Donated EHRs May Be Allowed Until 2016

9 Mobile EHRs Compete For Doctors' Attention

The Obama administration has proposed that the sunset date for two regulations allowing hospitals and certain other entities to donate electronic health record (EHR) software and services to unrelated physician practices be extended from the end of this year to 2016. The proposed regulatory changes would also affect some other provisions of the current rules, including those related to e-prescribing and interoperability of systems.

The Centers for Medicare and Medicaid Services (CMS) has proposed an extension of the exception to the Stark self-referral rules that allows hospitals and other entities to give independent physician practices up to 85% of the cost of EHRs, as well as connectivity, training, maintenance, and support services. The Office of the Inspector General in the Department of Health and Human Services (HHS) has made a similar proposal regarding an extension of its "safe harbor" exempting such activities from the Anti-Kickback Act (AKA).

The proposals, included in the April 10 Federal Register, provide a 60-day public comment period before CMS and OIG finalize the regulations.

[ Electronic healthcare record systems have a long way to go. Case in point: EHRs Underused For Hospital Infection Reporting. ]

When the Stark exception and AKA safe harbor were formulated in 2006, the Office of the National Coordinator of Health IT (ONC) regarded the approach as a low-risk, inexpensive way to promote EHR adoption, noted Robert Wah, MD, who was then deputy national coordinator of health IT, in an interview with InformationWeek Healthcare. But the passage of the HITECH Act of 2009, which authorized up to $30 billion in incentives for the meaningful use of EHRs, changed the equation by providing an alternative source of financing, said Wah, now global chief medical officer of consulting firm CSC.

"This [proposed regulation] is important, but it's become less of an issue given the HITECH Act," he said. "The dollars available for investment have really changed."

Nevertheless, he added, the government still wants to use every policy lever at its disposal to increase EHR adoption, given that less than half of eligible professionals have attested to Meaningful Use so far.

How much of an impact this might have on increasing adoption is unclear. Only a small percentage of hospitals have taken advantage of the Stark exception/AKA safe harbor over the past seven years, Wah said. However, the Federation of American Hospitals asked the government to extend the time frame of the regulations, according to an article in Modern Healthcare.

The government proposals would drop a portion of the current regulation requiring that donated EHRs include e-prescribing software. CMS said this was no longer necessary because of subsequent developments, including a 2008 law that provides incentives for e-prescribing and the HITECH Act itself, which requires that e-prescribing be part of Meaningful Use.

Another significant change in the CMS proposal concerns interoperability. The current Stark exception states that to qualify for protection, a subsidized EHR must include features that an entity selected by the HHS secretary "deems" as providing interoperability. The new proposal would have ONC select the certifying entities, and qualified EHRs would have to be certified under 2011 ONC rules if they were donated in 2013. If they were donated in 2014, they'd have to be certified under 2014 rules, which are meant to support Meaningful Use stage 2. The 2014 edition includes some important features that expand interoperability, including the ability to exchange messages with other EHRs using the Direct secure messaging protocol.

The government might not stop there. The CMS proposal solicits comments on how to "prevent the misuse of the exception in a way that results in data and referral lock-in," and how to encourage the free exchange of data. In early March, Farzad Mostashari, the national coordinator of health IT, told reporters that it might be possible to expand the Stark exception to remove barriers to information exchange.

The proposals narrow the types of entities that may donate EHRs to physicians. Labs and durable equipment suppliers would be dropped from the list because OIG is concerned about the potential for of the abuse of the AKA safe harbor involving those kinds of entities. But hospitals, physician groups, Part D prescription drugs plans and Medicare Advantage plans would still be allowed to subsidize EHRs.

Finally, CMS asked for input on whether to extend the regulations beyond 2016, perhaps as far as 2021. The Dec. 31, 2016 sunset date was selected to coincide with the timetable for the Meaningful Use program, which ends that year. But CMS pointed out that there could be value in allowing EHR subsidies beyond 2016 to long-term-care facilities and behavioral-health providers, which are ineligible for Meaningful Use incentives.

The expiration date might also be extended further to address the emergence of new healthcare delivery models such as accountable care organizations, Wah noted. "As we change care delivery structures, that's going to lead to different relationships between hospitals and physician offices. So this safe harbor might well fit into that evolution."

Regulatory requirements dominate, our research shows. The challenge is to innovate with technology, not just dot the i's and cross the t's. Also in the new, all-digital The Right Health IT Priorities? issue of InformationWeek Healthcare: Real change takes much more than technology. (Free registration required.)