Stay up to date on the rules governing EMR donations

While there can be many benefits for physicians who install electronic medical records systems and electronic prescribing systems in their offices, the technology also can add some legal and regulatory risks if doctors aren't careful.

In order to avoid potential pitfalls as you set up your EMR, make sure you continue to monitor the evolving regulatory landscape. You should pay close attention to proposed changes to Stark and anti-kickback statute regulations and the expansion of e-health in order to protect patient confidentiality, EMRs and your practice.

The pitfalls mostly relate to what happens if someone other than you and your practice is paying for an e-health system, and how electronic records are shared. There are efforts to iron out the legal wrinkles related to that kind of situation. The Centers for Medicare & Medicaid Services has proposed new Stark and anti-kickback rules which are intended to create flexibility for health care entities to finance and support e-prescribing and EMR adoption. The enforcement of the Stark self-referral laws and the anti-kickback statute has been identified as a barrier to EMR adoption.

CMS and the Office of Inspector General have responded to congressional direction in the Medicare Modernization Act to create an exception and safe harbor for e-prescribing, by issuing six proposed rules, three Stark self-referral exceptions and the three parallel anti-kickback safe harbors. This column will briefly describe the proposed federal regulations and explore key areas you should address in your contracts when utilizing EMR.

Given the important benefits to patients and the Medicare program of EMRs, the CMS and OIG have considered rules that encourage private financing and support for adoption of EMR systems and adopting definitions, limitations, and conditions that address concerns about program and patient abuse, without being unnecessarily restrictive.

As CMS and OIG note in discussing the proposed rules, group practices can provide e-prescribing technology and EMR to physician members, including independent contractors while working at the group practice, under existing law.

If a hospital or other health care entity provides technology and services at below fair market value that allows nonemployee physicians to create an EMR for patients in their office practices, this would be considered remuneration in violation of the Stark law and anti-kickback statute.

However, if a hospital provides physicians on its medical staff with access to the hospital's EMR to treat patients in the hospital, this is not likely to be considered remuneration.

The proposed e-prescribing and EMR rules are designed to create protection for donations of specified items and services that might be considered remuneration under either the anti-kickback statute or Stark law. The expansion beyond existing law in the proposed rules that is most likely to make a huge impact is that hospitals would be permitted to donate the designated e-prescribing and EMR technology to members of its medical staff.

The measure of success of the final Stark and anti-kickback regulations will be whether such regulations actually free EMR initiatives, financing, and adoption by health care entities from the Stark and anti-kickback constraints that have prevented the donation of EMR and related services to physicians and other health care professionals. If you are transmitting EMRs, you must protect and safeguard patient information and be aware of the proposed Stark and anti-kickback regulations.

As you review how you are using e-health, e-prescribing, and EMR in your practice, it is also advisable to revisit your compliance with the HIPAA security regulations. Carefully review all contracts regarding EMRs including vendor contracts for the provision of information technology services to your practice. In light of the proposed Stark and anti-kickback regulations you should consider the following key issues when reviewing a proposed contract for the implementation, financing, and maintenance of EMRs:

Financing. Determine which entity is directly paying for the EMR adoption. If a hospital or health system is financing the technology and services below fair market value to physicians who are not on the hospital's medical staff, this raises a red flag pursuant to the Stark and anti-kickback regulations. The proposed regulations do not appear to allow donations of technology and services to physician networks, IPAs, and group practices.

Confidentiality and security. Consider how your patients' protected health information will be used and disclosed. Make sure that your contract includes provisions that all parties agree to comply with the HIPAA security rules and applicable state regulations for the use, disclosure, and transmission of electronic protected health information.

System users. Identify who will be utilizing the EMR system. Physician group practices are unable to donate to physicians who are not members of the group or to physician networks or IPAs even if they share patients with those physicians or need to be clinically integrated with physician networks or IPAs in order to negotiate fee-for-service contracts with payers.