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Hospitals Giving the Gift of Technology
February 2007
There's usually a huge disparity between the use of I.T. in hospitals and physician practices. But the Bush administration is betting that recent revisions to federal law will help change that.
Last August, the Department of Health and Human Services published two final rules designed to ease restrictions on hospitals and other entities donating information technology to physicians and group practices.
Hospitals and other organizations have long been loath to make I.T. donations, fearing such activity would violate federal anti-kickback statutes and the Stark Act governing physician referrals. The final rules published in August made specific and conditional exceptions to those laws to permit I.T. donations, while continuing to restrict the referring of patients to facilities in which the referring physician has a financial interest.
HHS issued new exceptions to these laws to allow donations of electronic prescribing and electronic records software to help speed progress toward President Bush's goal of having substantial adoption of clinical information systems by 2014.
In response, some hospitals are using these exceptions to develop and roll out I.T. donation or data sharing initiatives.
"There are a lot of reasons why hospitals want to work with physicians for I.T. adoption," says Chantal Worzala, senior associate director for policy at the Chicago-based American Hospital Association. "The biggest one is being able to share information with them. They also feel physicians would be more willing to use technology in the hospital if they are already using it in their offices."
Health care industry experts and legislators for several years have called for the creation of I.T. donation exceptions. But whether the resulting rules will have a dramatic effect on physician I.T. adoption is uncertain. The new exceptions are somewhat unclear, which has led some hospitals to delay donation plans as they mull over legal advice on what types of technology or related services are allowed.
Additionally, the new exceptions don't address whether a not-for-profit organization would be at risk of losing its tax-exempt status for donating I.T.-something that would prevent some hospitals from creating such an initiative.
AHA requested the Internal Revenue Service make a ruling on this uncertainty. The association also issued an advisory interpretation of the new rules but is recommending each hospital consult with a lawyer before beginning a donation initiative, Worzala says.
"Having meaningful and very clear changes to the rules will facilitate hospitals' plans to share I.T. resources with physicians," she says. "But the way the rules came out, the requirements are sufficiently complex. It's not the 'bright line' guidance we would have liked. It will take time for hospitals to work through what they want to do and what the regulations say."
Interpreting the laws
The Centers for Medicare and Medicaid Services and the HHS Office of Inspector General each issued separate donation rules because there are two different regulations that govern contributions to physicians.
The Stark Act regulates the financial relationships that a hospital can have with physicians to prevent referrals for Medicare reimbursable services to facilities in which the referring physician has a financial interest. It does so by creating permissible financial relationship "exceptions", explains Mark Lutes, a partner at Epstein, Becker & Green, a Washington-based law firm. CMS last August issued an exception to the Stark Act that creates an opportunity for a permissible financial relationship for the donation of e-prescribing and electronic records technology.
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