The threat of prosecution for violation of physician self-referral laws -- cited as a major deterrent in the adoption of electronic healthcare technology -- could become a thing of the past if HHS proposals made last week become final, industry experts say. That, in turn, would quicken the adoption of electronic technology by physicians and physician offices.
On Oct. 5, HHS, along with its inspector general's office, announced two proposals that would make it possible for hospitals and other healthcare organizations to help doctors purchase and implement electronic medical records, or EMRs, and electronic prescription systems. One proposal would create exceptions to the physician self-referral law, known as the Stark law, prohibiting doctors from referring patients to hospitals in which they have financial interests. Another proposal would create "safe harbors" for donating EMR and e-prescription technology, creating an exception to antikickback laws.
During the next two months, the CMS will accept public comment and draft a final rule based on the proposals.
Since President Bush announced last year his goal to create a national electronic medical system within a decade, the administration has stumped for the plan, saying health information technology has the promise to improve the nation's healthcare, drive down medical costs and improve healthcare access.
But many in the healthcare community said that until exceptions were made to the Stark and antikickback laws, provider adoption of IT would stall.
Tony Lennen, president and chief executive officer of Major Hospital, a 58-bed facility in Shelbyville, Ind., can attest to the chilling effect the Stark and antikickback laws have had. "If there was a doctor who worked only at our hospital and we wanted to put a PC in his office for electronic record-keeping, I could be put in jail for that," he said. Fear of prosecution, he added, has been as much of a hindrance to provider adoption of IT as cost concerns. "Even if we could budget for this, if the regulations stop you, there's nothing we can do about it."
The Medicare Modernization Act of 2003 tried to allay some of the providers' concerns by mandating the CMS to create exceptions to the Stark law. In March 2004, the CMS made such an exception for "communitywide health information systems." But that move only confused things further. Just what does "communitywide" mean, many asked.
"Does it mean that if you made it available to one (competing) hospital in your area but not to another you would be in violation of the law?" asked Kevin Fickenscher, family practitioner and executive vice president of healthcare transformation at Perot Systems Corp. "You get into what is proprietary and how do you manage it," he said.
Last week's announcement, many said, was significant not only because the CMS is creating the exceptions but also because HHS' inspector general's office is onboard. Without that office's participation, the proposals would have meant little. "If the OIG doesn't weigh in, you can't get the healthcare lawyers to back you," Fickenscher said.
While the proposals are not expected to result in a sudden rush by hospitals and providers to enter technology-sharing arrangements together, they mark a major first step in creating an environment that encourages technology adoption, experts said.
"You still need to develop interoperability standards, but in terms of giving players the green light . . . (the federal government is) allowing them, from an economic perspective, to get involved in the game," said Kathleen McDermott, a former federal prosecutor, now a partner in the Washington office of law firm Blank Rome.
One lingering concern is whether the exceptions are tied to interoperability. If the exceptions apply to all technology regardless of interoperability, the proposal would be counterproductive because it could lead to a flurry of EMRs and e-prescribing systems that could quickly become obsolete, said a House Democratic staff member who did not want to be identified.
The American Hospital Association said that if exceptions are only given to interoperable technologies, the proposals could have little near-term effect on the adoption rate.
"If these exceptions are tied to interoperability standards, we aren't there yet," said Alicia Mitchell, a spokeswoman for the AHA.