CMS Proposes Rule to Extend EHR Donation Safe Harbor

April 10, 2013

According to a recently published document in the Federal Register, the Centers for Medicare & Medicaid Services (CMS) is proposing a rule that would extend a regulation that allows hospitals to donate electronic health records (EHRs) to physicians until 2016. The rule is an exception to a federal law that prohibits payments of particular services that are meant to encourage a referral back to the hospital.

Gabriel Perna

According to a recently published document in the Federal Register, the Centers for Medicare & Medicaid Services (CMS) is proposing a rule that would extend a regulation that allows hospitals to donate electronic health records (EHRs) to physicians until 2016. The rule is an exception to a federal law that prohibits payments of particular services from a hospital to a physician that are meant to encourage a referral back to the hospital.

In the document, which was released along with a similar proposed rule from the Office of the Inspector General, CMS proposes a three year extension of this exception to the last day of 2016 because “it corresponds to the last year in which one may receive a Medicare electronic health record incentive payment and the last year in which one may initiate participation in the Medicaid electronic health record incentive program.” They proposed an alternative sunset date of December 31, 2021, which corresponds to the end of the electronic health records Medicaid incentives.

Along with this proposed rule, CMS also put forth various interoperability and ePrescribing standard amendments to the rule exception. For interoperability, EHR systems will have to have been deemed interoperable by a certifying body that has been "established by the Office for the National Coordinator of Health IT (ONC)." In addition, it no longer requires EHRs be certified for interoperability 12 months prior to the donation, but rather it's aligning its timelines in this matter with the ONC. The CMS says the stated goals on interoperability reflect its interest in promoting the adoption of EHR technology that “benefits patient care while reducing the likelihood that donors would misuse electronic health record technology donations to secure referrals.”

In addition, CMS proposed removing the requirement related to electronic prescribing capabilities, which appeared in the original rule. It says there are alternative policy drivers supporting the adoption of electronic prescribing capabilities. CMS is taking comments on these proposed rules for 60 days.

The original safe harbor rule exception to the federal law was slated to end in 2013.