Feds Relax Anti-Fraud Laws on Health IT Donations

New regulations will allow small physician practices to more easily accept gifts from hospitals that can be used to improve health IT.

New regulations will allow more physicians to accept gifts of technology from hospitals and other organizations.

The regulations, announced August 1 by Health and Human Services Secretary Mike Leavitt, are intended to spur adoption of health IT, particularly by small physician practices that could not otherwise afford them.

Hospitals could save money if they had access to patient information from community physicians, said Leavitt, adding that if hospitals know more about a patient, they can avoid redundant care and medical errors, and thereby boost quality and cut costs.

Several hospitals have announced their willingness to give technology to community doctors to reap such savings.

Under current statutes, such entities may fear giving health information technology to community physicians for fear of running afoul of anti-corruption rules, which prohibit doctors from referring Medicare patients to hospitals and other institutions if the doctor has a financial relationship.

The new regulations create new safe harbors to two key federal fraud and abuse laws for the donation of electronic health information technology and training.

"Having the safe harbors in place will spur a lot more adoption," said James Morrow, a community physician with North Fulton Family Medicine in Georgia and an occasional consultant for EMR vendor AllScripts.

But he warned that getting small physician practices will not be an easy sell because doctors dont want to change work processes that already seem to be working fine.

"The hospitals are going to have to reach out to the physicians," he said. Still, he hoped the financial help, along with a newly established system to certify products, will overcome physicians fears of adopting the technology.

"If we dont get some movement with all of this, I shudder to think how long it will be before people start to use EHR."

At a press conference, Leavitt said that the new regulations allow for a broader range of technology donors and recipients but also include new provisions to make sure that donated equipment improves health care. To avoid abuse, hospitals cannot tie donations to doctors referrals.

To be exempted from the anti-corrpution regulations, electronic health records systems must be certified by the Certification Commission for Healthcare Information Technology, a nonprofit group created by industry organizations and funded by HHS to verify that EHRs perform a common set of functionalities.

Physicians offices must also cover at least 15 percent of the equipment or services, a provision intended to make sure that physicians have, literally, bought into the value of the technology.

When draft regulations were late last year, they were criticized as being too vague about what kind of equipment could be donated.

Alison Rein, assistant director of food and health policy at the National Consumers League, said that the regulations took many steps in the right direction, though she worried that these steps were too small.

She spoke with caution, she said, because she has not yet read the final text of the regulations, which will publish in the Federal Register on August 8.

The league is concerned that vendors and hospitals could use gifts of equipment to reward physicians for patient referrals or other kickbacks.

In particular, she recommended that health technology systems pass standards of CCHIT and that the regulations should automatically expire, presumably restoring anti-fraud and kickback provisions once doctors have the technology in place.

Rein also worried that the certification standards were too low and the sunset period too long.

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On the other hand, some vendors have complained that the certification process is onerous. They balk at the $28,000 fee for the certification process and say that their products are still useful even if they lack all the functionalities required by CCHIT.

Todd Stein, spokesman for e-prescribing and EHR company AllScripts, said the new regulations would likely benefit companies like his, potentially opening up new markets for its software.

Allscripts is one of about 20 companies whose products have been certified by CCHIT.

Leavitt said that linking the new regulations to CCHIT approval would ensure that different health information systems will work together.

Though current CCHIT standards do not insure perfect interoperability, he said, the standards would become more exacting over time.

Such standards, he said, further the original regulations intent: to promote competition and improvement between different health technologies.

"This is not about connecting physicians to one hospital. Its about connecting physicians to the whole world."

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