Blog slider

  • LinkedIn
  • Twitter
  • Facebook
  • Google+
March 30, 2017
stark-law-exemption-optimum-healthcare-it

Understanding What is Required Under the Stark Law

You are considering rolling out your Epic Community Connect program and want to provide a competitive pricing model for your providers. Understanding the Stark Law rules of donation is key to avoiding an audit. Community Connect was started prior to allowing a designated health system to assist with the cost by donating up to 85%.  The main reason for Community Connect was to provide better patient care. Community Connect provides one shared medical record.

On April 27, 2004, President Bush signed an executive order establishing a new subcabinet-level position – the national health information technology (HIT) coordinator – and called for most Americans to have a computerized health record within ten years.  Here are a few reasons why.

  • Fewer medical errors
  • Increased use of clinical guidelines and evidence-based clinical decisions
  • Improved access to care and quality of care
  • Increased physician productivity
  • Improved coordination of care
  • Greater patient involvement in health

Due to lack of participation, on August 8, 2006, HHS & CMS published ruling (42 CFR Sec 411.357 and 42 CFR Section 1001.952)  A Designated Health system could now help subsidize the cost of an Electronic Medical Record. The following criteria have to be met.

  • Published in the Federal Registry
  • Allowing DHS (designated health care services) to donate portion of the EMR, up to 85% of costs
  • System must be Certified by CCHIT: interoperable
  • Can’t donate Hardware
  • Can’t be condition of doing business, based on referrals or other business generation
  • Can’t provide staffing to abstract, convert appointments without a fee included
  • Must be primary use of system (not personal use)
  • Arrangement must be in writing
  • Exceptions allowed based on the Following Conditions
    • Determination is based on number of prescriptions written
    • The size of Medical Practice (RVU’s, total patients, etc…)
    • Number of hours physician practices
    • Overall use of automated technology
    • Member of the donors formal Medical Staff-Most DHS use this as criteria for the donation

At the time many healthcare organizations started to analyze the motivation to offer Community Connect and provide a donation. Most CFOs need to understand the ROI (return on investment). Unfortunately, this is more anecdotal than metric driven.

stark-law-optimum-healthcare-itThe Stark Law clearly states that you cannot look into referrals gained from offering Community Connect. Anecdotally, you will find more patients stay within your health system to allow for one record and reduce repeat testing. Defining your program and strategy first will direct the level of subsidy you will provide. Calculating the total costs to deliver Community Connect is phase one. Be sure to include all software costs, hardware that may need to be purchased, build and design labor costs, implementation costs along with ongoing support. Remember to treat all clients the same, no special deals. Finally, you need to remember that swapping one EHR for another is only acceptable if it improves the technology such as inner-operability or adding additional functionality.

Just as a reminder to the designated health care services (DHS), the Internal Revenue Service published a memo on May 11, 2007, stating that hospitals providing assistance to physicians involving EHR’s must abide by the following:

  • Will not treat benefits provided as impermissible in violation of 501(c) (3) of the code.
  • Must comply with new regulations by HHS
  • Hospital may access all EMR created by physicians
  • Hospital ensures it is available to all medical staff
  • Hospital provides the same level of subsidy to physician

Optimum Healthcare IT has been there. We’ve done the work. We understand the challenges ahead, and we’re ready to help guide you!  Click here to learn more and download the brochure.

To Top