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Cleveland Clinic Health System

In order to foster the dissemination of the EHR, there needs to be definitional clarity and regulatoryrelief from Stark Law concerns.

The electronic health record (EHR) recently has become one of the most widely discussed, analyzed and promising developments in healthcare. For those who focus on the legal and regulatory aspects of the EHR, there is substantial discussion about how to make the EHR work in our highly regulated healthcare environment.

Most observers agree that federal direction and commitment are needed to establish and promote EHR standards across the country. Those standards, once established, should allow for rapid adoption of EHR and its benefits. At a high level, those benefits include improving the quality of patient care practices by, among other things, improving the accuracy and timeliness of the medical record and providing rapid access to patient information as well as clinical decision support software.

If a national standards setting effort is required to permit a new technology to take hold (as has been shown many times before), then federal government leadership is essential. EHR projects currently under way or in development by hospitals and large health systems are intended to expand beyond the physicians employed in those systems and reach community-based physicians. How this expansion occurs and at what cost to the parties are still somewhat open-ended questions. There are practical legal issues associated with EHR expansion. For example, in its 2005 report on Medicare Payment Policy to Congress, the Medicare Payment Advisory Commission stated: “Legal issues and uncertainties over legal restrictions may hamper efforts to create local health information exchange networks … and should be re-examined.”

One such restriction is the “Stark Law.” This law is designed to address the perceived irreconcilable conflict of interest between the power of a physician to refer and to profit from those referrals. The Stark Law is an exceptions law. That means that broad prohibitions are stated at the beginning of the statute and then numerous exceptions to those prohibitions are provided.

The two Stark prohibitions are:

1.Referral Prohibition: Physicians may not refer to an entity with which the physician (or immediate family member) has a financial relationship and when the referral is for one or more designated health services, unless an exception applies (see Figure 1); and

2.Claims Submission Prohibition: Neither the physician who makes a prohibited referral nor the entity that provides the designated health services for which the referral was made, may submit a claim to Medicare or Medicaid (see Figure 2).

Each prohibition is broadly worded. A violation of either prohibition does not require a showing of intent to violate the law. Instead the law is “self-executing,” and failure to know and follow the law can result in the improper receipt of federal health program funds by a physician or the entity from a prohibited referral or claim submission. The critical link in the Stark Law is between the physician (a referral source) and the entity where the referral is made for designated health services (a list of about 20 categories of healthcare items and services). That link is called a financial relationship and may be either an ownership or investment interest or a compensation arrangement. For purposes of the EHR discussion, if a hospital or health system provides EHR capability to a referring physician’s office and there is a financial relationship with the physician, the Stark Law probably is implicated. Such support may be hardware, software, personnel training, upgrades, clinical decision support, etc. In most EHR projects, if a financial relationship exists between a physician and a hospital or health system, it probably will be a compensation arrangement, as opposed to an ownership or investment interest.

For example, a physician may receive compensation from a hospital to serve as a medical director. That physician, who refers patients to the hospital for designated health services, also might receive EHR support from the hospital. If the hospital provides something of value to the referring physician, that value is referred to as remuneration. The crux of the current discussion of Stark and EHR is what remuneration may be provided by an entity to a referring physician in terms of EHR support, where the entity has a financial relationship with the referring physician. Unfortunately the current Stark statute is very broad and a regulatory exception to Stark to adequately address EHR dissemination currently does not exist. Further, definitional ambiguity exists with terms associated with the EHR, such as standards and interoperability. Thus it is difficult to craft a Stark exception in this area that works both for the private sector and for government oversight agencies. Nonetheless both groups are working hard to determine the Stark uncertainties associated with the EHR.

Definitional Challenges

Just as the definition of remuneration under the Stark Law presents regulatory obstacles, it also is a challenge to craft an acceptable definition of EHR or, more broadly, patient care support systems, that works for many different purposes, including a Stark exception. In particular, the medical and legal field is struggling with how to define the EHR. Responses to litigation discovery requests for “medical records that are maintained electronically” is one example of definitional ambiguity. State laws are, of course, a key resource for addressing this issue. For example, the Ohio Revised Code refers to the medical record as data in any form that pertains to a patient’s medical history, diagnosis, prognosis, or medical condition and that is generated and maintained by a healthcare provider in the process of the patient’s healthcare treatment.

Another source is the Medicare Conditions of Participation that specifies that the medical record must contain information to justify the admission and continued hospitalization, support the diagnosis, and describe the patient’s progress and response to medications and services. Generally recognized and accepted principles for describing the EHR should relate to characteristics or capabilities of the software that supports EHR, including:

• Contains the patient’s medical history and is an authoritative document that describes the healthcare services provided to patients;
• Provides a method for coordinated communication of patient treatment plans between physicians and health care facilities;
• Provides a source for documentation that supports healthcare service claims;
• Serves as a source or record of data for health outcomes research and related public health purposes;
• Serves as a repository for health data for research and education;
• Serves as a tool for clinical decision making and may have application for evidence-based medicine;
• Provides readily available data for planning and related business decision making.

These attributes of an EHR reflect how flexible and useful the EHR can be, if implemented across many provider sites. These same attributes illustrate the need for definitional clarity and regulatory relief from Stark Law concerns in order to foster the dissemination of the EHR.