Fact Sheets

Exception to the Physician Self-referral Law for the Donation of
Electronic Health Records Items and Services

Exception to the Physician Self-referral Law for the Donation of Electronic Health Records Items and Services

Overview:

Today, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that revises the exception to the physician self-referral law (section 1877 of the Social Security Act) that permits certain arrangements involving the donation of electronic health records items and services. 

Extension of Expiration Date: Under current regulations, the exception expires on December 31, 2013. The final rule extends the expiration date of the exception for an additional eight years to December 31, 2021.

Interoperability: The final rule updates the provision under which electronic health records software is deemed interoperable. Additionally, in the rule, CMS clarifies the requirement prohibiting any action that limits or restricts the use, compatibility, or interoperability of donated items and services.  The revised regulation states that software is deemed to be interoperable if it is certified to an edition of the electronic health record certification criteria identified in the then-applicable version of 45 CFR part 170.  In addition, the regulation is revised to identify the National Coordinator for Health Information Technology as the office that authorizes certifying bodies for purposes of certifying electronic health records software.

Covered Entities: Under this final rule any entity furnishing designated health services other than a laboratory company is permitted to donate electronic health records items and services. CMS is finalizing the exclusion of laboratory companies from the types of entities that may donate electronic health records items and services. The final rule does not prohibit donations by any other type of entity.  Any arrangements for ongoing or continued donations between laboratory companies and referring physicians must be terminated before the effective date of the final rule.

Electronic Prescribing: Previous regulations required that donated electronic health records items and services must have the capability for electronic prescribing. In response to public comment, CMS is removing that requirement. Software donated prior to the effective date of the regulatory modifications set forth in the final rule must satisfy all of the requirements of the existing exception at 42 CFR § 411.357(w), including the requirement in § 411.357(w)(11).

This final rule will publish on 12/27/2013 in the Federal Register. The modification to 42 CFR 411.357(w)(13) is effective 12/31/13 and extends the availability of the exception through December 31, 2021.  All of the other revisions are effective 90 days (3/27/14).

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