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Electronic Dental Record Safe Harbor Rules

The federal government has created a number of initiatives to encourage the adoption of EHR/EDR systems by the healthcare industry, of which the currently running meaningful use program is a significant one. Another such measure was the introduction of “safe harbor” exceptions to the Stark Law and the anti-kickback statutes which govern physicians, hospitals and other healthcare groups.

What are safe harbor rules?
The Stark Law, enforced by CMS, prohibits physicians from referring patients to hospitals or other entities with whom they have a financial relationship. The anti-kickback statutes, enforced by the OIG, provides for prosecution of any individual or group found guilty of offering or receiving any payment in return for referrals which may be reimbursable under any federal aid program. These two laws were designed to protect against fraud and abuse of financial arrangements between healthcare entities.

However, many people expressed concern that the laws were too broad and could potentially cover even regular commercial transactions. This led regulators to create safe harbor exceptions which do not penalize beneficial arrangements. Both CMS and OIG have tried to align the safe harbor exceptions under the two laws to prevent ambiguity and confusion.

In 2006, the OIG finalized certain rules which allowed hospitals and similar groups to donate EDR and E prescription hardware, software or training services to physicians and their practices without being scrutinized for their business practices (Federal Register, August 2006). The final rules placed certain restrictions under which organizations could claim such protection including interoperability requirements, electronic prescription capabilities, a list of protected donors and an expiry date for the safe harbor.

Modifications to safe harbor exceptions
Last month, certain changes were made to the rules to reflect changing business practices and the healthcare environment (Federal Register, December 2013). These changes include:
1. The last day for safe harbor exceptions has been extended to December 31, 2021
2. Laboratory companies have been excluded from the list of protected donors
3. Any EDR software that is certified by the ONC as on the date of donation is considered to be interoperable
4. Donors are prohibited from restricting or limiting the use of the donated items by the recipient in any manner

Laboratory companies have been excluded for fear that they could lock in physicians into referring patients only to their offices and instead of competitors. It is also the reason that interoperability and donors being prohibited from limiting the use of donated EDRs was included. Safe harbor exceptions should go a long way in accelerating the use of EDR systems among physicians and hospitals alike.




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