Section 101 of the MMA directed the OIG and CMS to establish regulations that would protect arrangements involving the donation of technology used for receiving and transmitting electronic prescription drug information. Currently, such donations by one health care provider to another could potentially violate both the federal antikickback statute and the physician self-referral (Stark) law.

Both the OIG and CMS answered the MMA's mandate on October 11, 2005, publishing separate proposed regulations relating to electronic prescribing (e-prescribing). The OIG — the agency responsible for administering the antikickback statute — has proposed a narrow safe harbor for e-prescribing that applies to physicians, other prescribing health care professionals, pharmacies, and pharmacists. 70 Fed. Reg. 59,015 (Oct. 11, 2005) (to be codified at 42 C.F.R. § 1001.952(x)). CMS — the agency responsible for administering the Stark law — has proposed a nearly identical Stark exception that applies only to transactions involving physicians. In addition, CMS has used its regulatory authority to propose two new exceptions protecting the provision of electronic health records (EHR). 70 Fed. Reg. 59,182 (Oct. 11, 2005) (to be codified at 42 C.F.R. § 411.357(v), (w), (x)). Curiously, the OIG discusses at length a new proposed safe harbor for EHR, but does not include any proposed language for such a rule.

Under the OIG's proposed e-prescribing safe harbor, donors may provide items and services to recipients for the purpose of receiving and transmitting electronic prescription information. Such donations are protected if the following conditions are met:

The items and services must be in the form of hardware, software, or information technology and training services.

The items and services must be (1) necessary, and (2) used solely for the purpose of receiving and transmitting electronic prescription information.

The items and services are provided by (1) hospitals to physicians on their medical staff; (2) group practices to prescribing health care professionals who are members of the group practice; or (3) prescription drug program (PDP) sponsors or Medicare Advantage (MA) organizations to pharmacists and pharmacies participating in the network and to prescribing health care professionals.

The items and services must also be donated as part of, or used to access, an electronic prescription drug program that meets applicable standards under Medicare Part D.

The items and services may not be technically or functionally equivalent to items and services that the recipient already possesses or has obtained.

The donor may not take any actions to limit or restrict unnecessarily the use or compatibility of the items or services with other electronic prescription information items or services or electronic health information systems.

For items and services that are of the type that can be used for any patient without regard to payor status, the donor may not restrict, or take any action to limit, the recipient's right or ability to use the items or services for any patient.

The recipient may not make the receipt of the items or services a condition of doing business with the donor.

Neither the eligibility of a recipient, nor the amount or nature of the items or services, is determined in a manner that takes into account the volume or value of referrals or other business generated between the parties.

The arrangement must be set forth in a written agreement that is (1) signed by the parties; (2) specifies the items or services being provided and the value of the items and services; (3) covers all of the electronic prescribing items and services to be furnished by the donor; and (4) contains a certification that the items and services are not technically or functionally equivalent to items and services that the recipient already possesses or has obtained.

The donor must not have actual knowledge of, or act in reckless disregard or deliberate ignorance of, the fact that the recipient possessed or had obtained items and services that were technically or functionally equivalent to those donated by the donor.

The proposed Stark exception for e-prescribing is practically identical to the proposed antikickback safe harbor, except that it applies only to transactions involving physicians; i.e., it does not apply to pharmacies, pharmacists, or other prescribing health care professionals.

Although both the OIG and CMS acknowledge the need for additional protections relating to the donation of items and services that would promote the transition to electronic health records, only CMS actually proposed rules relating to EHR. The proposed rules come in the form of two exceptions, one to be implemented prior to — and the other subsequent to — HHS's adoption of product certification criteria (including the establishment of standards for interoperability, functionality, and privacy and security of electronic health information technology and training).

The proposed exceptions for EHR are similar to the e-prescribing exception. Items and services donated must be necessary and used solely to receive, transmit, and maintain EHR, so long as certain conditions are met. In addition, the donated technology must contain electronic prescribing capability that complies with the electronic prescription drug programs under Medicare Part D.

Unlike the e-prescribing exception, however, the donated items and services protected under the EHR exception are limited to those in the form of software or directly related training services, and significantly, do not include hardware. Items and services donated pre-certification may not include billing, scheduling, or other similar general office management or administration software or services, nor may the services include staffing of physician offices. The exception for items and services donated post-certification is less restrictive, although it still excludes staffing of physician offices and any items or services used solely to conduct personal business or business unrelated to the physician's medical practice.

The post-certification exception for EHR retains the condition that neither the eligibility of a physician for the items or services, nor the amount or nature of the items and services, be determined in a manner that is directly related to the volume or value of referrals or other business generated between the parties; however, the exception also contains a provision that some determinations will be "deemed not directly related" so long as certain conditions apply; i.e, the determination may be based on certain selection criteria. These criteria include (1) the total number of prescriptions written by the recipient, (2) the size of the recipient's medical practice, (3) the total number of hours that the recipient practices medicine, (4) the recipient's overall use of automated technology in his or her medical practice, (5) whether the physician is a member of the hospital's medical staff (if the donor is a hospital), and (6) determinations made in any reasonable and verifiable manner that is not directly related to the volume or value of referrals or other business generated between the parties.

Neither the OIG nor CMS have proposed a specific dollar amount for a cap on the value of the donated technology; however, both are soliciting comments in that regard.

The proposed e-prescribing safe harbor and Stark exception, as well as the proposed EHR exception, are necessary protections for hospitals and physicians as the integration of information technology becomes increasingly important. This is particularly true because these new technologies are intended to reduce medical errors and costs, and improve overall patient care. Where the OIG and CMS remain focused on the potential risks of program abuse, finding the right balance between meeting the needs of a technologically evolving health care industry and avoiding fraud and abuse may be an elusive goal. Some have questioned whether the protections — especially those for EHR — are adequate to ensure the continued development of new technology in health care.