Federal Government Extends Donated EHR Technology Protections under Stark and AKS through 2021

January 7, 2014 | By Lawrence J. Tabas

Some of the most important protections under the federal Stark Law (“Stark”) and the federal Anti-Kickback Statute (“AKS”) have been those that permit hospitals and other organizations to donate electronic health records (“EHR”) items and services to physicians. Fortunately for physicians, the Centers for Medicare & Medicaid Services (“CMS”) and the Office of Inspector General (“OIG”) recently decided to extend these donated EHR protections for another eight years. First introduced in 2006, these Stark and AKS protections were scheduled to sunset on December 31, 2013. With the expiration date looming, CMS and the OIG published final rules (the “Final Rules”) on December 27, 2013 extending through 2021 the Stark exception and the AKS safe harbor pertaining to the donation of EHR items and services in the hopes of encouraging further adoption of such systems by physicians.

In adopting the Final Rules, CMS and the OIG stated that although “the industry has made great progress in the adoption and meaningful use of electronic health records technology, the use of such technology has not yet been adopted nationwide. Continued use and further adoption of electronic health records technology remains an important goal of the Department.”

In addition to extending the expiration date under Stark and the AKS, the Final Rules address four other issues associated with donated EHR items and services to be effective March 27, 2014:

       1.            CMS and the OIG updated the provision that requires donated EHR technology to work (be interoperable) with other EHR systems in order to qualify for protection under Stark and AKS. Previously, EHR software needed to be certified as interoperable no more than 12 months prior to the date of donation. The Final Rules removed this requirement and allow certification of interoperability based on certain criteria specified by the Office of the National Coordinator for Health Information Technology.

       2.            CMS and the OIG eliminated the requirement that donated EHR software must have prescribing capabilities, recognizing the redundancy and expense of such systems.

       3.            To address concerns that laboratory companies could influence referrals through the provision of donated EHR systems, CMS and the OIG excluded laboratory companies from the list of protected EHR donors.

       4.            The Final Rules clarify the requirement that prohibits a donor from taking any action to limit or restrict the use, compatibility, or interoperability of the donated items or services to physicians. This clarification was made to facilitate the free flow of data between EHR systems.   

The Final Rules illustrate how important the continued use and implementation of EHR systems will continue to be for the foreseeable future. With the help of a donor, physicians who have not yet taken advantage of these regulatory exemptions now have a lengthy window of time to implement EHR technology in their practices.

The Health Law Gurus™ will continue to follow the implementation of the Final Rules. We encourage you to share your experiences and thoughts about the extension of donated EHR protections with us and our readers in the comments section below.

To read the CMS Final Rule, click here.

To read the OIG Final Rule, click here.

About the Authors

Lawrence J. Tabas

Partner

Lawrence is the Chair for Obermayer’s Health Care Law Department and Election Law Practice Group. Lawrence’s Health Care Law legal experience includes the representation of physician group practices (single and multi-specialty), hospitals,...

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