Understanding Stark/Anti-Kickback Compliant EHR Donation Arrangements

In 2006 and extended in December 2013, CMS issued Stark and Anti-Kickback exceptions/safe harbors permitting EHR technology donation arrangements between hospitals (and other organizations) and physician groups.  This exception permitted hospitals to aid physician groups, who may be referral sources, in acquiring and implementing EHR and other health information technology.  Originally, hospitals had a seven-year window in which to engage in these donation arrangements, though in December 2013 CMS extended the donation arrangements for an additional 7 years through December 31, 2021.

The arrangement may include the non-monetary donation of “items or services in the form of software or information technology and training services.”  Key components of the exception/safe harbor include:

  • The donation is provided from an entity to a physician.
    • Change in 2013 rules, this entity cannot be a lab.
  • The software is interoperable
    • Change in  2013 rules, software is deemed interoperable if it has been certified as “certified EHR technology” as that term is used by the ONC for the meaningful use/EHR Incentive Program.
  • Donor cannot restrict or limit the use or interoperability of the technology with other eRx or EHR systems.
    • Change in 2013 rules, CMS interprets this rule more broadly by providing a non-exclusive list of the types of technologies that are included in this restriction: “health information technology applications, products, or services.”
  • Physician must pay at least 15% of the costs for the technology (which amount cannot be financed by the hospital).
  • Neither the physician nor the physician’s practice makes the receipt of the technology a condition of doing business with the donor.
  • Neither eligibility of the physician nor the amount or nature of the donation is determined in a manner that takes into account the volume or value of referrals or other business generated between the parties.
  • The donation is set forth in writing, signed by the parties, specifies the items to be provided, the donor’s costs and the physician’s contribution, and covers all EHR items and services to be provided by the donor.
  • The donor cannot have knowledge of or disregard the fact that the physician already possesses equivalent items or services.
  • The donor cannot restrict or limit the physician’s right to use the software for any patient.
  • The donation cannot include staffing of physician offices and cannot be used to primarily conduct personal business or business unrelated to the physician’s medical practice.
    • Note the donation may also include other “software and functionality directly related to the care and treatment of individual patients (for example, patient administration, scheduling functions, billing, clinical support software, etc.” (71 FR 45152).
  • The donation arrangement does not violate the Anti-Kickback statute.
  • The exception expires December 31, 2021.

Beyond crafting a donation arrangement that satisfies both the Stark law exception and Anti-Kickback safe harbor, hospitals and physicians should assess overall technology alignment strategies and the goals and framework for such donation arrangements.  Making sure that clear expectations are set in advance, including understanding implementation, roll out and support, data ownership and extraction, and utilizing the EHR technology for government incentive programs, such as meaningful use, are important topics that should be addressed by the arrangement.

For those interested in learning more about this topic and are currently attending HIMSS14, David Schoolcraft, attorney at Ogden Murphy Wallace, and Michelle Holmes, principal at ECG Management Consultants, are presenting on Wednesday at 10 AM on Using Stark/Anti-Kickback To Support Hospital/Physician IT Alignment Strategies.  For further information about designing a compliant arrangement please contact Elana Zana or Dave Schoolcraft.

 

Stark Law Donation Exception Extended to 2021

Beating the deadline by mere days, CMS and the OIG released their final rules related to the Stark Law exception/Anti-Kickback safe harbor for EHR donation arrangements.  The new rules extend the donation arrangement exception until December 31, 2021.

The new rules become effective 90 days after publication, with the exception of the extension, which is effective on December 31, 2013.  These new rules permit existing donation arrangements to continue to operate beyond December 31, 2013, provided they remain in compliance with the Stark exception and Anti-Kickback safe harbor.

Highlights of this new rule (other than the very important extension to 2021) include:

  • The items/EHR are provided by a company (i.e. a hospital) that is not a laboratory.
  • Software is deemed interoperable if it has been certified as “certified EHR technology” as that term is used by the ONC for the meaningful use/EHR Incentive Program.
  • Elimination of the requirement that the EHR software contain eRx capabilities in order to qualify for the exception.
  • Clarification that the donor cannot limit the interoperability of the donated software with other eRx and EHR systems, which CMS interprets more broadly by providing a non-exclusive list of the types of technologies that are included in this restriction: “health information technology applications, products, or services.”

For more information about drafting donation arrangements or these final rules please contact Elana Zana or Dave Schoolcraft.

To view the HIMSS statement on the extension click here.

SRDP Settlement: Improper EHR Donation Arrangement Among Violations

Last month CMS settled several violations of the self-referral statute (aka Stark Law) with an Ohio hospital, including a failure to appropriately structure a donation arrangement for electronic health records (EHR) .  The hospital disclosed under the Self-Referral Disclosure Protocol that it may have violated the Stark Law with regard to several arrangements with certain physicians, including arrangements for EKG interpretations, medical director services, Vice-Chief of Staff services, and hospital services (no specifics provided in CMS release).  The settlement was for $265,565.  The SRDP, which was included in the ACA, was created as a mechanism for providers to self-report potential Stark law violations.

The EHR donation arrangement to the Stark and Anti-Kickback laws permits hospitals to enter into certain arrangements with physicians for the donation of EHR related software and services.  The donation arrangement exception is scheduled to expire on December 31, 2013, however CMS has proposed extending the exception through 2016.  If CMS does not extend the exception, existing donation arrangements will have to convert to fair market value for shared technology and services.

If you have questions regarding the SRDP or structuring a EHR donation arrangement please contact Elana Zana.