New Safe Harbors and Stark Exceptions for Electronic Prescribing and Electronic Health Records Arrangements
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1 New Safe Harbors and Stark Exceptions for Electronic Prescribing and Electronic Health Records Arrangements November 15, 2006 Steve Nash and Sara Hill, Holme Roberts & Owen LLP Agenda Introduction Background Stark Exceptions Anti-kickback Safe Harbors Issues and Ambiguities Questions
2 New Exceptions and Safe Harbors To reach full HIT interoperability, information must be accessible across patient care settings, including physicians offices and hospitals. Until very recently, hospitals and health systems could not directly or indirectly fund IT systems for physicians without risk of violating the Stark or anti-kickback laws. August 8, CMS and HHS established new Stark exceptions and anti-kickback safe harbors to enable potential donors to provide physicians with information technology for e-prescribing and electronic health records. Stark Law Physician Self-Referral Law: Section 1877 of the Social Security Act Civil statute enacted in 1989 to prevent healthcare providers from inappropriately profiting from referrals Prohibits physicians from making referrals for certain designated health services payable by Medicare to an entity with which the physician (or immediate family member) has a financial relationship, unless an exception applies Prohibits an entity for making claims to Medicare for those referred services, unless an exception applies Violations punishable by denial of payment for claims, refund of amounts collected, and civil monetary penalties
3 Anti-Kickback Statute The Medicare and Medicaid Patient Protection Act of 1987, 42 U.S.C. 1320a-7b Criminal Statute Applies to all who bill for or influence the use of federally funded health services Felony to knowingly and willfully give, receive, offer, or solicit payment for referrals of business reimbursable under any Federal health care program Safe harbors established by regulations Fines up to $25,000 and imprisonment of up to five years, civil monetary penalties, program exclusion, and liability under the False Claims Act HIT Exceptions and Safe Harbors E-Prescribing Exceptions: Congressional mandate of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) EHR Safe Harbors: product of the Bush Administration s direction to facilitate the adoption of EHRs by 2014 Regulations published on August 8, 2006 Final Rule Effective October 10, new anti-kick back safe harbors (OIG) 2 new Stark exceptions (CMS)
4 Stark Exception - Electronic Prescribing 42 C.F.R (v) Hardware, software, or information technology and training services necessary and used solely to transmit and receive electronic prescription information Permissible arrangements: By a hospital to a physician who is a member of its medical staff By a group practice to a physician who is a member of the group By a Prescription Drug Plan sponsor or Medicare Advantage Organization to a prescribing physician Stark Exception - Electronic Prescribing No monetary limit Physician may not make receipt of the donated services or items a condition of doing business with the donor Donor cannot limit or restrict the use or compatibility of the items or services with other electronic prescribing or electronic health records systems Donated service or item must be usable for all patients regardless of payor
5 Stark Exception - Electronic Prescribing Donations cannot be based directly or indirectly on the volume or value of referrals from the potential recipient Donors must not have knowledge that the recipient has any items or services equivalent to those being donated Must comply with Medicare Part D electronic prescribing standards, including interoperability Stark Exception - Electronic Prescribing Documentation requirements: in writing signed by parties specify the items and services being provided identify the cost to the donor of the items and services updated master list Exception does not expire
6 Stark Exception - EHRs 42 CFR (w) Includes electronic health records software or information technology and training services Must be necessary and used predominately to create, maintain, transmit, or receive electronic health records Must include e-prescribing capability that meet applicable Part D standards CPOE not mandated Must be provided to a physician by a hospital or other entity that furnishes designated health care services Stark Exception - EHRs Interoperable software ( ) communicate and exchange data accurately, effectively, securely and consistently exchange data so the clinical or operational purpose and meaning of the data are preserved and unaltered deemed interoperable if a certifying body has certified the software no more than 12 months prior to the date it is provided to the physician May perform additional functions if predominant function concerns EHRs No monetary limit recipients must pay 15% of the donor s cost prior to receipt of items and services
7 Stark Exception - EHRs Donors must not have knowledge that the recipient has any items or services equivalent to those being donated Donor may not restrict use, compatibility, or interoperability of the items or services with other electronic prescribing or electronic health records Does not include staffing (e.g. to populate data base) and cannot be used primarily to conduct personal business Must not violate anti-kickback statute or any Federal or State laws concerning billing or claims submission Stark Exception - EHRs Donations cannot be based directly or indirectly on the volume or value of referrals from the potential recipient Physician may not make receipt of the donated services or items a condition of doing business with the donor Documentation requirements: in writing signed by parties specify the items and services being provided identify the cost to the donor of the items and services updated master list Donations must be made on or before December 31, 2013
8 Safe Harbors Electronic Prescribing 42 C.F.R (x) Non-monetary remuneration that is necessary and used solely to transmit and receive electronic prescription information may include hardware and operating systems Must be compliant with Part D standards at the time of donation, including interoperability Mirrors the Stark exception, but more expansive in scope Recipients: prescribing health care professionals who are members of a practice group, pharmacies and pharmacists receiving items or services from a hospital Only physician members of a medical staff may receive items or services from a hospital Safe Harbor EHRs 42 C.F.R (y) Donors: providers of Medicare or Medicaid covered services who submit claims, or on whose behalf claims are submitted, or health plans Recipients: Any providers of healthcare goods or services Donation must be used predominately to create, maintain, transmit or receive EHRs Mirrors Stark exception in terms of donations and conditions, but slightly more expansive in terms of recipients
9 Safe Harbor EHRs Protected donors: people and organizations that provide health services covered by a federal health program in addition to health plans Protected recipients: people and organizations that provide health care No cost shifting Take Note...Issues and Ambiguities Hospital s tax exempt status may be at risk IRS restricts tax-exempt entities from making donations that do not benefit the public or help further their charitable mission Ambiguous regulations: How are hospitals supposed to calculate the physician s 15% minimum contribution? What is equivalent technology? State preemption? Implementation Barriers Interoperable software Software certification requirement within 12 months prior to the donation No hardware exceptions
10 Thank you. Sara Hill, Steve Nash,
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