Yesterday the Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) published an advance copy of proposed rules that, if adopted as proposed, would extend through at least 2016 the existing Stark Law Exception (42 CFR 411.357(w)) and Anti-Kickback Statute Safe Harbor (42 CFR 1001.952(y)) applicable to the donation of electronic health records (EHR) items and services.  In the proposed rules, CMS and OIG solicit comments on the following proposed changes to the existing electronic health records Exception and Safe Harbor:

• CMS and OIG propose to extend the “sun setting” provisions of the existing Exception and Safe Harbor throughDecember 31, 2016 – the last year in which Medicare Meaningful Use incentive payments are available.  In addition, CMS and OIG indicate that they are considering a further extension through December 31, 2021 – the last year of the Medicaid Meaningful Use incentive payments.  CMS and OIG also solicit comments on whether other sunset date(s) should be considered.

• CMS and OIG identify concerns of potentially abusive practices under the existing Exception and Safe Harbor stemming from the donation of EHR item and services software that seem to provide for the interoperable exchange of information, but instead lead to data and referral “lock-in” between the donor and the referral source.  OIG and CMS specifically refer to EHR items and services donated by providers and suppliers of ancillary services who do not have a direct and primary patient care relationship as subject to this concern.  Accordingly, pursuant to the proposed rules, CMS and OIG seek comments on whether to limit the list of permissible donors of EHR items and services to hospitals, group practices, Prescription Drug Plan sponsors and Medicare Advantage organizations – or others with front-line patient care responsibilities.  CMS and OIG also indicate that they are considering specifically excluding laboratories, DME suppliers and independent home health agencies from the list of permissible donors.

• CMS and OIG also request comments on “new and modified conditions” that would prevent EHR donations from becoming a method for locking-in referrals, and that would encourage the free exchange of data.

• CMS and OIG also solicit comments regarding whether “services that enable the interoperable exchange of electronic health records data” fall within the scope of covered technology and therefore fit with the scope of the Exception and Safe Harbor.  This is an increasingly important issue for hospitals and others establishing HIEs that require connections between the HIE and physicians or group practices that have existing EHRs.  In the proposed rule, CMS and OIG seem to indicate that the current definition is broad enough to cover such services, but do not specifically mention HIE technology as permissible of donation.

• The proposed rules require the donated EHR technology to be “interoperable” as of the date it is donated.  Such technology will be deemed to be interoperable if it has been certified through an authorization process established by the Office of the National Coordinator for Health Information Technology (“ONC”) to any edition of the electronic health record certification criteria under the then applicable definition of “Certified EHR.”  For example, for 2013 the HITECH Act’s definition of “Certified EHR” permits certification pursuant to either the 2011 or 2014 editions of the EHR certification requirements.  For 2014, the HITECH Act requires certification pursuant to the 2014 edition only.

• An EHR would not be required to have electronic prescribing capability in order to be subsidized.  CMS and OIG have concluded that there are sufficient alternative policy drivers supporting the adoption of electronic prescribing capabilities such that it need not be included in the Exception and Safe Harbor.  

Comments will be accepted for 60 days from the publication of the proposed rule in the federal register.  

To view the CMS rule, click here. To view the OIG rule, click here.