On April 10, 2013, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services issued a proposed rule (the Proposed Rule) that would amend the electronic health record (EHR) safe harbor under the federal Anti-Kickback Statute (AKS). That safe habor allows health care organizations to donate EHR technology without triggering the AKS. The Proposed Rule can be found at http://www.gpo.gov/fdsys/pkg/FR-2013-04-10/pdf/2013-08314.pdf. The Centers for Medicare and Medicaid Services (CMS) issued a parallel proposed rule for the EHR exception under the Stark Laws (“Stark Law safe harbor proposal”). While both rules propose nearly identical amendments, the proposed amendments to the AKS EHR safe harbor are specifically discussed below. Public comments for both the Proposed Rule and the Stark Law safe harbor proposal are due by June 10, 2013.

Currently, the AKS EHR safe harbor, which is set to expire on December 31, 2013, requires that donated EHR technology be “interoperable” with other systems and that the technology contain electronic prescribing capabilities, among other requirements. The Proposed Rule would amend the EHR safe harbor in at least three ways: (1) extend the expiration date; (2) remove the electronic prescribing capability requirement; and (3) update the interoperability provision.

First, the OIG proposes to extend the EHR safe harbor’s expiration date to December 31, 2016 – the last year of Medicare EHR incentive payments. Alternatively, the OIG is considering extending the expiration date of the safe harbor to December 31, 2021 – the last year of the Medicaid EHR incentive payments.

Second, the OIG proposes to remove the requirement at 42 C.F.R. § 1001.952(y)(10) which mandates that donated EHR software contain electronic prescribing capabilities. While the OIG believes in the importance of electronic prescribing, it does not think it is necessary to retain this requirement because there have been sufficient alternative policy drivers that support the adoption of electronic prescribing capabilities. For example, Congress passed the Medicare Improvements for Patients and Providers Act (MIPPA) in 2008 and the Health Information Technology for Economic and Clinical Health Act (HITECH) in 2009, both of which established electronic prescribing and EHR incentive programs.

Third, the OIG proposes to update the safe harbor’s “interoperability” provision to conform with the current Office of National Coordinator for Health Information Technology’s (ONC) certification program. Specifically, the OIG proposes to amend 42 C.F.R. § 1001.952(y)(2) to reflect that EHR software will be deemed interoperable if, on the date it is provided to the recipient, it has been certified by an authorization process established by ONC to any edition of the electronic health record certification criteria under the then-applicable definition of “Certified EHR Technology” in 45 C.F.R. Part 170.

In addition, the OIG is contemplating narrowing the scope of “protected donors” due to specific comments received by the OIG suggesting that some donors are abusing the safe harbor by providing referral sources with EHR technology that, while “interoperable”, still lead to data and referral “lock-in” – meaning that, in practice, the true ability of the donated EHR technology to exchange information across organization and vendor boundaries may be limited. Specifically, the OIG is considering revising the range of protected donors to include only hospitals, group practices, PDP sponsors, and Medicare Advantage organizations (i.e., the original Medicare Modernization Act-mandated donors), or alternatively, excluding specific types of donors, such as suppliers of ancillary services considered to be associated with a high risk of fraud and abuse (e.g., laboratory companies, DME suppliers, and independent home health agencies). The OIG is also seeking comments on new and/or modified conditions that prevent data and referral “lock-in” and encourage the free exchange of data.