CMS, OIG Propose Extending Safe Harbor for EHR Donations

Despite concerns from some lab and pathology industry groups, the Centers for Medicare and Medicaid Services (CMS) has proposed a rule that would extend the safe harbor exception for donations of electronic health records (EHRs) until Dec. 31, 2016. The safe harbor is scheduled to expire at the end of 2013. Under the EHR safe harbor, pathology providers, laboratories, and other permitted donors can subsidize the cost of compliant EHR technology for referring physicians at up to 85 percent of the cost of such technology. The CMS proposed rule would extend the sunset date for EHR exceptions under the Stark law while the Office of Inspector General (OIG)-proposed rule would extend the sunset date for the anti-kickback safe harbor, among other provisions. The proposed rules were published in the April 10 Federal Register. Comments are due June 7. The exception was originally intended to prevent donations of EHR technology to providers from running afoul of the Stark law. The 2013 date was selected because it was thought the need for EHR donations would decrease by then. “However, while the industry has made great progress, use of such technology has not yet been universally adopted nationwide, and continued electronic health record technology adoption remains an important departmental goal,” said CMS in the proposed rule. The 2016 date was chosen because it is the last year providers can receive Medicare EHR incentive payments and the last year providers can start participating in the Medicaid EHR incentive program. Considerable Controversy The EHR donation exception and safe harbor have generated considerable controversy since their publication in 2006. While everyone in health care would agree that widespread adoption of EHR technology is an important goal, there is disagreement regarding whether the exception and safe harbor are a good idea, notes Karen Lovitch, an attorney with Mintz Levin (Washington, D.C.). “The College of American Pathologists (CAP) has previously urged OIG to reconsider its inclusion of laboratories as protected donors, and the American Clinical Laboratory Association (ACLA) has questioned whether the safe harbor and exception are needed now that physicians who engage in ‘meaningful use’ of EHR technology can qualify to receive incentive payments from the government,” Lovitch writes in a blog, www.healthlawpolicymatters.com. CAP’s position on the safe harbor is that clinical laboratories are effectively coerced by the competitive market into underwriting EHR donations as an improper inducement for physician practices to refer patients. “The financial benefits conferred on the physician practice that receives such donations may effectively influence medical decisionmaking and the choice of laboratory providers,” says CAP in an issue brief. “Consequently, these arrangements may result in laboratory selection that is not optimal for the patient population served and may engender business relationships that generate overutilization of laboratory services.” A number of states have issued rulings that limit or forbid clinical laboratory EHR donations. Federal safe harbors do not preempt or displace state anti-kickback laws and regulations, so labs and pathology groups need to be aware of the state rulings in this area. Among the states that have imposed such limits are Tennessee, Washington, Pennsylvania, Missouri, New Jersey, New York, and West Virginia. If the OIG decides to extend the federal protection for EHR donations, other states may follow suit, notes Lovitch. Jane Pine Wood, an attorney with McDonald Hopkins (Dennis, Mass., office) who represents many pathology practices, says this proposal if finalized would continue to force pathologists and labs to shell out money to physicians just to keep their referral sources. She urges pathologists and laboratories to submit comments to CMS and OIG urging that the safe harbor not be extended. Interoperability The CMS proposed rule would also update a provision in the exception that protects donated EHR systems that are deemed interoperable from violating the Stark law. Currently, an EHR system can qualify for the Stark exception if a recognized certifying agency considers the EHR interoperable no more than 12 months before it is given to a provider. The proposed rule would clarify that the Office of the National Coordinator for Health Information Technology is responsible for recognizing certifying agencies and would remove the 12-month time frame from the exception. “Accordingly, we propose that software would be eligible for deeming if, on the date it is provided to the recipient, it has been certified to any edition of the electronic health record certification criteria that is identified in the then-applicable definition of certified EHR technology in 45 CFR part 170,” the proposed rule said. It would also remove a requirement that donated EHRs must contain electronic prescribing capabilities to qualify for a Stark law exception. CMS said the health care industry has made substantial progress in implementing e-prescribing, obviating the need for its inclusion in the Stark law exception.