October 16, 2015 Practice Points

OIG Issues Alert on Data Arrangements and AKS Safe Harbor Exception

“Blunt message from the OIG: follow the EHR safe harbor closely, and beware if you are using EHR donated technology to block information from competitors.”

By Eric W. Shannon

The U.S. Department of Health and Human Services, Office of the Inspector General (OIG), issued an alert on October 6, 2015, relating to information blocking and the Federal Anti-Kickback Statute (42 U.S.C. 1320a-7b(b)) (AKS). The AKS prohibits individuals and entities from knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward referrals of business reimburseable under any federal healthcare program. Violation of the AKS can result in imposition of criminal penalties, civil monetary penalties, program exclusion, and liability under the Federal False Claims Act (31 U.S.C. 3729–33).

The OIG “policy reminder” addresses a growing trend in the healthcare industry—arrangements involving the provision of software or information technology (IT) by providers (such as hospitals) to an existing or potential referral source (such as a physician practice). The Electronic Health Record (EHR) safe harbor under the AKS enables certain donors to provide interoperable EHR software, IT, and training services to potential referral sources, provided that there are no restrictions to the use, compatibility, or interoperability of donated items or services. 42 CFR § 1001.952(y)(3). The goal of the safe harbor, according to the OIG, is “to protect beneficial arrangements that would eliminate perceived barriers to the adoption of EHR without creating undue risk that the arrangements might be used to induce or reward the generation of [federal health program] business.” 71 FR 45111 (Aug. 8, 2006).

In its reminder, the OIG focused on the parameters of the EHR safe harbor and provided examples of conduct that would fall outside of the safe harbor and thus be actionable under the AKS. For example, an agreement between a donor and a recipient to limit a competitor from interfacing with the donated items or services is prohibited by the statute. Further, even an agreement between a donor and an EHR vendor to charge non-recipient providers or suppliers high fees may be actionable. The OIG also encouraged whistleblowers to come forward with knowledge of “potentially problematic donation arrangements”—often referred to as “data/information blocking”—that may violate the safe harbor.

“Healthcare providers and health IT vendors should pay close attention to OIG’s Alert,” according to the law firm Cozen O’Connor. “Blunt message from the OIG: follow the EHR safe harbor closely, and beware if you are using EHR donated technology to block information from competitors,” added another commentator.

— Eric W. Shannon, Debevoise & Plimpton LLP, New York, NY


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