OIG Ends Donation of EHR from Laboratories

For years, small laboratories (hospital based and independent alike), have struggled to compete for business with larger national laboratories.  One major reason is due to an exception to the Stark Law and safe harbor exception to the Anti-Kickback Statute allowing laboratories to “donate” a large portion of expense towards Electronic Health Record (EHR) systems and interfaces.  This was allowed as long as the EHR was used to transmit test orders and results, improving patient care.  As of January 1, 2014 this loophole has officially been closed.

In the CMS Final Rule, released late last year, the Department of Health and Human Services Office of the Inspector General (OIG) and CMS removed laboratories from the list of protected EHR donors.  This is great news for the “little guy,” who has been unable to match offers of close to free systems with expectation of making up the cost in referred work.   Considering referring offices are not required legally to send work to the laboratories that donated their EHR, the table is set for laboratories to go back to competing based on patient care, service and other value based metrics.