The Centers for Medicare & Medicaid Services and the U.S. Department of Health and Human Services issued proposed rules that would extend the sunset date for the Stark Law exception and the federal Anti-Kickback Statute safe harbor for the “donation” of electronic health record items and services to physicians and other referral sources from December 31, 2013, to December 31, 2016.

On April 10, 2013, the Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) issued closely coordinated proposed rules that would extend the sunset date for the Stark Law exception (Exception) and the federal Anti-Kickback Statute safe harbor (Safe Harbor) for the “donation” of electronic health record (EHR) items and services to physicians and other referral sources from December 31, 2013, to December 31, 2016, as well as make certain other changes. 

View the CMS proposed rule here.  View the OIG proposed rule here.  CMS and the OIG are accepting comments to the proposed rules until 5:00 pm EDT on June 10, 2013.

Extension of Sunset Date

CMS and the OIG propose to extend the sunset date to December 31, 2016.  If finalized, the amended Exception and Safe Harbor will continue to permit hospitals and other “donors” to make payments of up to 85 percent of the cost of acquiring certain EHR items and services (such as EHR license fees or implementation services) for a physician or other donation recipients through the end of 2016 without incurring liability under the Stark Law or Anti-Kickback Statute.  CMS and the OIG also solicited comments regarding whether they should set a later sunset date, such as December 31, 2021, which is the expiration date of the Medicaid EHR Incentive Program.

Interoperability Requirement

The current Exception and Safe Harbor require donated EHR software to be interoperable with other EHR software at the time of the donation and deem EHR software to be interoperable if a certifying body recognized by HHS has certified the software no more than 12 months prior to the date it is provided to the donation recipient.  The proposed rules would make two changes to the interoperability requirement that would reflect the current HHS Office of the National Coordinator for Health Information Technology (ONC) program for certifying EHR technology for the Medicare and Medicaid EHR Incentive Programs.

First, the proposed rules would reflect that the ONC is the HHS agency responsible for authorizing certifying bodies.  Second, they would modify the interoperability requirement to provide that EHR software may be deemed interoperable if on the date that the software is provided to the recipient it has been certified to any edition of the ONC’s EHR certification criteria that is current, based on the definition of Certified EHR Technology in the Medicare and Medicaid EHR Incentive Program regulations.  For example, in 2013, the 2011 and 2014 editions of the ONC’s EHR certification criteria are current.

Electronic Prescribing Requirement

The current Exception and Safe Harbor require donated EHR software to include electronic prescribing capability, either through an electronic prescribing component or the ability to interface with the physician’s existing electronic prescribing system that meets then-current Medicare Part D standards.  The proposed rule would delete this requirement because CMS and the OIG concluded that e-prescribing is satisfactorily addressed by the Medicare E-Prescribing Incentive Program and the Medicare and Medicaid EHR Incentive Programs.

Protected Donors

CMS and the OIG expressed concern that laboratory companies, durable medical equipment suppliers, home health agencies and other ancillary service providers that do not have a direct and primary patient care relationship and central role in the health care delivery system are using EHR donations to lock in referrals.

To address this concern, the agencies are considering limits on the types of individuals and entities that may make donations protected by the Exception and Safe Harbor.  One amendment under consideration would revise the Exception and Safe Harbor to allow donations only by hospitals, group practices, prescription drug plan sponsors and Medicare Advantage organizations, which are the donor categories mandated by the Medicare Modernization Act.  The agencies are particularly concerned about donations by laboratory companies as their donations have been the subject of complaints.

Data Lock-in and Exchange

The agencies also are considering new or modified Exception and Safe Harbor requirements that would prevent their use to lock in referrals and would encourage the free exchange of data (consistent with protections for patient information privacy).

Next Steps

Donors and recipients of EHR technology under the Exception and Safe Harbor should consider submitting comments to CMS and the OIG by the June 10 deadline.

Additionally, in light of the potential extension of the sunset date, organizations with EHR donation programs should consider whether they want to extend the programs through 2016 (or potentially a later sunset date).  Laboratories and other individuals and entities should prepare for the possibility that they might lose their status as protected donors under the Exception and Safe Harbor, and begin considering whether other approaches to donating EHR to referral sources could qualify for a Stark exception and otherwise manage the risk of liability under the federal Anti-Kickback Statute.