The utilization of electronic health records (EHR) by medical practitioners has been a policy push by the federal government for a number of years. The use of EHR has been promoted by the federal government through initiatives involving the Medicare and Medicaid programs such as electronic prescribing bonuses and payments for “meaningful use” of certified technology. The government’s rationale is that it believes that EHR is going to streamline and improve delivery of health care services.

The government has further demonstrated its desire for medical practitioners to utilize EHR through regulatory protections for adopting such technology. The Anti-Kickback Statute has a safe harbor and the Stark Law has an exception allowing the legal donation of EHR technology to practitioners under specified circumstances. This allows smaller and rural-based practices to have access to EHR technology that they may otherwise not be able to afford.

On April 10, the Centers for Medicare and Medicaid Services (CMS) (which oversees the Stark Law) and the U.S. Department of Health and Human Services (HHS), Office of Inspector General (OIG) (which oversees the Anti-Kickback Statute) published proposed modifications to the current exception and safe harbor, respectively, governing the donation of EHR technology. The proposed modifications would generally (1) update provisions regarding the “interoperability” requirement for donated EHR technology; (2) remove requirements that the EHR have e-prescribing technology; and (3) extend the sunset date for the safe harbor/exception. The agencies further sought comment on additional changes that they are considering.

The proposed modifications affirm the government’s continued desire that the medical community convert to EHR technology and that the government is willing to assist providers in this regard. In that vein, the proposed rules further demonstrate the government’s recognition that this task continues to be a financial burden for many medical providers.

Current EHR Regulations

The Stark Law and federal Anti-Kickback Statute protect against fraud and abuse in the health care industry. The Stark Law contains an exception and the Anti-Kickback Statute contains a safe harbor that would allow EHR technology to be donated to physicians under specified circumstances, without running afoul of these laws. For purposes of this article, the safe harbor and the exception for donated EHR technology are substantially similar and therefore are being discussed as one set of rules, unless distinguished otherwise.

As noted above, the Stark Law exception and the Anti-Kickback Statute are similar. Therefore, the discussion of the current requirements applies generally to both regulations. Generally speaking, under these rules, EHR must: (1) be provided by a permissible donor (as defined in the regulations); (2) be “interoperable” at the time it is provided; (3) the donor may not limit the use of the donated EHR; (4) the recipient must pay for at least 15 percent of the cost of the items prior to receipt; (5) the receipt of the technology may not be conditioned on doing business with the donor or vice versa; (6) the donation may not take into account the volume or value of referrals between the parties; (7) the arrangement must be in writing, signed by both parties; (8) the donor must not have knowledge, or act in reckless disregard, of the fact that the physician has items equivalent to those provided by the donor; (9) the items may not be used primarily to conduct business unrelated to a physician’s medical practice; and (10) the EHR must have electronic prescribing capability.

Both the safe harbor and the exception are set to expire December 31. As stated in the proposed rules, an expiration date was set because it was felt that the need for a safe harbor/exception for donations of EHR technology would diminish substantially over time as the technology became more standard.

Proposed Modifications and Request for Comments

The first modification to the EHR donation rules is to the requirement for interoperability. “Interoperable” is currently defined in the regulations to substantially mean that the EHR is able to exchange data with different information-technology systems such that the purpose and meaning of the data are preserved. EHR is “deemed” interoperable if a certifying body recognized by the secretary of HHS has so certified the software within 12 months of the date it is provided to the recipient.

The purpose of this interoperability requirement, as noted by both CMS and the OIG, was to mitigate the possibility that the purpose of the donation of EHR technology would be to capture referrals. The logic was that if the EHR was interoperable, the physician could use the system to communicate and transmit records to providers other than just the donor.

Under the proposed rules, the “deeming” provision of the interoperability definition would be modified in two ways. The “deeming” provision would first be updated by stating that the EHR would have to be recognized by the Office of the National Coordinator for Health Information Technology (ONC), reflecting the office currently certifying EHR technology.

Secondly, the 12-month timeframe in the deeming standard would be changed to follow the more current standards set by the ONC EHR certification program. The OIG and CMS noted that subsequent to the issuance of the final safe harbor/exception, the ONC established a program for certifying EHR technology that occurred on two-year intervals, which is out of line with the current 12-month requirement. Therefore, under the proposed change, the donated technology would have to have been certified by the ONC, based on the definition of “certified EHR technology” in place at the time of the donation.

The proposed rules next eliminated the necessity that the donated EHR technology contains an electronic prescribing capability. Both agencies stressed that they continue to believe in the importance of e-prescribing. However, the agencies recognized that there is a Medicare electronic prescribing incentive in place as well as an incentive for “meaningful use” of certified EHR, which includes the mandated use of electronic prescribing. In addition, the agencies noted that there has been a demonstrated increased use of electronic prescribing by physicians, such that in 2012, 48 percent of physicians were utilizing this technology. Therefore, the agencies concluded that the desire for conversion to electronic prescribing had been sufficiently dealt with through other initiatives.

As a final material change in the proposed rules, the agencies moved the sunset date to December 31, 2016, the final year in which providers may receive a payment through the Medicare EHR incentive program and the final year in which they may participate in the Medicaid EHR incentive program. The agencies affirmed their prior statements that they believe the need for donations of EHR will diminish over time. However, the agencies sought comment on the date and indicated they are considering a later sunset date.

In addition to those proposed modifications, they sought comment on various other issues with the rules. For one, the agencies sought comment on whether the permissible type of donor should be narrowed, as had at one time been contemplated prior to the passing of the current safe harbor/exception. Suppliers of ancillary services without a direct and primary patient care relationship and laboratories were specifically identified as donors with the potential for abuse. The agencies are therefore considering limiting donors to hospitals, group practices, prescription drug plan sponsors and Medicare Advantage organizations. They sought comments on whether other donors should be included. Alternatively, the agencies are considering keeping the current definition of protected donors but excluding specific donors such as suppliers of ancillary services and laboratory companies.

The agencies also indicated they are interested in other modifications that would help achieve two goals: (1) prevent the result of data and referral lock-in from EHR donation and (2) encourage the free exchange of data. Comments are sought on what further modifications would promote these two goals.

The agencies lastly sought comments on whether the definition of permissible technology for donation was sufficiently clear.

Interested readers may find the proposed Stark exception rules at and the proposed rules to the Anti-Kickback Statute safe harbor at

Comments are due to the agencies by June 10. •

Vasilios J. Kalogredis is the president and founder of Kalogredis Sansweet Dearden & Burke, a health care law firm, and Professional Practice Consulting Inc., a health care consulting firm, in Wayne, Pa. He can be contacted at 800-688-8314 or at