Related Items

   FREE Health Data Management Site Registration

Sign up today and access the leading source of Health Care I.T. information on the Web.

Your FREE site registration entitles you to:

Free Health Data Management e-newsletter
 
Search more than 12,000 articles
 
Access Web Seminars on a host of I.T. topics
 
White Papers and Industry Research that provide valuable insights on a variety of technologies and implementation issues
 
Podcasts, updates on industry events, and much more!

 
   

IRS Rules on I.T. Donations


July 2007
The recent Internal Revenue Service ruling that permits not-for-profit hospitals to donate information technology and related services gives a boost to efforts to accelerate physician I.T. adoption, industry observers say. At the same time, plenty of murkiness remains.

"The guidance is a real clear signal to hospitals that they can move ahead with their health I.T. arrangements with physicians," says Lawrence Hughes, regulatory counsel for the American Hospital Association, Chicago.

Lack of guidance from the IRS held back donations after the Department of Health and Human Services last August issued rules making exceptions to the Stark Act and anti-kickback statutes, believes Stanley Nachimson, a former HHS official and principal at Nachimson Advisors LLC, a Baltimore consulting firm. "Now that the IRS ruling is here, we will get a good idea of the true interest in donations," he adds. "I believe it's a real shot in the arm for expanding electronic health records."

Still, he acknowledges that major barriers, primarily money and acceptance by physicians of new ways of doing business, remain. "We still have to make the case in the industry for the return on investment in doing this."

Hospitals considering donation programs should involve their legal counsel "early and often" in interpreting the IRS guidance in conjunction with the HHS ruling, advises Laura Jantos, principal at ECG Management Consultants Inc. in Seattle. The IRS ruling, for instance, enables a sponsoring hospital "to the extent permitted by law" to access all of the electronic medical records created by a physician using the I.T. and services subsidized by the hospital.

Jantos interprets "extent permitted by law" to mean use of the records must be in accordance with the HHS exemptions and the HIPAA privacy and security rules. She further believes the IRS language means having an enterprisewide EMR is legal under tax laws. Consequently, hospitals can receive a benefit from the donation-such as physicians in the hospital having access to pertinent ambulatory data-without penalty from the IRS, she says.

Another issue that remains murky is the level of subsidies. The HHS ruling stipulates that physicians must pay for 15% of the value of donated I.T. and services. But the IRS ruling says hospitals can vary the level of subsidies by applying criteria related to "meeting the health care needs of the community," Jantos notes.

More NewsLine Articles

Hospitals Archive
Group Practices Archive

Marketplace