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HHS Issues Regs for Donating Health IT, Services

By Mary Agnes Carey, CQ HealthBeat Associate Editor

AUGUST 1, 2006 -- The Department of Health and Human Services (HHS) announced Tuesday final regulations meant to support physician adoption of electronic prescribing and electronic health records technology.

The rules create new exceptions and safe harbors from two key federal fraud and abuse laws governing the donation of electronic health information technology and services, HHS said in a news release.

Under current anti-kickback law, written by Rep. Pete Stark, D-Calif., physicians are prohibited from referring Medicare patients for certain designated services to entities, such as hospitals, with which the physician has a financial relationship. Such practices could be seen as illegally inducing referrals of patients or recruitment of enrollees.

The exceptions and safe harbors announced Tuesday, published by the Centers for Medicare and Medicaid Services and HHS' Office of Inspector General, establish conditions under which hospitals and other certain groups can donate to physicians items such as interoperable electronic health records software, hardware, training for electronic prescribing, and other duties.

According to HHS, the exceptions and safe harbors protecting such arrangements will sunset on Dec. 31, 2013, in line with the president's goal of adopting the technology by 2014.

"This is a big day for the advancement of health information technology," HHS Secretary Michael O. Leavitt said in a conference call with reporters.

President Bush has said that he wants most Americans to have an electronic medical record within 10 years and that such records will reduce health care costs and improve patient care. To help encourage hospitals, physicians, and other health care providers to invest in electronic health record systems, HHS announced last month a list of ambulatory, or outpatient, electronic health record systems approved by a federal panel.

But some physicians, hospitals, and other providers are reluctant to invest in electronic health record systems, fearing the technology will become outdated and unable to share information with other providers—the essence of "interoperability," which advocates say can reduce paperwork and shave billions off health care costs.

Karen Ignagni, president and chief executive officer of America's Health Insurance Plans, a trade group representing health insurers, said the new regulations would "create a uniform template to support e-prescribing and the creation of electronic health records."

Ignagni added, "We believe that these new exceptions to the Stark and anti-kickback rules to expedite the exchange of technology throughout the health care system now eliminate the need for Congress to act on this matter."

Separately on Tuesday, both Ignagni and Leavitt said they took issue with provisions of health care information technology legislation (HR 4157) that would not allow health information systems to be compatible.

"Unfortunately, the House bill contains the serious flaw of treating health IT as if it doesn't need to be interoperable," Leavitt told reporters. "That's like having a cell phone that can't talk with other cell phones from another network."

Leavitt urged House and Senate conferees "to reexamine the bills and make interoperability a specific requirement."

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