Health IT Groups: Anti-Corruption Rules Stall Technology

By M.L. Baker  |  Posted 12-15-2005

Proposed exceptions to anti-kickback laws won't be enough to allay hospitals' fears about helping community physicians adopt health information technology, according to several health IT proponents and health care organizations.

The public comment period for proposed changes ended this week with the American Hospital Association, the National Alliance for Health Information Technology, the Health Information and Management System Society, and other groups saying that further changes and clarifications are necessary.

The Department of Health and Human Services has long recognized that laws designed to halt corruption also hinder the spread of health information technology.

The anti-kickback statute and Stark rules prohibits hospitals from giving physicians hardware, software or training because these resources could be used as a form of payment for referring patients to hospitals.

However, the regulations also prevent collaborations for shared systems that could, for example, allow emergency personnel to access a patients' health records or allow a community physician to see what medications a patient received during a hospital stay.

The changes,proposed by Centers for Medicare and Medicaid Services and the HHS Office of the Inspector General establish safe harbor for hospitals that help physicians set up electronic prescribing and electronic health records.

But critics said the proposed rules do not remove these barriers. For example, hospitals may not give doctors equipment that is equivalent to what they already own, but determining equivalence is not clear cut.

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"The proposed exceptions create more uncertainty about what is permitted without eliminating barriers to investment in health care IT," says Scott Wallace, head of the National Alliance for Information Technology.

"In fact, the proposed exceptions work against the stated goals of fostering cooperation between potential donors and physicians to achieve interoperability."

A white paper from the law firm McDermott Will and Emory concluded that the proposed changes "are probably too narrow to effectively encourage widespread adoption of EHR systems."

One particular limitation is that it disallows donations of equipment that could be used for any purposes other than transmitting and receiving prescription drug information.

However, Karen Ignagni, CEO of AHIP (America's Health Insurance Plans), warned against "unintended consequences of tying physicians to hospitals financially through equipment subsidies or electronic record sharing" when testifying to Congress earlier this year.

In particular, community practices that become dependent on one hospital's network may be less able to work with other hospitals, she said.

AHIP submitted comments to the federal government stating that the proposed rules strike an appropriate balance between the need to support health IT and the potential for fraud and abuse. It also made several suggestions to strengthen requirements for interoperability of donated systems.

McDermott Will and Emory acknowledged that donating equipment could allow for some fraud and abuse.

"The technology is valuable, gives wealthier hospital and health systems or Medicare Part D Sponsors a competitive advantage, and, if not interoperable, can inappropriately influence medical decision making and steer patients to the donor's facilities."

However, the lawyers also concluded that community physicians will not pay for health IT themselves, and so hospitals and other donors are essential to widespread health IT adoption.