CMS and OIG Propose Extension of Federal Stark Exception and Anti-Kickback Safe Harbor for Electronic Health Record Donations

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On Wednesday, April 10, 2013, the Centers for Medicare & Medicaid Services (“CMS”) and the Office of the Inspector General (“OIG”) of the Department of Health and Human Services published complementary proposed rules in the Federal Register. The rules, if adopted, would extend the federal physician self-referral (“Stark”) law exception and anti-kickback statute (“AKS”) safe harbor for the donation of eligible electronic health record (“EHR”) items and services (the “EHR Donation Rules”). The EHR Donation Rules, which have enabled physicians to receive partially subsidized EHR items and services through “donations” from hospitals, group practices, and other entities since October 10, 2006, are set to expire on December 31, 2013. The proposed rules seek to extend the EHR Donation Rules until at least December 31, 2016, as well as to revise certain other requirements.

The EHR Donation Rules were originally created as part of the federal government’s efforts to promote the use of interoperable EHR technology. They enabled hospitals, group practices, laboratory companies, durable medical equipment suppliers, and other entities to partially “donate” eligible EHR items and services to physicians through subsidies. Finalized in regulations published in the Federal Register on August 8, 2006, the EHR Donation Rules established parallel requirements in order for arrangements to qualify for the safe harbor and exception. Among other requirements, the donated EHR software must be “deemed” interoperable within twelve months of the donation, the physician recipient must contribute at least 15% of the total cost of all donated items and services, and the physician recipient must not make receipt of the items or services a condition of doing business with the donor. The proposed rules both extend the EHR Donation Rules and modify certain requirements, as discussed in more detail below. Comments on the proposed rules are due by June 7, 2013.

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