All health plans and providers that do business with Medicare, Medicaid and other federally sponsored health programs soon
will have to adopt information technology standards and quality-measurement tools. The Medicare Modernization Act of 2003
(MMA) requires the Department of Health and Human Services (HHS) to establish standards for electronic prescription drug prescribing
by 2008, and this policy is driving broader efforts to build health IT systems.
HHS Secretary Mike Leavitt told the National Governor's Assn. last month that a presidential executive order will clarify
the administration's e-health policy as a way to spur development of uniform methods for measuring and reporting important
health data and treatment outcomes. Initial standards will cover basic health IT functions: registering patients, reporting
lab results, writing prescriptions and providing secure communication channels between patients, doctors and healthcare providers.
HELPING DOCTORS
An important initial step toward a national e-health system is to establish rules and standards for electronically transmitting
prescriptions for drugs from prescribers to pharmacists. The MMA requires prescription drug plans (PDPs) and Medicare Advantage
(MA) organizations to support electronic prescribing. However, health IT implementation remains voluntary for physicians and
pharmacists, who still regard reporting standards and e-health adoption as a costly and time-consuming undertaking. To ease the pain for doctors, HHS issued new rules last month clarifying that certain healthcare organizations, such as hospitals,
nursing homes and health plans, may donate health information technology and services to providers. Federal anti-kickback
and self-referral laws normally prohibit physicians from making referrals to any hospital, lab or other healthcare entity
with which it has a "financial relationship." Because donating e-prescribing technology could be regarded as such a link between
donors and physicians, the MMA directed HHS to create an explicit exception and "safe harbor" for "protected donors" to give
doctors e-health equipment and teaching them how to use it.
MHE Executive View
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Consequently, the Centers for Medicare and Medicaid Services (CMS) and the HHS Office of the Inspector General (OIG) issued
rules last month spelling out that it is legal to give doctors products and services related to electronic prescribing and
electronic health records. The final rule makes a point of extending the safe harbor to software that deals with other health
system functions, such as billing and scheduling, as well as e-prescribing. And it specifies that covered software must be
interoperable and comply with HHS standards.
Initially, not all health plans were on the list of "protected donors" because many are not directly involved in delivering
care. However, MCOs and insurers convinced HHS policymakers that a broad range of plans should be included because they work
closely with physicians to promote utilization of e-health technology. Thus, the safe harbor protections were extended to
all health plans, including PDPs, MA organizations and Medicaid managed care plans for their "central role" in encouraging
adoption and use of e-prescribing and health records systems; plans are unlikely to use their IT donations to induce physicians
to boost prescription drug utilization because MCOs have incentives to limit inappropriate prescribing.
The new regulations will improve care by giving doctors and other healthcare providers "needed support for interoperable health
records that enable them to increase quality and improve efficiency," commented CMS Administrator Mark McClellan, MD.
But to minimize any perception that IT donations might influence a doctor's prescribing decisions, the giveaways cannot be
totally free. HHS requires recipients to pay 15% of the cost of the e-health technology and cautions donors not to give software
and services only to those providers with high referral rates. In addition, the safe harbor protections sunset at the end
of 2013, a time frame designed to spur development of an e-health infrastructure by then.
COMPLEX LEGISLATION
Meanwhile, both the House and Senate have enacted separate bills to support health IT standards and implementation, but with
significant differences. Now the big task is for congressional leaders negotiating a legislative package acceptable to the
two bodies.
