August 18, 2008
The Centers for Medicare and Medicaid Services created a Stark Act exception and an Anti Kickback Statute safe harbor in 2006 to allow hospitals and other entities to provide physicians with software and other assistance relating to the implementation of electronic health records (“EHR”) systems. However, tax-exempt hospitals still were concerned with private inurement issues related to the donation of EHR systems to physicians.
On May 11, 2007, the Internal Revenue Service issued a memorandum entitled “Hospitals Providing Financial Assistance to Staff Physicians Involving Electronic Health Records” (the “IRS Memorandum”) approving the furnishing of EHR technology by tax exempt hospitals to their medical staff physicians.
The IRS Memorandum allows a tax-exempt hospital to donate EHR technology to physicians if the hospital meets not only the regulatory requirements found in the Stark exception and the Anti Kickback safe harbor, but certain additional requirements. The regulatory exceptions were set forth in the July 28, 2008 list serve entitled “Increased Interest in Electronic Health Record Donations under the Stark Act: Nine Issues to Consider.” The additional requirements set forth in the IRS Memorandum to permit such donations are as follows:
Thus, if a tax-exempt hospital meets the criteria set forth in the Stark Act exception, the Anti Kickback Statute Safe Harbor and in the IRS Memorandum, then the tax exempt hospital’s donation of EHR technology will not likely constitute private inurement.
If you have any questions regarding these requirements, please contact us.