Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General of the Department of Health and Human Services (OIG) posted final rules for additional exceptions to the Stark prohibitions against physician self referrals. The agencies also posted final rules for safe harbors under the federal anti-kickback statute relating to donations of e-prescribing and interoperable electronic health record (EHR) systems to referral sources. The exceptions and safe harbors enable hospitals, group practices, prescription drug plan sponsors and Medicare Advantage organizations to provide certain technology and other non-monetary remuneration to their medical staffs, physician members and physicians, respectively, under specified conditions.

The following chart summarizes the proposed exceptions and safe harbors.

Basic Features

E-Prescribing

EHR

Authority

Medicare Prescription Drug, Improvement and Modernization Act of 2003, § 101

Social Security Act, §§ 1128B(b)(3)(E) and 1877(b)(4)

Covered Technology

Items and services that are necessary and used solely to transmit and receive electronic prescription information

Includes hardware, software, information technology and training services

Items and services that are necessary and used predominantly to create, maintain, transmit or receive electronic health records

Includes software or information technology and training services (but not hardware)

Must have an e-prescribing component

Standards with which Donated Technology Must Comply

Must comply with foundation standards for e-prescribing as adopted by the Secretary of the Department of Health and Human Services (DHHS) at the time the items and services are provided

Software must be interoperable

Software is deemed interoperable if certified within 12 months prior to donation by certifying body recognized by the Secretary of DHHS

E-prescribing component must comply with foundation standards for e-prescribing as adopted by the Secretary of DHHS at the time the items and services are provided

Permissible Donors

Both the Stark Exception and the Anti-Kickback Safe Harbor

Hospitals—to physician members of their medical staffs

Stark Exception

Group practices—to physician members

Prescription Drug Plan (PDP) sponsors and Medicare Advantage organizations—to prescribing physicians

Anti-Kickback Safe Harbor

Group practices—to prescribing health care professional members

PDP sponsors and Medicare Advantage organizations—to network pharmacists and pharmacies and prescribing health care professionals

Stark Exception

An entity that bills Medicare for Stark’s designated health services (subject to certain exceptions)—to a physician

Anti-Kickback Safe Harbor

An individual or entity that provides services covered by a federal health care program and submits claims or requests for payment, either directly or through reassignment, to the federal health care program, or a health plan—to an individual or entity engaged in the delivery of health care

Selection of Recipients

Donors may not take into account the volume or value of referrals from the recipient or other business between the parties

Donors may use selection criteria that are not directly related to the volume or value of referrals or other business between the parties

Costs

No cap on value donated or cost-sharing

No cap on value donated, but physician must pay 15% of donor cost for the items and services prior to receipt

 

CMS and OIG have imposed conditions to guard against abuse. For the provision of e-prescribing items and services, these conditions include:

  • The donor cannot limit or restrict use or compatibility of items or services with other e-prescribing or EHR systems.
  • For items and services that can be used for any patient regardless of payor status, the donor cannot limit or restrict the physician’s right or ability to use the items and services for any patient.
  • The physician or physician’s practice cannot make receipt of items and services a condition of doing business with the donor.
  • The arrangement must be set forth in a written agreement (signed by the parties) that specifies the items and services to be provided and the donor’s cost and covers all of the items and services the donor will provide.

The donor has no actual knowledge of, and does not act in reckless disregard or deliberate ignorance of, the fact that the physician possesses or has obtained items or services

  • equivalent to those provided by the donor.

For the provision of EHR items and services, the following conditions apply in addition to those listed above:

  • The software must be interoperable, as defined at 42 CFR 411.351, and certified as interoperable within the 12 months prior to the date of provision by a certifying body recognized by the Secretary of DHHS.
  • The donor cannot restrict or limit interoperability of the items or services with other e-prescribing or EHR systems.
  • Items and services may not include staffing the physician’s office and may not be used for personal business or business unrelated to physician’s medical practice.
  • The software must have an e-prescribing capability or be capable of interfacing with the physician’s existing e-prescribing system.
  • The transfer of the items and services must occur on or before December 31, 2013.

Notices concerning certification standards for EHRs and guidance for the recognition of certifying bodies were published in the Federal Register on August 4, 2006. We are continuing our analysis and will keep you apprised of significant developments relating to health information technology.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.