New rules permit gifts of computer-related items

September 4, 2006

The Department of Health & Human Services published final rules on Aug. 8 to allow health systems, health plans, drug plans, and others to give pharmacists, physicians, and other providers items and services related to e-prescribing and the electronic health record (EHR), without fear of running afoul of federal fraud laws. The rules are designed to drive more physicians to prescribe electronically.

The Department of Health & Human Services published final rules on Aug. 8 to allow health systems, health plans, drug plans, and others to give pharmacists, physicians, and other providers items and services related to e-prescribing and the electronic health record (EHR), without fear of running afoul of federal fraud laws. The rules are designed to drive more physicians to prescribe electronically.

In the face of many requests after the rules were proposed last fall, HHS greatly expanded the avenues of donation. EHR donations and acceptance of those donations will be allowed by many individuals and entities throughout the industry, though the rules specifically for e-prescribing donations are more limited.

In the portion of the rules that affect pharmacists most directly, the Office of Inspector General (OIG) created two new "safe harbors," under the federal antikickback statute, allowing a large range of donations, with some limitations.

The EHR safe harbor allows donations of EHR software, which must include e-prescribing. It also allows information technology and training gifts. However, hardware is specifically excluded.

Health plans, as well as individuals or entities that provide covered services and submit claims or requests for payments to any federal healthcare program, may donate the EHR items. Any individual or entity engaged in healthcare delivery may accept the donations, and there is no upper limit on the value of the donations. However, recipients must pay 15% of the cost. Donated systems must be interoperable.

The change makes it more likely that entities will donate items and services to pharmacists, said Paul Uhrig, SureScripts executive VP of corporate development. With most R.Ph.s already connected to e-prescribing, he thinks the focus of donations will be to physicians, which, he noted, could lead to more physicians actually e-prescribing.

OIG acknowledged that many groups complained that it is not reasonable that e-prescribing items be "used solely" for e-prescribing. The agency said it could not ignore the language of the law on e-prescribing in the Medicare Modernization Act, but that the rules do provide a much wider safe harbor for EHRs.

OIG explained that the EHR safe harbor does not include hardware because that is probably not what providers most need and that gifts like computers and servers may be more likely to be used as disguised payments for patient referrals. The agency also carefully stressed that "safe harbors" under the antikickback rule are simply explicit assurances that certain activities will not be subject to prosecution. They do not imply that other actions are necessarily a problem.

Specifically, OIG said, it doesn't believe that most provisions of e-prescribing items and services are antikickback problems, as long as they are at "fair market value," are at arm's length, don't take into account the volume of federal healthcare business, or don't have the intent of generating healthcare business. On the other hand, these safe harbors do not preempt state antikickback laws, OIG said, because it does not have the authority to do that.

The Centers for Medicare & Medicaid Services promulgated rules the same day with basically parallel exceptions under the physicians' self-referral law. That law affects only donations to physicians.

The rules go into effect Oct. 10. The two announcements, from OIG and CMS, are in the Aug. 8 Federal Register ( http://www.gpoaccess.gov/fr/).

THE AUTHOR is a writer based in Maryland.