Coalition seeks exceptions to information-technology rules

A business coalition representing technology companies, hospitals, health insurers, drug makers and a wide array of others is lobbying the Bush administration to broaden exceptions to federal anti-kickback and conflict-of-interest laws they say prevent them using electronic medical records and other health-information technology.

The National Alliance for Health Information Technology, an umbrella group consisting of more than 100 companies and organizations, is among interest groups pressing the Department of Health and Human Services (HHS) to reconsider proposed regulations published in October.

The new rules would not be enough to encourage hospitals and doctors to invest in these technologies because they are too restrictive, said Alliance Vice President of Policy and Government Affairs Bill Head. The HHS proposals do not address healthcare providers’ fears of breaking the law in the process of trying to implement one of the administration’s healthcare priorities, the Alliance maintains.

HHS Secretary Mike Leavitt, like his predecessor Tommy Thompson, is a vocal supporter of health information technologies (IT) such as electronic medical records and prescriptions. President Bush has created a national health IT czar and has called for the nationwide use of electronic medical records by the end of the decade.

But the Alliance and other lobbies, such as the American Hospital Association (AHA) and the Medical Group Management Association, say the administration has not gone far enough in setting out exceptions to laws that were designed to prevent doctors and hospitals defrauding Medicare.

In addition to anti-kickback statutes that prohibit hospitals and doctors entering into financial agreements that effect, for example, patient referrals, two laws named after Rep. Pete Stark (D-Calif.) present obstacles to health IT, the groups say. The statutes, known as Stark I and Stark II, were enacted to prevent doctors from sending patients to hospitals and other facilities in which they have a direct financial stake.

The highest penalty for violating these laws is exclusion from the Medicare program, which would be damaging to practically any healthcare provider.

The hospitals and doctors want HHS to free them from these requirements so that hospital companies can provide computer hardware, software and training to doctors’ offices. Their aim, they contend, is to advance the adoption of standardized systems in all healthcare sectors that are supposed to make medical care cheaper, more efficient and better.

HHS has the legal authority to establish exemptions to the Stark and anti-kickback laws for specific circumstances. For example, the department allows hospitals to provide equipment to doctors at “fair market value,” which usually is less expensive for the physicians than if they purchased them on their own.

In October, the Centers for Medicare and Medicaid Services and the HHS Office of the Inspector General proposed new rules designed to detail the exceptions and to provide legal “safe harbors” for sharing information technology related to medical records and prescriptions.

In its written comments to HHS, the Alliance argues that the rules do not go far enough to encourage the adoption of the new technologies.

“The express purpose of the proposed exceptions to Stark should be to create clear cases in which health IT can be donated to physicians without fear of violating federal law. However, the proposed exceptions create more uncertainty about what is permitted without eliminating barriers to investment in healthcare IT,” the comments state.

Similarly, the AHA’s comments to HHS say, “The absence of clear guidance likely will inhibit action by hospitals because they continue to fear they may be subject to severe penalties.”

The proposed rules on electronic prescriptions would allow doctors to receive software that manages the prescriptions but would forbid software that performs any other functions. For example, Head said, an electronic-prescriptions program that also includes billing and scheduling features would not qualify for the legal exception.

The regulatory provisions that would govern electronic medical records also are problematic, Head said.

Because there is not yet a single, standard system for electronic medical records, HHS seeks to establish a narrow exception and revisit the issue when such a standard is established and approved by the department. In the meantime, the types of electronic-medical-record technologies that could be provided to doctors would be limited.

HHS would require two separate certifications for technologies employed before and after the enactment of standards for electronic medical records. The Alliance, the AHA and others recommends instead that a single standard be adopted with the stipulation that all technologies adopted before the standards are certified be made compatible when the standards are put in place.

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