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Eliminating Legal Barriers to

Technology Cost-sharing

Health care providers, including
physicians, are essential
participants in the government’s

effort to accelerate the adoption
of electronic prescribing (eRX) and

electronic health records (EHR)
technology needed to modernize and
streamline the health care system.
BY SANDRA GREENBLATT

owever, the cost of purchasing ISD must be provided to any physician
and implementing this new tech- or provider by an entity that provides
Hnology is an immense barrier for and bills Medicare for covered services
many physicians and small providers. [including DHS]; (iii) software is inter-
Existing fraud and abuse laws previously operable and includes eRX capability
prevented third party contributions and meeting Medicare Part D standards; (iv)
cost-sharing. Recognizing this, the donor cannot restrict ISD use, compati-
Department of Health and Human bility, interoperability with other
Services issued final regulations in EHR/eRX systems, or use for patients
August 2006 creating new Stark Law regardless of payor; (v) recipient’s ISD
exceptions and new Safe Harbor regula- eligibility, amount or nature is not direct-
tions under the Medicare/Medicaid Anti- ly based on volume or value of referrals
Kickback Statute that now permit larger or business with donor [includes deter-
stakeholders to subsidize the cost of mination methods that are deemed not
adopting eRX and EHR technology. to be based on volume/value]; (vii) no
These new federal regulations permit donor actual knowledge, deliberate igno-
only the donation of non-monetary rance nor reckless disregard of recipient’s
financial support to providers and, while possession of equivalent ISD; (viii)
similar, are not identical. The Stark requires a signed written agreement cov-
exceptions apply only to physicians, ering all ISD, revealing the donor’s cost
while the Safe Harbors apply to a broad- of ISD and recipient’s contribution (min-
er range of health care providers. In gen- imum 15%); (ix) donor cannot shift ISD
eral, the new eRX Stark exception AND costs to any federal health care program;
the Safe Harbor for eRX require satisfac- (x) the ISD arrangement must not violate
tion of multiple conditions, including other laws [Stark only]; and (xi) all con-
that (i) items and services donated (ISD) ditions are met and transfers of ISD must
must only consist of necessary hardware, be made before December 31, 2013.
software, or IT and training services that These new regulations cover a broad
are used solely to receive and transmit scope of donors and recipients and
eRX information in a drug program that require careful analysis by all parties
meets Medicare Part D standards; (ii) with their health law attorneys to ensure
ISD must be provided only by a hospital compliance both before and during
to physician members of its medical implementation of any specific eRX
staff; by a group practice to a member and/or EHR donation or cost-sharing
(owner or employee) of the group; or by plan. Although not simple, these new
a prescription drug plan sponsor or regulations go a long way, by removing
Medicare Advantage organization to net- some significant legal barriers, to assist
work pharmacists/pharmacies and to the various stakeholders in the health
prescribing professionals; (iii) an ISD care industry, including hospitals, phar-
donor cannot restrict use or compatibili- maceutical companies, third party pay-
ty of ISD with other EHR/eRX systems, ors and larger providers, to come togeth-
or for any patient, regardless of payor; er and share resources so that physician
(iv) receipt of ISD a not a condition of practices and other smaller health care
doing business with donor; (v) recipi- providers, essential to the system, can
ent’s eligibility, amount or nature of ISD afford the necessary technology to
is not based on the volume or value of improve efficiency and reduce the cur-
referrals to donor; (vi) no donor must rent paperwork burden in the system.
have actual knowledge, or act with delib- The result of these technology-driven
erate ignorance or reckless disregard that improvements has been shown to lower
the eRX recipient possesses equivalent the cost and to raise the quality of health
ISD; and (viii) the parties must sign a care services, a worthy goal essential to
written agreement covering all ISD that the future success of our health care sys-
reveals the donor’s cost of ISD. tem, for us all.
The EHR Stark Exception AND Safe
Harbor are more complex, do not allow Sandra Greenblatt is a Board Certified
donation of hardware, require recipients Health Lawyer and President of the health
to pay at least 15% of the donor’s cost of law firm of Sandra Greenblatt, PA in Miami,
ISD and require the parties to meet the FL. She can be reached at (305) 577-9995
following conditions: (i) ISD includes or SG@FLhealthlawyer.com. This article is
only necessary software or IT and train- an overview only of the topic and is not
ing used predominantly to create, main- intended to, nor does it provide legal
tain, transmit, or receive EHR, cannot advice, which must be based on the specific
include staffing, nor be used for recipi- facts and
ent’s personal or unrelated business; (ii) circumstances of each client.

South Florida Hospital News hospitalnews.org December 2007 7