Negotiating Standard Terms and Conditions/Best Price Arrangements with EHR Vendors

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1 Negotiating Standard Terms and Conditions/Best Price Arrangements with EHR Vendors Gerry Hinkley Co-Chair, Health Care Industry Team Pillsbury Winthrop Shaw Pittman LLP National REC and HIE Summit West October 4 6, 2010 San Francisco

2 Overview EHR Acquisition in an REC (don t say Wreck ) Context RECs are changed to Identify two or more certified EHR products that they have fully evaluated Assist in identifying the product that is a best match for a providers needs Assist the providers in achieving effective implementation Enhancing clinical and administrative workflows to improve quality and value of care, including patient experience as well as outcome of care Observing and complying with applicable legal, regulatory, professional and ethical requirements to protect the privacy and security of health information Achieving exchange of health information in compliance with applicable statutory and regulatory requirements, and patient preferences. 2

3 Overview the REC Opportunities RECs present the opportunities to enable comparison shopping achieve best pricing streamline procurement streamline implementation training data transfer work flow redesign implement minimum necessary help provider empower consumers understand privacy practices access to information actively engage in their care 3

4 REC as Group Purchasing Organization What do big purchasers do? Do business on their own terms Have a systematic procurement policy and process Utilize a standard software license and services agreement Impose a vendor code of conduct Impose a vendor confidentiality standard RECs provide the opportunity for providers to do business this way 4

5 Standard of Confidentiality Beyond the Business Associate Vendor will not process or otherwise use any personal information for any purpose other than performing the specified services for Customer and as instructed by Customer Any personal information collected or accessed by Vendor in the performance of the specified services shall be limited to that which is necessary to perform such services or to fulfill any legal requirements If the services involve the collection of personal information directly from individuals, such as through a registration process or a webpage, Vendor will provide a clear and conspicuous notice regarding the uses of the personal information, which notice shall be consistent with the provisions of the agreement between Vendor and Customer 5

6 Standard of Confidentiality Beyond the Business Associate 2 No terms of use, privacy statement or other provisions presented to individuals via a webpage or in any other manner shall alter the Vendor's obligations or rights under this Standard or the manner in which the Vendor may use personal information. Vendor shall not transfer the personal Information across any national borders or permit remote access to the personal information from third party unless such transfer or remote access conforms to the Electronic Security Standard Vendor shall adhere to the Physical Security Standard Vendor shall adhere to the Data Access Standard 6

7 Vendor Rules of Conduct Always engage the REC representative in any procurement activity Restrain from offering gifts, entertainment or favors to Customer employees or their families. Gifts and entertainment include, but are not limited to items such as, tickets to sporting events and invitations for participation in activities such as golf Restrain from offering to pay for meals unless for a specific business purpose with an appropriate opportunity for Customer to reciprocate. Meals must be of reasonable cost (not lavish) 7

8 Vendor Rules of Conduct 2 Restrain from offering to pay for Customer employees and/or family members travel, lodging, and/or entertainment associated with meetings or seminars Restrain from holding meetings with Customer employees at locations that may be perceived as inappropriate by the business community 8

9 Toward a Simplified License and Services Agreement The EHR industry is languishing in a miasma of complicated documents and indecipherable exhibits What is a miasma -- a vaporous exhalation believed to cause disease License Agreement Services Agreement Purchase or Delivery Order Statement of Work $$$$$$$$$$$$$$$ 9

10 Standard Terms and Conditions Acceptance Acceptance Testing Documentation Installation Products Services Software Specifications Update/Release 10

11 Standard Terms and Conditions 2 Scope of license Sublicensing Source code Ownership of products by Vendor Limitations on Customer: reverse engineer, secure storage, unauthorized reproduction Invoices Fees and charges Warranty of functionality Infringement warranty 11

12 Group Pricing Issues What do GPOs do? Better prices for customers Improve quality, reliability, and service for members purchasing activities Improve products and services Steps to avoid antitrust enforcement Market power (35-40% of market is safety zone) Avoid potential for price-fixing collusion among purchasers if goods purchased are substantial part of overhead (> 20% of revenues) Limit member information that is gathered and shared to avoid collusive overflow Emphasize pro-competitive benefits of GPOs in helping members to reduce costs, maintain or expand offerings and charge lower prices Develop antitrust guidelines and training for customers 12

13 Take Aways RECs provide opportunities for providers to participate in group purchasing to improve pricing services products RECs have the potential to improve documentation improve the vendor-customer relationship improve the provider-patient relationship 13

14 14 The purpose of this presentation is to inform and comment upon recent developments in health law. It is not intended, nor should it be used, as a substitute for specific legal advice legal counsel may only be given in response to inquiries regarding particular situations.

15 Contact Information Gerry Hinkley Pillsbury Winthrop Shaw Pittman LLP 50 Fremont Street San Francisco, CA Direct: (415)