New Safe Harbors for the Provision of Electronic Prescribing and Health Record Technology

(PYA Alert dated September 13, 2006)

Good news for those wanting to transition to electronic medical records! Effective October 2006, two new safe harbors under the Federal anti-kickback statute have been established to allow designated donors the provision of providing electronic prescribing technology and electronic health records software or information technology and training services to selected recipients. These donors may be Hospitals, Group Practices, or Medicare Advantage ("MA") organizations. Recipients may include network pharmacists or individual physicians. A brief summary of the final Safe Harbor structure includes:

Electronic Prescribing

What: Items include hardware, software, internet connectivity, and training and support services that are necessary and used solely to transmit and receive electronic prescription information.

Who: Protected donors and recipients are: hospitals to members of their medical staff, group practices to physician members, Prescription Drug Plan ("PDP") Sponsors and MA organizations to network pharmacists and pharmacies, and to prescribing health care professionals.

How: Donors may not select recipients using any method that takes into account the volume or value of referrals from the recipient or other business generated between the parties.

How Much: No limit on the value of donations.

Expiration: None

Electronic Health Records

What: Software necessary to create, maintain, transmit, or receive electronic health records. Software must include an electronic prescribing component. Software may include functions related to patient administration, e.g. scheduling, billing, and clinical support. EHR software must be interoperable. Hardware is not included.

Who: Protected donors are individuals and entities that provide covered services and submit claims or requests for payment to any Federal health care program and health plans. Recipients are individuals and entities engaged in the delivery of health care.

How: Donors may not select recipients using any method that takes into account directly the volume or value of referrals from the recipient or other business generated between the parties.

How Much: Recipients must pay 15% of the donor’s cost for the donated technology. The donor must not finance the recipient’s payment or loan funds to the recipient to pay for the technology.

Expiration: October 10, 2013

If you would like more information, please contact Marty Brown or Jon-David Deeson
at (800) 270-9629.

The information provided via PYA Alert, Tax Planning Alert, or Audit and Accounting Alert should not be construed as accounting, auditing, consulting, or legal advice on any specific facts or circumstances. The contents are intended for general information purposes only.  Please contact us at (800) 270-9629 to discuss your specific situation or to discuss any specific questions you may have.

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