Publications: New Safe Harbors Published Today Allow Hospitals and Other Health Care Providers to Give Information Technology to Referral Sources

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The Department of Health and Human Services has issued a final rule establishing two new federal safe harbors to the federal Anti-Kickback Statute (AKS) allowing hospitals and other health care providers to give electronic health records technology and electronic prescribing technology to physicians and other health care providers and entities.

Electronic Health Records (“EHR”) Safe Harbor –

Allows gifts of software, information technology and training services (but not hardware), provided the following conditions are met:

• The EHR software is predominantly used to create, maintain, transmit or receive electronic health records.
• The EHR technology is given to an individual or entity engaged in the delivery of health care.
• The EHR technology is given by a health plan or by an individual or entity that provides services covered under Medicare or Medicaid.
• The EHR software must be interoperable, meaning that it must be able to “communicate and exchange data accurately, effectively, securely and consistently with different information technology systems, software applications, and networks, in various settings, and exchange data such that the clinical or operational purpose and meaning of the data are preserved and unaltered.” Software is automatically considered interoperable if it is certified by a body recognized by the Secretary of the Department of Health and Human Services within the twelve months prior to the gift.
• The EHR software must contain electronic prescribing capability.
• Entities giving the EHR technology may not take into account the volume or value of referrals of the recipient or other business generated between the parties and may not condition the gift on referrals or other business.
  Recipients must pay fifteen percent (15%) of the cost of the items or services prior to receiving the gift. Entities providing such gifts may not loan the recipient the money to pay the required 15% of the cost.

Protects arrangements involving gifts of hardware, software or information technology
and training, provided the following conditions are met:

• The EP items and services are solely used to receive and transmit electronic prescription information.
• The EP technology is given by (i) a hospital to a physician who is a member of its medical staff, (ii) a group practice to a prescribing health care professional who is a member of its group practice, and (iii) a prescription drug plan (PDP) sponsor or Medicare Advantage (MA) organization to pharmacists and pharmacies participating in the sponsor’s or organization’s network and to prescribing health care professionals.
• The EP technology must be a part of an electronic prescription drug program that meets the standards under Medicare Part D.
• As with the EHR safe harbor, entities giving the EP technology may not take into account the volume or value of referrals or condition the gift on generating business between the parties.

Please note that if hospitals and health care entities are considering these arrangements, they must be contained in a written contract that (i) is signed by both parties, (ii) specifies the technology being given and the cost of the technology to the entity giving it, and (iii) covers all of the technology being provided.

The new regulations, which will be codified at 42 CFR § 1001.952(x) and (y), are published in the Federal Register today (August 8, 2006) and go into effect October 10, 2006. Our health care attorneys have significant experience in counseling clients and drafting documents that comply with AKS and its safe harbors.