Electronic Health Record (EHR) - Exception Relating to Electronic Prescribing Information

Exception Relating to Electronic Prescribing Information

CMS's regulatory proposal creates an exception to the physician self-referral prohibition in the Stark law for certain arrangements in which a physician receives necessary non-monetary remuneration that is used solely to receive and transmit electronic prescription drug information.

CMS's proposed rule protects the donation of qualifying electronic prescribing technology when the donation is made by hospitals to members of their medical staffs, by group practices to their physician members, and by prescription drug plan sponsors and Medicare advantage organizations to physicians. CMS is considering whether to limit the aggregate fair market value of all items and services provided to a physician from a single donor. CMS believes a monetary limit is appropriate and reasonable to minimize the potential for fraud and abuse, and is soliciting public comment on the amount of the cap.

The proposed exception would protect only items or services that are "necessary" to conduct electronic prescription drug transactions. This might include, for example, hardware, software, broadband or wireless Internet connectivity, training, information technology support services, and other items and services used in connection with the transmission or receipt of electronic prescribing information. CMS believes the exception would allow a hospital to provide a physician with a hand-held device capable of transmitting electronic prescribing information, even though the physician may already have a desktop
computer that could also be used to send the same information. However, the proposed rule would require the physician to certify that items and services provided are not technically or functionally equivalent to those that the physician already possesses or has already obtained.

In addition, to be eligible for the exception, the items and services must be "used solely" for the transmission or receipt of electronic prescribing information. However, CMS is proposing to create an additional exception to protect the provision of hardware and connectivity service that are used for more than one function, so long as a substantial use of the item or service is to receive or transmit electronic prescription information. CMS is soliciting comments on methodologies for quantifying or ensuring that a substantial use of hardware and connectivity services is for the receipt or transmission of electronic prescribing information.

Exception Relating to Electronic Health Records

In addition to the MMA-mandated exception relating to electronic prescribing information, CMS is proposing regulatory exceptions for certain electronic health record information technology and training. CMS intends to protect non-abusive arrangements involving the provision of software and directly related training services that are necessary and used to receive, transmit, and maintain the electronic health records of an entity's or physician's patients. Separate exceptions would apply to donations made before and after the HHS Secretary's adoption of product certification criteria, including criteria for the interoperability, functionality, and privacy and security of electronic health records technology. After certification criteria are approved, the proposed exception will expand for technology meeting the criteria, because the risk of abuse will be lessened and the benefits heightened after interoperability is achieved. CMS is soliciting comments on the proposed standards for these exceptions.


OIG's Proposed Rules
The MMA-mandated Anti-Kickback safe harbor is being implemented in separate rulemaking by OIG.

The Anti-Kickback Statute provides penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under Medicare or Medicaid. The types of remuneration covered specifically include, without limitation, kickbacks, bribes, and rebates, whether made directly or indirectly, overtly or covertly, in cash or in kind. Because of the broad reach of the Anti-Kickback Statute, concern has been expressed that it covers some relatively innocuous commercial arrangements. Accordingly, OIG safe harbor provisions have been developed to limit the reach of the statute somewhat by permitting certain non-abusive arrangements.

Exception Relating to Electronic Prescribing Information

Similarly to CMS's proposed rule, OIG's proposed safe harbor would protect arrangements involving hospitals, group practices, and prescription drug plan sponsors and Medicare Advantage organizations that provide to specified recipients non-monetary remuneration in the form of hardware, software, or information technology and training services necessary and used solely to receive and transmit electronic prescription drug information.

Exception Relating to Electronic Health Records

In addition, OIG is proposing separate safe harbor protection for electronic health records software not covered by the MMA-mandated safe harbor for prescribing. OIG is proposing safe harbors related to electronic health records software and directly related training services that are necessary and used to receive, transmit, and maintain electronic health records of the entity's or physician's patients. Similar to CMS's parallel proposed rule, separate exceptions would apply before and after the adoption of product certification criteria. OIG notes that, unlike electronic prescribing, Congress provided no direction with respect to any safe harbor for electronic health records. Given this, OIG believes they do not now have sufficient information to draft appropriate safe harbor language. OIG is soliciting comments on the proposed scope and conditions for electronic health records safe harbors.

To be assured consideration, written comments on the proposed rules must be received by CMS or OIG no later than 5 p.m. on December 12, 2005. If you wish to review the proposed rules in detail, you may find the full text of CMS's proposed rule here, while the full text of OIG's proposed rule is located here.


Jessica Applegate is an attorney at the Milwaukee office of the law firm Michael Best & Friedrich in the Health Care Practice Group. The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.