Medical Device Daily Washington Editor

WASHINGTON - The Department of Health and Human Services (HHS) has finished its work on final regulations to allow doctors' offices to boost their health information technology (HIT) systems with the help of hospitals and other entities.

Thanks to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, physician practices that cannot afford to purchase updates for hardware and software can now accept assistance from hospitals and other donor organizations in the pursuit of implementing electronic health record (EHR) systems and electronic prescribing (e-prescribing).

HHS secretary Michael Levitt stated that the final rules, which will take effect 60 days after publication - presumably Sept. 30 - should "help physicians get these systems in place and working for patients faster."

According to the Aug. 1 press statement, both the HHS Office of Inspector General (OIG) and CMS have published documents to address their responsibilities in this endeavor. Many of these regulations are scheduled to expire on Dec. 31, 2013 (President Bush's 2003 call for adoption of electronic health records recommended that the task be completed by 2014). One exception to the safe harbor expiry is donations of e-prescribing technology.

The CMS rules deal with the self-referral dilemma implicit in any HIT donor/donee relationship. Up to now, doctors could not refer patients to hospitals and other entities for so-called designated health services (DHSs) when a financial relationship existed. The law also banned the practice of billing CMS for such referrals as a Medicare service.

The OIG rule established a pair of new safe harbors under existing federal anti-kickback statutes, specifically allowing donor hospitals and other entities to provide doctors' offices with e-prescribing and EHR technologies. In order to qualify for the safe harbor, any donated hardware or software must offer interoperability, a feature that has long been a sticking point in efforts to bring various segments of the healthcare industry into the Information Age.

Doctors' offices cannot expect a free ride on every upgrade and new installation of computer technology, however.

The OIG final rule calls for recipients to contribute at least 15% of the cost of the EHR technology items and related services. However, donees are not required to incur any costs in connection with e-prescribing technology.

For its part, OIG informs interested parties that they can "use the OIG advisory opinion process . . . to determine whether their particular arrangements would be subject to OIG sanctions.

OIG also advised that "arrangements that do not comply with the electronic prescribing safe harbor . . . will not necessarily be illegal under the anti-kickback statute."

Among the expectations of e-prescribing is that physicians and pharmacies will be able to more readily substitute generic drugs and other alternatives to a prescribed medication, which, it is hoped, will drain off some of the impetus behind the ongoing rise in healthcare costs.

Another hoped for benefit is that medical errors will be reduced significantly, thanks to the lower error rate of electronic information exchange as compared to hand-written records and prescriptions. The size of the "paperwork" component of administrative work may also shrink with the increased use of computer technology.

Many observers see problems with privacy in the increased use of computers in healthcare, but such concerns are not universal.

In testimony at a June 21 hearing before the Senate Commerce, Science and Transportation Committee, Mark Leavitt, MD, the chair of the Certification Commission for Healthcare Information Technology , said that privacy concerns are "a knee-jerk reflex" (Medical Device Daily, June 26, 2006).

He argued that Internet purchases are an everyday event and that while "paper cannot tell you who has looked at it," audit trails can identify observers of files, even on the Internet.

According to the press statement, CMS administrator Mark McClellan said that the HIT rules "will improve care by giving doctors and other healthcare providers needed support for interoperable health records that enable them to increase quality and improve efficiency." He also remarked that Medicare "plays a critical role in this important initiative, and we are committed to its success."

Also quoted in the press release was HHS Inspector General Daniel Levinson, who stated that "[t]hese important regulations will help promote the adoption of essential health information technology while protecting the federal health care programs and beneficiaries from fraud and abuse."

Tom Leary, director of federal affairs, with HIMSS, told Medical Device Daily that "[w]e're pleased that the government has released the regulations expanding Stark and anti-kickback exemptions with a general focus on e-prescribing and electronic health records. We're reviewing the changes in the final rule and look forward to evaluating the impact on all our members, both end users at the hospitals and vendors as well."