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Proposed Rules Modify Electronic Health Records (EHR) Exception under Federal Anti-Kickback Statute and Stark Law

The federal government issued a set of proposed rules that revise and extend the exceptions under the federal anti-kickback statute (AKS) and physician self-referral law (Stark Law) for certain arrangements that involve the donation of electronic health records (EHR) items and services.  The proposed rules, published yesterday, were released by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the Centers for Medicare and Medicaid Services (CMS).

Stark Law. The Stark Law prohibits a physician from making referrals for certain Medicare-reimbursable services to an entity with which the physician (or an immediate family member) has a financial relationship.  Pursuant to the Stark Law, the entity is prohibited from submitting Medicare claims for the referred services.  The referral and billing prohibitions apply unless the arrangement can meet a Stark exception.

The electronic health records items and services exception, finalized in August 2006, protects the provision of interoperable EHR software certified in accordance with HHS criteria and directly related training services to physicians by an entity, such as a hospital or group practice.  Under this exception, such arrangements are protected from liability under the Stark Law.

Anti-Kickback Statute. The AKS imposes civil and criminal penalties on individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of Medicare-reimbursable business.  “Safe harbor” provisions specify various payment and business practices that are not subject to sanctions.

In August 2006, the OIG finalized a safe harbor similar to the Stark law EHR exception.

Modification to EHR Exception and Safe Harbor. Yesterday’s proposed rules amend the EHR exception under the Stark Law (the CMS rule) and the AKS (the OIG rule) as follows:

  • The sunset date of the exception was extended to December 31, 2016;

  • The requirement that the EHR must contain electronic prescribing capability was removed because subsequent legislation (MIPPA, HITECH, and MMA eRx incentive) and industry progress have addressed electronic prescribing; and

  • The provision under which EHR software is deemed interoperable was updated to reflect the current Office of the National Coordinator certification program for EHR technology.

The extension of the exception and safe harbor is significant in that it allows for continued donation of EHR technology and related training services until the end of 2016.

The proposed rules also solicit comments on a number of additional proposals and clarifications, including: extending the sunset date to December 31, 2021, limiting the scope of protected donors, specifying conditions that will prevent the misuse of the exception in a way that results in data and referral lock-in, specifying conditions that will encourage the free exchange of data, and whether current regulatory text is clear concerning the scope of covered technology.

Lisa Gingerich, Meghan O'Connor, Patrick Cannon, Sarah Platt, Tim McDonald, and William Jackson also contributed to this article. 

©2020 von Briesen & Roper, s.c


About this Author

Daniel Dennehy, Von Briesen Roper Law Firm, Milwaukee, Labor and Employment, Health Care Law Attorney

Daniel Dennehy advises private sector clients, especially health care providers on all aspects of employment, personnel, and labor matters. As part of this advising, he has conducted management seminars, including those for MRA, Wisconsin Society for Healthcare Risk Management (WSHRM), Health Care Mega Conference, Wisconsin Society for Healthcare Human Resources Administration (WSHHRA), American Association of Healthcare Administrative Management (AAHAM), and Society for...

David Edquist, Von Briesen Roper Law Firm, Milwaukee, Corporate, Health Care and Environmental Law Attorney

David Edquist brings a risk management approach to his work with the firm’s health care and business clients that is based on over thirty years of experience in litigating commercial disputes in state and federal courts and before various administrative tribunals.

David advises our health care clients on joint ventures, affiliations, and acquisition agreements; issues facing not-for-profit institutions, including corporate governance and tax exemption; environmental compliance; and physician contracting and patient referral issues, including fraud investigations. In this context, his risk management perspective sharpens the focus on such key compliance areas as Stark, anti-kickback, and other fraud and abuse issues.

Doris Brosnan, Von Briesen Roper Law Firm, Milwaukee, Labor and Employment, Health Care and Immigration Law Attorney

Doris Brosnan is a Shareholder in the firm’s Labor and Employment Law Section, and focuses exclusively on assisting clients with employment issues. Doris regularly advises health care, corporate and public sector clients on dealing with disloyal or difficult employees, accommodating disabilities in the workplace, harassment, workplace violence, FMLA, and the development of effective employment policies and practices. She regularly assists clients in preparing and implementing employee transition plans, including employment due diligence in mergers and acquisitions,...

Jeffrey E. Mark, von Briesen Roper Law Firm, Milwaukee, Healthcare Law Attorney

Jeff Mark is a member of both the Health Care Practice Group and the Business Practice Group. Jeff advises hospitals, multi-institutional health care systems, physician groups and specialty providers regarding a variety of transactional health care related matters including affiliations, acquisitions and divestitures; fraud and abuse; Stark; physician agreements; and equipment and office space leasing arrangements.

Jeff also advises individuals, corporations, and partnerships regarding general corporate transactional matters...