain, transmit, or receive e-health records. Includes directly related training services. The provision of hardware is not protected under this exception / safe harbor. |
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Required Technology Standards |
Donated technology must comply with final standards for e-prescribing adopted by HHS. The Centers for Medicare & Medicaid Services has adopted the first set of the applicable standards for e-prescribing, which are codified at §423.160 of the Social Security Act. |
Donated e-health records technology must be interoperable, and must comply with the final standards for e-health records technology adopted by HHS, which are available here. The Centers for Medicare & Medicaid Services has adopted the first set of the applicable standards for e-prescribing, which are codified at §423.160 of the Social Security Act. |
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Permissible Donors and Recipients |
Hospitals (to members of their medical staff), group practices (to physician members), prescription drug plan sponsors and Medicare Advantage organizations (to prescribing physicians). The HHS promulgated safe harbor allows for Medicare Advantage organizations to donate to network pharmacists and pharmacies in addition to prescribing physicians. |
Protected donors are (i) individuals and entities that provide covered services and submit claims to any Federal health care program and (ii) health plans. Protected recipients are individuals and entities engaged in the delivery of health care. |
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Selection of Recipients |
Donors may not take into account volume or value of referrals from recipient, or any other business between the parties. |
Donors may not directly take into account volume or value of referrals from recipient, or any other business between the parties. |
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Value of Protected Technology |
No limit on the value of donations of e-prescribing technology. |
Recipient must pay 15% of the donor’s cost for the donated technology. Donor may not finance the recipient’s payment or loan funds to the recipient for use by the recipient to pay for the technology. |
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Expiration of Exception / |
None. |
Exception / safe harbor sunsets on December 31, 2013. |
If you have any questions or would like more information regarding the exceptions and safe harbors described in this article, please contact either David Stephan or another member of the Boult Cummings Health Care Team.