OIG Extends Electronic Health Records Safe Harbor Under the Anti-Kickback Statute

The Office of Inspector General (“OIG”) released the final rule amending the safe harbor regulation for electronic health records items and services.  The final rule, published in the December 27, 2013 Federal Register, extends the safe harbor until December 31, 2021; updates the provision under which electronic health records software is deemed interoperable; removes the requirement for electronic prescribing capability; excludes laboratories from protected donors; and clarifies the condition that prohibits a donor from taking any action to limit or restrict the use, compatibly, or interoperability of the donated items or services.

The safe harbor for electronic health records items and services is codified at 42 C.F.R. 1001.952(y) and allows for the donation of software or information technology and training services necessary and used predominately to create, maintain, transmit, or receive electronic health records, provided all of the conditions listed at 42 C.F.R. 1001.952(y) are met. The safe harbor was to expire on December 31, 2013.  In an effort to balance the goal to encourage further adoption of interoperable electronic health records technology and the potential disincentive to adoption and misuse of the safe harbor to lock in referral streams if the safe harbor were permanent, the OIG established the December 31, 2021 sunset date for the revised safe harbor.

In response to what the OIG identifies in the Final rule as “wide-ranging support from the entire spectrum of the laboratory industry”, laboratories are singled out as the only excluded donors.  42 C.F.R. 1001.952(y)(1)(i) provides that the software or information technology and training services are to be donated by “an individual or entity that provides services covered by a Federal health care program and submits claims or requests for payment, either directly or through reassignment, to the Federal health care program…”  Based on the industry wide support and high concerns of fraud and abuse by both donor laboratories and recipients, the revised safe harbor excludes laboratories from making donations.  Notably, this exclusion of laboratories does not apply to a laboratory that is a department of the hospital for Medicare purposes and that bills for the services through hospital’s provider number.

The Final Rule also amends what is known as the “deeming provision” at 42 C.F.R. 1001.952(y)(2), which requires donated software be interoperable, with interoperable defined in a note to this regulation. As amended, software is deemed to be interoperable if on the date it is provided to the recipient, it has been certified by a certifying body authorized by the National Coordinator for Health Information Technology to an edition of the electronic health record certification criteria identified in the then-applicable version of 45 CFR part 170.  The OIG clarified that the deeming provision is one way for parties to be certain of meeting the requirement of interoperability for the safe harbor, but if the donation meets the definition of interoperability located in the note to 42 C.F.R. 1001.952(y) then it would also meet the interoperability condition.

The Final Rule clarifies that the ordinary delay of 30 days until the effective date is waived in relation to the extension of the sunset date of the safe harbor, but the 30 day delay is in effect for the remaining provisions.  Thus, the safe harbor in effect as of December 31, 2013 will remain in effect until March 27, 2014, when the amended safe harbor will take effect.


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