Legal Challenges in Electronic Health Record Donation: Anti-Kickback Statute Violations
Introduction
Compliance with healthcare laws is highly important in compliance with the legal obligations to the public and in preventing fraud or other official violations. The case presented, in which the medical practice receives an offer from the vice president of a local hospital, demonstrates a controversial example of financial assistance. The offer to pay most of the cost in exchange for related services, namely the referral of patients to a specific provider and different types of advertising for the services of a specific healthcare facility, is not legal.
In particular, the Anti-Kickback Statute is an adequate and weighty legislative framework that dictates the principles of gratuitous care in healthcare and establishes clear liability limits, the violation of which is fraught with severe legal proceedings. The structure of the proposed donation by the hospital’s vice president is contrary to the existing regulatory framework and cannot be considered an adequate proposal.
Basic Requirements for Financing the Purchase
To finance the purchase of an EHR system, the hospital must consider the appropriate deterrents in the existing legal framework. Nelson and Staggers (2018) cite “a donation safe harbor” created “to facilitate physician adoption of EHR technology” (p. 427). This regulation suggests the appropriate course of action that is acceptable within the framework of grant assistance.
Payment of no more than 85% of the associated hardware and software costs is permitted, and the total donation of an EHR technology is prohibited (Nelson & Staggers, 2018). These conventions are written into official legislation designed to protect unscrupulous donors from influencing those to whom they donate specific equipment. Accordingly, in the case in question, the vice president could offer the medical practice to pay 85% of the cost of a new EHR system without making any additional demands or hidden arrangements in exchange for such a service.
Current Fraud and Abuse Regulations
Under the current fraud and abuse regulations, the proposed action, namely the payment of 85% of the purchase in exchange for services in return, is impermissible. While describing safe harbor rules, Nelson and Staggers (2018) mention the Anti-Kickback Statute, one of the essential laws in public health. Under the terms of this regulatory framework, the situation described in the case is illegal. In the healthcare field, gratuitous aid is allowed subject to the accompanying principles associated with safe harbor regulations (“Fraud & abuse laws,” n.d.).
Nevertheless, as applied to the vice president’s proposal to the medical practice, reverse services involving hospital advertising and patient referral are a severe violation of the law. They can cost the violating party tens of thousands of dollars in fines (“Fraud & abuse laws,” n.d.). As a result, the described scenario represents an impermissible interaction model.
Steps to Make the Transition Compliant
To avoid punishment and comply with all legal principles when concluding a transaction, the parties involved in the case under consideration must take into account specific steps to take. Firstly, the vice president should withdraw the proposal to refer patients and advertise the hospital. Secondly, the donor needs to make sure that the new EHR system has passed the mandatory certification procedure. According to Nelson and Staggers (2018), only if approved by the relevant federal board, namely the National Coordinator for Health IT, is the introduction of digital equipment acceptable in the workflow.
Otherwise, both parties may be held liable for failure to meet the existing legal regulations on the inadmissibility of the use of unlicensed equipment in regular practice and the provision of healthcare services to the population. Thirdly, as mentioned above, with the proven certified status of the EHR system, no more than 85% of its cost can be paid by the donor. Subject to all these conventions, the parties may sign a legal agreement to acquire the EHR system and not violate the existing official regulations that thoroughly track fraudulent schemes.
Issues Concerning the Use of EHR and Healthcare Fraud
When applied to the issues related to healthcare fraud, the use of EHR is often fraught with problems and potential violations. Nelson and Staggers (2018) note that the most common issue is associated with the algorithm for purchasing relevant electronic equipment. Unable to buy often costly EHR systems, medical units are forced to make agreements with the heads of hospitals and other healthcare institutions and seek assistance in financing such purchases.
However, when taking into account the aforementioned restraints, the violation of a number of conventions in this procedure may entail not only administrative but also criminal liability for the misuse of budgetary funds. Paying for patient referrals, as mentioned in the Anti-Kickback statute, is also a common form of fraud (“Fraud & abuse laws,” n.d.). Deliberately creating win-win conditions whereby one party pays for the purchase of technical equipment and, in return, asks to advertise specific services and refer patients to a certain provider is a severe violation, and this is exactly the example described in the scenario under consideration, which indicates the fraudulent nature of the potential transaction.
Risks of Facilitating Healthcare Fraud
The presented EHR system, despite its effectiveness and relevance to the needs of the medical practice in question, may potentially facilitate healthcare fraud. Firstly, given the nature of the existing legislation, voluntary financial assistance from a third party in exchange for a specific service, namely patient referral, is a severe violation (“Fraud & abuse laws,” n.d.).
Secondly, in the considered scenario, there is no mention that this EHR system has passed the mandatory certification procedure, and all information is offered exclusively by the sales representative. This means that if illegal software is misused to deliver public health services, litigation is inevitable because only officially approved electronic equipment can be utilized in regular practice (Nelson & Staggers, 2018). Therefore, the engagement of such an EHR system by both the considered medical team and other units under the conditions described is a fraudulent premise and is fraught with serious sanctions from the supervisory authorities.
Conclusion
Under the existing law, the proposal from the hospital’s vice president is not in compliance with federal regulations and falls under the category of healthcare fraud. The Anti-Kickback Statute defines the principles of gratuitous assistance provided as donations and prohibits any bilateral agreements, including patient referrals. For the offer in question to be legally valid, the hospital must pay no more than 85% of the EHR system and make sure the software is certified. Otherwise, the risks of litigation are high, and the hospital management may incur both administrative and criminal liability. The considered case is one of the examples of healthcare fraud.
References
Fraud & abuse laws. (n.d.). Office of Inspector General, U.S. Department of Health and Human Services. Web.
Nelson, R., & Staggers, N. (2018). Legal issues, federal regulations, and accreditation. In Health informatics: An interprofessional approach (pp. 422-433). Elsevier.