Hospitals May Pay for Anesthesia and Pain Medicine EHRs without Violating the Self-Referral or Anti-Kickback Laws
The Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services Office of the Inspector General (OIG) last week published parallel proposed rules that would remove certain obstacles to hospitals’ paying for the electronic health record (EHR) technologies used by anesthesiologists, pain specialists and other physicians.
When a hospital or other entity that may be seeking patient referrals, such as a medical device manufacturer, gives something of value to a physician, the gift potentially may violate both the anti-kickback statute and the physician self-referral statute.
- The anti-kickback statute (Section 1128B(b) of the Social Security Act) provides criminal penalties for individuals or parties that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under Medicare or any other federal health care program. In 1987 Congress passed legislation requiring the development and promulgation of regulations, the so-called “safe harbor” provisions, that would specify various payment and business practices that would not be subject to sanctions under the anti-kickback statute. A hospital might, for example, furnish a cardiologist’s office with equipment—or with an EHR system—with the intent to induce referrals of patients to its cath lab and thus violate the anti-kickback statute
- The self-referral (Stark) law (Section 1877 of the Social Security Act) prohibits referrals for certain designated health services (DHS) payable by Medicare to an entity with which the physician has a financial relationship, unless an exception applies. Stark also prohibits the entity from submitting claims to Medicare for those referred services, unless an exception applies. The statute establishes a number of exceptions and grants the Secretary the authority to create additional regulatory exceptions for financial relationships that do not pose a risk of program or patient abuse. The financial relationship can take the form of an ownership interest or a compensation arrangement that benefits the physician or an immediate family member. Hypothetically, an orthopedic surgeon with an ownership interest in a specialty hospital and EHR technology provided by that hospital might refer patients there for radiology services (DHS) and thus need to find an applicable exception to the self-referral prohibition.
Typically, readers should recall, neither the anti-kickback nor the self-referral law applies to payments or benefits from hospitals to anesthesiologists. Anesthesiologists do not refer patients to the facility; the facility refers them to the anesthesiologists. A payment or a contribution of EHR technology from the hospital cannot induce referrals of patients—unless possibly the anesthesiologist is responsible for ordering pre-operative tests that the hospital will provide. Such tests might come within the anti-kickback statute as long as they were performed for Medicare or other federally-insured programs and within the self-referral prohibition if they were for DHS (the list of 11 DHS includes clinical laboratory, inpatient and outpatient hospital services).
Many anesthesia groups and their attorneys have found it frustrating to try to convince hospitals and other facilities in which they provide services that anesthesiologists are unlike most physicians—including pain specialists, who are more likely to refer patients to the facility—when it comes to the anti-kickback and self-referral rules. The parallel OIG safe harbor and CMS exception for donations of EHR technology should make it unnecessary for anesthesiologists to rely on the inapplicability of the referral-based prohibitions, if the regulations are finalized as proposed.
The safe harbor and the exception were both adopted in 2006, with the intention of speeding up the adoption of EHR technology. They allow donations of technology-related items and services to be used to create, maintain, transmit or receive EHRs. Both contain a sunset provision and are scheduled to expire on December 31, 2013—an expression of the federal government’s early optimism about the rapid spread of EHRs.
The OIG and CMS have now proposed to extend the sunset date to December 31, 2016, to coincide with the end of Medicare EHR incentive payments, or in the alternative to December 31, 2021, when EHR incentives for Medicaid end. Although some organizations have already urged that the EHR safe harbor and self-referral exception be made permanent, that does not appear to be under consideration.
The current safe harbor and exception require that the EHR in issue have e-prescribing capability. The Agencies do not believe that the requirement is still a necessary part of the anti-kickback and self-referral rules because, as stated in the OIG’s proposed rule, (1) “the HITECH Act already requires that eligible professionals under the Medicare and Medicaid electronic health record incentive programs demonstrate meaningful use of certified electronic health record technology, including the use of electronic prescribing,” and (2):
the industry has made great progress related to electronic prescribing. Recent analysis by ONC notes an increase in the percentage of physicians electronically prescribing via electronic health record technology from 7 percent in 2008 to 48 percent in 2012, reflecting rapid increases over the past few years in the rate of electronic health record-based electronic prescribing capabilities. Furthermore, the regulations recently published to implement Stage 2 of the EHR Incentive Programs continue to encourage physicians' use of electronic prescribing technology.
Accordingly, the Agencies propose to eliminate the e-prescribing capability requirement.
The third major change in the proposed rules relates to EHR software interoperability. The interoperability requirement will be retained, because by ensuring that the physician can exchange data with various platforms it minimizes the risk of “data and referral lock-in.” To keep up with the evolution of EHR certification and standard-setting, CMS and the OIG now propose to change the EHR certification requirements that address interoperability to better track with the Office of the National Coordinator for Health Information Technology’s (ONC) current authorization process. Specifically, the 12-month certification timeframe would change to a more flexible standard that deems software to be eligible if it has been certified “to any edition of the electronic health record certification criteria that is identified in the then applicable definition of Certified EHR Technology” maintained by ONC at the time the donation is made. This proposal also recognizes the ONC’s direction towards a two-year regulatory interval for certification standards.
Other changes floated in the proposed regulations include the possibility that the Agencies will limit the scope of protected donors or exclude certain donors that may be perceived as higher risk, such as laboratories, durable medical equipment and independent home health agencies. To afford further protection against “data and referral lock-in,” the Agencies also invite comments on adding or modifying conditions to the safe harbor and self-referral exception that would meet two goals: (1) “to prevent the misuse of the exception in a way that results in data and referral lock-in,” and (2) “to encourage the free exchange of data (in accordance with protections for privacy).”
Comments are due on June 10, 2013. The two Agencies note that each intends to consider comments submitted to the other in their final rules, given the similar purposes of their respective rule-making
What the government gives with one hand it sometimes takes away with the other. Although the self-referral exception and the safe harbor are likely to continue in effect at least until 2016, permitting hospitals to continue to defray at least some of the costs of EHR technology for their referring physicians (and their anesthesiologists), the FY 2014 budget put forward by the Obama administration on April 10th would impose an estimated $1 million in new fees on EHR vendors to help offset the costs of ONC’s certification and standards activities. The Electronic Health Records Association promptly issued the following statement:
Adding costs to the healthcare system at a time when providers already feel significant effects from several new legislative and regulatory programs, including payment cuts, is not an approach consistent with the government’s larger goals of fostering broad health information technology adoption to support healthcare delivery system reform.
Passage of a budget for FY 2014 is going to be much less predictable than support for accelerated adoption of HIT in general and EHR technology in particular. We remind our readers, however, that the incentives for meaningful use of EHRs will not last for many years. For physicians who first qualify for the incentive in 2013, the maximum amount available is $39,000. Those whose first qualify in 2014, the last year to begin participating, will earn $24,000, and the bonus will be replaced by a one percent penalty for physicians who do not successfully participate in 2015 and subsequent years. We urge you to consider taking advantage of the incentive program—whether through our F1RSTUse system or other software—if you have not yet done so.