United States: Proposed Rules Seek To Amend And Extend Protections Of The EHR Stark Law Exception And Anti-Kickback Statute Safe Harbor

Last Updated: April 18 2013
Article by Kimberly J. Kannensohn, Holly Carnell and Melesa A. Freerks

On April 10, 2013, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule in the Federal Register that revises the exception to the federal physician self-referral prohibition (Stark Law) for certain arrangements involving the donation of electronic health records (EHR) items and services (the Stark Exception). The Office of the Inspector General of the Department of Health and Human Services (OIG) simultaneously proposed a companion rule revising the safe harbor regulation concerning EHR items and services under the Federal Anti-Kickback Statute (the Safe Harbor). The proposed rules would amend the final rules adopted by CMS and the OIG in 2006, which constituted an effort by the federal government to encourage the adoption of costly EHR systems.

CMS and the OIG are soliciting comments on proposed revisions to the Stark Exception and the Safe Harbor and are requesting feedback regarding certain other changes they are considering.

  1. The Sunset Provision. On Dec. 31, 2013, the Stark Exception and the Safe Harbor are scheduled to sunset. Although the adoption of EHR technology has dramatically risen in the past several years, CMS and the OIG believe there is still a need for donations of such technology and the proposed rules aim to continue promotion of the adoption of this technology by extending the sunset dates to Dec. 31, 2016, or a possible later date such as Dec. 31, 2021, which corresponds with the end of the Medicaid Meaningful Use incentive program.
  2. The Electronic Prescribing Provision. CMS and the OIG propose to delete the electronic prescribing requirement in the Stark Exception and the Safe Harbor, which mandate that donated software must contain electronic prescribing capability, either through an electronic prescribing component or the ability to interface with the physician's existing electronic prescribing system that meets the applicable standards under Medicare Part D at the time the items and services are provided. The agencies observe that since the finalization of the Stark Exception and Safe Harbor in 2006, Congress enacted the Medicare Improvements for Patient and Providers Act (MIPPA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act, both of which contain incentives regarding the use of electronic prescribing. Thus, CMS and the OIG believe there are sufficient alternative policy drivers encouraging the adoption of electronic prescribing capabilities.
  3. The Deeming/Interoperability Provisions. CMS and the OIG propose to revise the interoperability provisions by requiring that the donated EHR technology is "interoperable" as of the date it is provided to the recipient, if it has been certified to any edition of the EHR certification criteria that is identified in the then-applicable definition of "Certified EHR Technology." Currently, the Stark Exception and the Safe Harbor require that the EHR Technology must have been certified within 12 months prior to the date of donation. This revision would more closely align with the ONC certification program established by the federal EHR incentive payment program created under the American Recovery and Reinvestment Act of 2009.
  4. Additional Proposals and Considerations.
    • Protected Donors: In response to concerns about the potential for abuse of the Stark Exception and Safe Harbor by providers and suppliers of ancillary services who do not have a direct and primary patient care relationship and a central role in the healthcare delivery infrastructure, CMS and the OIG seek to either (i) revise the definition of "Protected Donor" to cover only hospitals, group practices, Prescription Drug Plan sponsors and Medicare Advantage organizations or (ii) retain the current definition of protected donors and exclude certain types of donors that CMS and the OIG associate with a high risk of fraud and abuse, such as laboratories, DME suppliers and independent home health agencies.
    • Data Lock-In and Exchange: In an attempt to prevent the misuse of the Stark Exception and the Safe Harbor in a way that results in a method for locking in referrals, CMS and the OIG seek comments on what new or modified conditions could be added to the current rules.
    • Covered Technology: CMS and the OIG seek input regarding whether the definition of "software, information technology and used predominately" for EHR purposes provided in the current regulations is sufficiently clear concerning the scope of covered technology. While the agencies believe the current regulatory text, when read in light of the preamble discussion to the August 2006 final rules, is sufficiently clear, they question whether clarifying language should be added to reflect that certain items or services, for example services that enable the interoperable exchange of electronic health record data, fall within the scope of covered technology.

McGuireWoods is available to assist clients with drafting and submitting comments to CMS or the OIG regarding the proposed rules. Comments are due by 5 p.m. on June 5, 2013. McGuireWoods regularly advises healthcare organizations on compliance with the electronic health records exception and safe harbor.

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.

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