Reed Smith Client Alert

Authors: Robert J. Hill

Type: Client Alerts

On December 27, 2013, the Office of Inspector General (“OIG”) and the Centers for Medicare & Medicaid Services (“CMS”) each published, in the Federal Register, a final rule that amends regulations under the Anti-Kickback Statute (“AKS”), 42 U.S.C. § 1320a-7b(b), and the federal physician self-referral law (“Stark Law”), 42 U.S.C. § 1395nn, permitting certain arrangements involving the donation of interoperable electronic health record (“EHR”) software or information technology and training services. The final rules modify the Stark Law’s EHR exception (“EHR Exception”), 42 C.F.R. § 411.357(w), and the AKS EHR safe harbor (“EHR Safe Harbor”), 42 C.F.R. § 1001.952(y), in a few important ways.

More specifically, the final rules:

  • Extend the “sunset” date of the EHR Exception and the EHR Safe Harbor from December 31, 2013 to December 31, 2021
  • Exclude laboratory companies from the types of entities that may donate EHR items and services
  • Update the provisions under which an EHR donor or recipient can ascertain, with certainty, that EHR is interoperable pursuant to the exception and safe harbor (the “deeming provisions”)
  • Remove the requirements that donated EHR include an electronic prescribing capability
  • Clarify the requirement prohibiting any action that limits or restricts the use, compatibility, or interoperability of donated items or services

With the exception of the amendments to the sunset provisions, which went into effect December 31, 2013, the amended regulations will be effective March 27, 2014.

In explaining the modifications to the EHR Safe Harbor and the EHR Exception, the final rules’ preamble discussions provide helpful insights into OIG’s and CMS’ views regarding interoperability, the importance of EHR adoption, and data and referral “lock-in.” Because the final rules contain largely parallel modifications, and the preamble discussion for each rule generally mirrors the other, our summary below is a combined discussion of both the final EHR Exception rule and the final EHR Safe Harbor rule. For your reference, during this summary, we point out a few differences in OIG’s and CMS’ preamble discussions, and at the end of this summary, we provide a side-by-side comparison of the EHR Safe Harbor and the EHR Exception, highlighting the recent revisions.

Please download the .PDF below to read the full client alert.