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Give Till It Hurts

April 1, 2006
by Kathryn Foxhall
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Some industry groups say the proposed relaxation of HHS donation guidelines don't go far enough, others fear they may go too far.

How wide will the gates be flung open? Some in the health community are already working toward the day, expected soon, when rewritten regulations will allow hospitals, group plans and others to donate hardware, software and training to physicians without violating federal anti-kickback or physician self-referral laws.

But the American Hospital Association (AHA), the National Alliance for Health Information Technology and others say the exceptions that the Department of Health and Human Services (HHS) has proposed are not broad enough.

As part of the Medicare Modernization Act of 2003, Congress mandated that HHS relax rules to allow donations for e-prescribing. But HHS has gone farther under its authority to rewrite details of the anti-fraud rules. It has proposed more leeway for donations supporting electronic health records in general, to encourage adoption of the technology.

But, among the many other complaints, AHA notes that the proposals would not allow donations of software that includes administrative functions. The association points out that products on the market now increasingly integrate the two functions.

AHA also objects to the limitation of a hospital's donations to medical staff that furnish services at the hospital. With the increase in hospitalists and intensivists, it says, many doctors now admit patients, but other doctors care for the patients at the hospital. In those instances, information-sharing is even more important, the group argues.

Chantal Worzala, Ph.D., AHA senior associate director for policy, stresses that not all hospitals can donate these products, but many will and need greater assurance they will not be investigated for fraud. As hospitals discover the utility of electronic records, she says, "They now realize that actually sharing information with providers outside of their four walls would have even greater benefits."

On the other hand, David Brailer, M.D, Ph.D., President Bush's national coordinator for health IT, recently stressed to the National Committee on Vital and Health Statistics that opening the rules too far could lead to the abuses the laws were written to prevent, including physician's referring patients in exchange for gifts.

David Kibbe, M.D., M.B.A., of the AmericanAcademy of Family Physicians, says his center is already advising doctors and hospitals on connected systems, including the anticipated donations. But Kibbe, who heads the group's center for IT, emphasizes there is "something of a divide" between vendors that serve hospitals and those that serve outpatient and ambulatory care environments. In light of some companies' impressive innovations, he says, it's important to preserve physicians' choice of using those products "sold by companies that really understand ambulatory care, workflow and communication processes much better than others."

One important aspect of the HHS proposals is the plan to use the rules to encourage interoperability of electronic records. In the future, after HHS adopts a standard for certifying electronic health records, any donations would have to meet that certification. And the certification will include a stamp of approval for interoperability. The private Certification Commission on Health Information Technology is currently working under a federal contract to create a model certification process.

The rules were proposed in the Oct. 11 Federal Register, with two agencies within HHS — the Centers for Medicare and Medicaid Services and the Office of Inspector General — each presenting draft regulations. (Federal Register at Although the proposals contain many pages of government lingo, they include a table with an overview of who could give what to whom.

As of February, HHS staff were still mulling the lengthy comments from numerous industry segments. No one was predicting when they will publish the final regulations, and the rules could change before they are final. Brailer has indicated the agency published the draft with the full intention of carefully weighing issues brought to light during the comment process.

Kathryn Foxhall is a freelance writer based in Hyattsville, Md.