New rules permit hospitals, others to donate EHR, e-Rx technologies to physicians

From the Medical Group Management Association (

The Department of Health and Human Services (HHS) has created exceptions to the physician self-referral statute ("Stark law") and crafted a new safe-harbor provision under the federal antikickback statute permitting the donation of certain technologies from certain sources to physicians.

The rules allow the donation of particular electronic prescribing (e-Rx) technologies and create a separate exception for some arrangements involving the provision of nonmonetary remuneration in the form of electronic health record (EHR) software or information technology and training services used predominantly to create, maintain, transmit or receive EHRs.

Those allowed to donate e-Rx technology and their recipients include:

  • Group practices to their physician members;
  • Hospitals to members of their medical staffs;
  • Prescription-drug plan sponsors; and
  • Medicare Advantage organizations to prescribing physicians.

Regarding EHR donations, any entity furnishing designated health services (per the Stark law) and certain other entities under the safe-harbor exception, may donate interoperable software, information technology and training services to physicians and certain other recipients. Group practices, hospitals and laboratories are among the approved donors.

To prevent potential abuse of the changes, HHS stipulated that the volume or value of a physician’s referrals, the amount or nature of the items or services received, or other business generated between parties cannot be considered when determining whether the physician is eligible for the donations.

The e-Rx rules stipulate that technology and services “necessary and used solely to transmit and receive electronic prescription information” can be donated. This includes hardware, software, Internet connectivity, and training and support services.

Regarding EHRs, the following can be donated:

  • EHR software (software packages may include functions related to patient administration – scheduling functions, billing and clinical support – and must include electronic prescribing capability);
  • Patient portal software;
  • Interface and translation software;
  • Rights, licenses and intellectual property related to EHR software;
  • Connectivity services;
  • Clinical support and information services related to patient care;
  • Maintenance services;
  • Secure messaging; and
  • Training and support services (such as access to help desk services).

The following donations are not permitted:

  • Hardware;
  • Storage devices;
  • Software with core functionality other than EHRs (for example, human resource or payroll software);
  • The provision of staff to physicians or their offices; and
  • Items or services used by a physician primarily to conduct personal business or business unrelated to the physician’s practice.

e-Rx donations must comply with federal standards, and EHR software must be interoperable at the time of the donation. This interoperability will be approved by a certifying body recognized by HHS – most likely the Certification Commission for Health Information Technology.

Although the rules establish no limit on the value of e-Rx donations, physician recipients must pay 15 percent of the donor’s cost for the EHR technology and training services. In addition, the donor may not finance the physician recipient’s payment or loan money to the physician to pay for the items and services.

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