On August 1, HHS Secretary Mike Leavitt announced final regulations that will support physician adoption of electronic prescribing and electronic health records technology. The final rules released by the Centers for Medicare & Medicaid Services (CMS) and the HHS Office of Inspector General (OIG) create new exceptions and safe harbors to two key Federal fraud and abuse laws. In announcing the rules, Secretary Leavitt noted: "Electronic health records help doctors provide higher quality patient care, improved efficiency and with less hassle. By removing barriers, these regulation changes will help physicians get these systems in place and working for patients faster." Together, the CMS and OIG final rules announced today represent a unified effort to advance HHS Secretary Leavitt's goal to improve health care through the use of electronic prescribing and electronic health records. "These final rules will improve care by giving doctors and other health care providers needed support for interoperable health records that enable them to increase quality and improve efficiency," said CMS Administrator Mark B. McClellan, M.D., Ph.D. "Medicare plays a critical role in this important initiative, and we are committed to its success." The CMS final rule establishes two new exceptions to physician self-referral prohibitions (aka the Stark law), which prohibit physicians from referring patients for designated health services furnished by entities with which the physician (or a close family member) has a financial relationship, unless an exception applies. The law also prohibits an entity providing Medicare services pursuant to a prohibited referral from billing for those services. The first exception (required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)) establishes conditions under which hospitals or certain other entities may donate to physicians hardware, software, or information technology and training services used for electronic prescribing. The second exception establishes conditions under which entities may donate interoperable electronic health records software, information technology and training services to physicians. The scope of donors allowed under the second exception is considerably broader than in the proposed rule published in October 2005. CMS received comments from 75 organizations during the 60-day public comment period on the proposed rule. The OIG final rule parallels CMS' rule in establishing two new safe harbors for arrangements involving the donation of certain technology and services related to electronic prescribing and electronic health records. Arrangements meeting the parameters of the safe harbors will be protected from enforcement actions under the Federal anti-kickback statute. As with the CMS rule, the scope of the electronic health records safe harbor is considerably broader than the OIG had originally proposed. To reduce the potential for abusive arrangements, the self-referral exception and anti-kickback safe harbor for the donation of electronic health records systems require physicians receiving such donations to pay 15 percent of the donor's cost for the technology. In addition, consistent with the President's goal for adoption of electronic health records systems by 2014, this exception and safe harbor will sunset on December 31, 2013. The two final rules went on display at the Federal Register today and will be published on August 8.
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