The Stark And Anti-kickback Regulations for Electronic Prescribing Systems

On August 8, 2006, the Office of Inspector General (OIG) and the Centers for Medicare and Medicaid Services (CMS), collectively the "DHHS," issued two new safe harbors under the federal anti-kickback law and two new exceptions under the federal physician self-referral law (the Stark Law) that are intended to remedy this problem. The first safe harbor and exception permit certain arrangements involving the provision of electronic prescribing technology. The second safe harbor and exception permit certain arrangements involving the provision of non-monetary remuneration in the form of electronic technology and training services for IHRS. This article will concentrate on the electronic prescribing laws. The electronic prescribing safe harbors allow for certain donors to "provide non-monetary remuneration in the form of hardware, software, or information technology or training services that is necessary and used solely to receive and transmit electronic drug prescription information," to defined recipients. For example, e-prescribing software that also includes general office management, billing, scheduling, electronic health records or other functions together with the electronic prescribing features would not meet the "used solely" element. The anti-kickback statute safe harbor permits donor-recipient relationships that include (1) hospitals to members of their medical staff; (2) group practices to their physician members; and (3) prescription drug plan (PDP) sponsors and Medicare Advantage (MA) organizations to network pharmacists, pharmacies participating in the network of such PDP sponsor or MA organization, and prescribing healthcare professionals. The Stark exception provides for almost identical donor-recipient relationships, except the third relationship is limited to a PDP sponsor or MA organization donor to a prescribing physician recipient. The selection of recipients must meet several conditions that seek to minimize the potential for fraud: the recipient may not already possess equivalent items or services; donations may not be made as a condition of the recipient doing business with the donor; and donations may not take into account, directly or indirectly, the volume or value of the recipient's referrals to the donor or other business generated between the parties. The selection of recipients of electronic prescribing technology may be based upon the total number of prescriptions written by the recipient. In addition to the foregoing, (1) donors may not take any action to limit or restrict the use or compatibility of the items or services with other electronic prescribing or electronic health records systems, and (2) recipients must be able to use the protected technology for all patients without regard to payor status. Covered items include "hardware, software, and information technology and training services." The DHHS intended to accommodate rapidly evolving technologies, so the safe harbor and exception contain no restrictions or limitations on the technology qualifying for protection. The DHHS also permits the donation of licenses, rights of use, intellectual property, upgrades, and educational and support service. The safe harbor and exception for e-prescribing narrowly describe the type of information to be transmitted. "Prescription information" is defined to mean "information about prescriptions for drugs or any other item or service normally accomplished through a written prescription." Thus, complimentary electronic tools that provide information necessary to formulate, transmit, or receive a medically appropriate prescription for a patient, including electronic clinical support tools identifying alternative drug therapies, drug-to-drug interactions, or a payor's formulary information, are permitted. However, if a data analysis tool is used to transmit or receive data that is unrelated to a prescription, the tool would not satisfy the safe harbor or exception. Another key aspect of the electronic prescribing safe harbor and exception is that there is no limit to the value of the donated technology. Although the DHHS remains concerned that the risk of fraud and abuse generally increases with the value of the remuneration offered, the DHHS was convinced that determining the value of donated technology created too many difficulties. Finally, as with most safe harbors and exceptions to the fraud and abuse laws, there are documentation requirements. The parties must have a written agreement signed by the parties that specifies the items and services being provided as well as the donor's cost for those items and services. The written agreement also must cover all of the electronic prescribing items and services to be provided to the donor or affiliated parties. Implementation of e-prescribing should improve efficiency, access, and quality of the healthcare system. Because of the technicalities of the safe harbor and exception, those seeking protection under the exception or safe harbor must be diligent in understanding the full scope of technology and related services being offered, the full extent of the conditions imposed on the relationship, and the documentation requirements that accompany the protection afforded by the exception and safe harbor.