HHS to issue HIT safe harbors

U.S. Department of Health and Human Services (HHS) Secretary Michael Leavitt announced two final rules that will be published in the August 8, 2006, Federal Register. These rules are intended to foster the spread of health information technology.

The Centers for Medicare and Medicaid Services will be creating two exceptions from the physician self-referral prohibitition (Social Security Act § 1877) -- one for donations of electronic prescribing ("e-prescribing") equipment that meets Medicare Part D standards and the other for interoperable electronic health record ("EHR") software. Recipient physicians must contribute at least 15% of the donor's cost for the interoperable EHR software, but can accept the e-prescribing equipment for no charge, but subject to other prerequisites described in the rule.

The HHS Inspector General will be creating e-prescribing equipment and interoperable EHR software safe harbors from the federal health programs anti-kickback act (from which the Federal Employees Health Benefits Program is exempt.) These safe harbors like the physician self-referral law exceptions impose no limit on the value of e-prescribing equipment but require a 15% copay toward the value of EHR software.

According to HHS's press release,

The scope of donors and recipients under the final rules is considerably broader than in the proposed rules. Donations protected under the exception may be made to any physician by entities furnishing DHS. The exception requires compliance with criteria similar to those listed in the electronic prescribing exception, as well as additional criteria, such as those requiring cost sharing and selection of physician recipients of donated technology.

The corresponding OIG safe harbor is similar. However, consistent with underlying statutory differences, the safe harbor covers a broad array of providers, suppliers, practitioners and health plans when they provide electronic health records technology to physicians and others engaged in the delivery of health care.

These rules take effect sixty days after Federal Register publication. The self-referral law exception and safe harbor for EHR software donations will expire at the end of 2013. There is no corresponding sunset limitation on the exception and safe harbor for e-prescribing equipment.

On a related note, CCHIT certified two new EHR products as interoperable yesterday.