Medical E-Records and Kickbacks
One of the key projects for the Bush administration is spurring the adoption of electronic medical records (EMRs). To that end, the Centers for Medicare & Medicaid Services and the Office of the Inspector General have promulgated (in the Federal Register) new rules that let hospitals, along with some other health entities, donate hardware, software, and IT services to physicians for e-prescribing and EMR purposes. The rules create an exemption to two laws designed to prevent fraud and abuse in the Medicare system. These laws are painfully complex, but in short, they prevent physicians from referring patients whose care is funded by Medicare for services if the physician has any financial incentive for the referral (the “Stark Law“), and they prevent hospitals from offering inducements to physicians to gain referrals (the anti-kickback law). However, there are exceptions to the laws, and the added rules create one. Creating a “safe harbor” exception is important because the anti-fraud laws have been interpreted broadly and rather harshly – see for example U.S. v. Greber – and so physicians are quite wary of running afoul of them.
On one hand, this is beneficial: there is general agreement that electronic medical records offer significant potential for reduced medical errors, decreased costs, increased portability, and (perhaps) greater security.
However, there are at least two concerns. First, interoperability is what makes EMRs work. If the new rules encourage fragmentation, rather than standards-based records, they will hurt patients rather than helping them. Second, even donated technology and services can influence a physician’s decision regarding referred care. This may be an acceptable trade-off for enhanced EMR and e-prescribing adoption, but it’s one we should mull over.
Props to Joe Perry, a colleague and friend who’s working with me on a paper about the unexpected costs of the Health Insurance Portability and Accountability Act (HIPAA), for the pointer. Joe’s a manager at IBM and a Ph.D. candidate at Northeastern University’s program on Law, Policy and Society.
Filed under: Health Law, Software
well, These laws are painfully complex, but in short, they prevent physicians from referring patients whose care is funded by Medicare for services