AHIMA Comments on Stark/Self Referral NPRM to the Centers for Medicare and Medicaid Services

December 9, 2005

Mark B. McClellan, MD
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Attention: CMS-1303-P
Room 445-G, Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201

Re: RIN 0938-AN69 (File Code CMS-1303-P)

Dear Dr. McClellan:

On behalf of 50,000 professional health information management (HIM) members, the American Health Information Management Association (AHIMA) welcomes this opportunity to comment on the Center for Medicare and Medicaid Services' (CMS) proposed rule to create exceptions to existing regulations in order to permit the sharing of electronic prescribing (e-Rx) and electronic health records (EHRs) with physician offices, as described in the October 11, 2005 Federal Register (70FR59182). AHIMA welcomes CMS' attempt to modify existing Medicare self-referral regulations in order to support efforts by the healthcare industry and the Department of Health and Human Services (HHS/Department) to support eRx and develop a standard EHR and a nation wide health information network leading to interoperable health information, to serve the patient and the population.

AHIMA is a 77-year-old professional association representing more than 50,000 educated and certified HIM professionals who work throughout the healthcare industry. HIM professionals serve the healthcare industry and the public by managing, analyzing, and utilizing data vital for patient care and making it accessible to healthcare providers, plans, researchers, and other appropriate parties where and when it is needed most. AHIMA members are active in a variety of healthcare sites and organizations leading the conversion from the paper healthcare record to the standard EHR and working with the industry and the HHS Secretary and Department to see the establishment of an interoperative nation wide health information network (NHIN).

AHIMA is supportive of CMS and HHS' desire to further our electronic health information goals with these October 11 proposed rules. We have reviewed your proposal and made our comments from the perspective of a profession that manages health information and serves as the custodian of such information. Furthermore as noted, HIM professionals are deeply involved in the transformation of the healthcare industry from paper to electronic-based information and are active in multiple efforts to see the achievement of a standard electronic health record (EHR) and full interoperability as soon as possible.


General Comments

While AHIMA commends CMS and the Department's efforts to support the goals noted above, it is clear that the self-referral regulations as they are currently written, and these proposed rules do not fully acknowledge the current state of the healthcare industry.

The proposed regulations are narrow in their focus and presume that only hospitals or health systems may be in a position to provide electronic prescribing (eRx) or EHR components to physician practices or similar entities. In fact, such items, along with a variety of support elements including connectivity, software, technical support, training, and so forth could come from a variety of entities including health plans and similar organizations, possibly even those contracted with CMS to deliver a number of products associated with the Medicare or Medicaid programs. Any regulations written at this time should take into account the potential for a wide variety of entities to supply a variety of eRx or EHR components to physician practices and similar provider entities.

It is clear that authority for the proposed regulations is taken from Section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act 2003 (MMA), and Section 1877 (b) (4) of the Social Security Act. We note that the former was written in 2003 and makes presumptions that are not reflective of the current environment, while the authority from the Social Security Act, used under the latter part of the proposed rule, is not used broadly enough to encourage and support the use of both eRx and EHR. AHIMA recommends that CMS and HHS, including the Office of the National Coordinator for Health Information Technology (ONC) and the American Health Information Community (the Community or AHIC) reconsider the approach to providing exceptions to the self-referral regulations in light of today's environment and the roles and goals of the Community and ONC. Only through such coordination can the industry hope to achieve the President's goals for interoperability by 2014 and eRx by 2008.

It is also appropriate to note that the proposed anti-kickback safe harbor regulations, being proposed simultaneously with these proposed regulations, takes an even narrower view. While enforcement of the self-referral and anti-kickback regulations has identified and prosecuted significant levels of fraud in the healthcare industry, such enforcement has also created a fear of stepping out of line even for legitimate purposes. If the two proposed rules cannot be modified to coordinate restrictions on providing or donating eRx and EHR devices, software, communication, support and training across the healthcare industry, then the fear of noncompliance will serve as a significant barrier to any progress the industry can make to improve quality, reduce injury, and achieve interoperability. Therefore, as the industry and various groups such as CMS, HHS, ONC AHIC and the Congress consider means to assist progress, the Office of the HHS Inspector General (OIG) and similar agencies must be involve in coordinating these regulations as proposed by CMS and the OIG.

Your proposed rule is written essentially in three parts: eRx, EHR "pre-Interoperability Exception," and EHR "post-Interoperability Exception." AHIMA is concerned with this three-part approach and the limited flexibility displayed in the regulations that could cause problems in the future:

  • While we understand the MMA eRx is an important consideration for CMS, however, the assumptions for current relationships between eRx and electronic health records and eRX and a standard EHR, is not reflective of the existing environment. eRx and similar prescribing functions exist in a variety of relationships and combinations with other electronic software, and the regulations suggested by CMS does not reflect these combinations in today's healthcare environment.
  • AHIMA has led the establishment of a certification commission and the process of certifying health information technology (HIT). Because of the involvement of our members and staff in this work, we understand the intent of the regulation, pre and post, as proposed. Unfortunately, we do not believe that many in the industry currently understand the role and position of the commission and we doubt that this "pre and post" approach makes much sense to them. Since the timetables for this regulation and for the standards and the criteria it addresses are not known, we recommend that CMS consider writing the regulation from the perspective of "pre-Interoperability Exception" and not address the "post" era until sometime in the future. We also suggest the regulation state, however, the intention of CMS and HHS to revise the regulations in the future to take into account the development and adoption of standards and product criteria. This will keep the industry and its vendors fully informed of the Department's intention and will keep all aware of the need to produce products that will assist the industry in meeting its needs and its goals.
  • We noted the rapid development and change going on in the healthcare industry and HIT. We believe these regulations should be written to acknowledge change as well. CMS has a variety of internal HHS and industry advisors that can provide a sense of the change. Regulations should be written, whenever possible to allow adjustment for change and not have to be rewritten periodically. While we are sure the "pre and post" process was an attempt to do this, our concern is directed more toward assumptions of what software packages will look like, as well as healthcare delivery structure.

The original self-referral or Stark laws were written to address and prevent fraud. These proposed rules are written with a strong assumption that movement toward eRx, and adoption and use of an EHR will accelerate fraudulent practices and raise the cost of healthcare. AHIMA is well aware of the fraud issue and we have addressed this concern in a couple of studies conduced under the auspices of the ONC, namely: Use of Health Information Technology to Enhance and Expand Health Care Anti-fraud Activities and Automated Coding Software: Development and Use to Enhance Anti-Fraud Activities. (See: http://www.ahima.org/fore/programs/research.asp)

AHIMA believes that the appropriate adoption of a standard EHR and other health information standards will decrease the potential for fraud. Many organizations, including the Institute of Medicine (IOM) and CMS have also pointed out that eRx and the EHR lead to improved quality, reduced injury, and other outcomes that reduce the cost of healthcare. While AHIMA applauds several positive items in the proposed rule to eliminate fraud, we are concerned that aspects of the rule where attempts to ascertain value and costs of donations, for the purpose of fraud protection, will become barriers to adoption or a reduction on the return on investment for eRx and the EHR.

In the "Covered Technology" section (70FR59188 - center column) you announce that you are considering including in the final regulations "a definition of 'electronic health records' for purposes of the exception." AHIMA is very concerned with this attempt especially in light of current work underway to consider the legal and business definition of an "electronic health record." We are not in a position to make a recommendation to CMS with regard to a definition at this time and we are not sure that it is a definition of the EHR that CMS should be considering; rather you should be considering elements of a standard EHR in line with activities of groups like the Commission for Certification of Electronic Health Records (CCHIT), Health Level Seven (HL7), and so forth. This progress will take time. AHIMA is active in a number of these issues and projects and would like to work with CMS and HHS on this issue, before it is considered so narrowly.

"Necessary" Non-Monetary Remuneration

  • AHIMA concurs it is not in CMS' best interest to sanction or provide duplication in the introduction of HIT hardware, software, and so forth in the same practice. However, while the industry is moving to standardization, most physician offices and many other entities are incapable of determining the extent to which a device or software may be duplicative of a part of some other device or software. (One commenter suggested that this was akin to having the average household determine how many remote-control devices were really needed for various media and manufacturers.). Accordingly, we do not believe that most physician offices, or other similar healthcare entities, are capable of certifying that items and services provided are not technically or functionally equivalent to those already possessed by the physician.
  • AHIMA members also note that eRx, is in many cases, software that may exist in a larger domain of an electronic medical record. Therefore this potential regulation becomes a problem if the newly introduced device or software duplicates a part of previously acquired software. Physician offices or other groups should not have to worry about such situations, especially in this age of rapidly developing and evolving software.
  • AHIMA members also point out that a physician office could have a relationship with a hospital, but then as part of a local or regional health information exchange, have a second relationship that might require the practice initially to have more than one piece of software. This is somewhat similar to hospitals which in the past had a different computer terminal in order to send different health plans exactly the same information. With standards this will change and improve, but the industry has not reached the use of such standards combined with application software at this time.
  • Members note that physician offices are very concerned with potential violations of the anti-kickback and self-referral regulations and will avoid situations that provide potential risk to their practice. Our fear is that a requirement, such as this, may cause physician practices to avoid participation in the information exchange or cause them to limit such exchange to with one partner, which negates the goal of interoperability.
  • Except for large practices already invested in HIT, our members do not see many practices that invested heavily who would then divest in favor of shifting costs to the designated health services (DHS) entity. We are aware that while there are a few DHS entities that can afford such a shift, the majority of health provider entities do not have the capital to do so and if they have spent the time to develop and use such software, their preference would usually be to keep it. While this does not suggest that inappropriate activities might not occur, we believe that an accounting of such sharing by the DHS entity should be required and could be audited. Meanwhile, let's not forego the opportunity to reach our goals for appropriate information sharing and recognize the potential administrative savings that will benefit the industry as a whole.

"Used" Solely


  • CMS recognizes that a device may be used for more than one function and software may be bundled and can perform more than one function. This is today's HIT reality. We are concerned, however, with the use of the term "substantial use" as it applies in this section of the proposed rule. At what level is "substantial use?" Does it only apply to Medicare patients? Is it describing use for a week, a month, a year? How will a physician's office account for use? Could the accounting become such a burden that it is better to not use the device or software? MMA's goal was in part to lower the error or injury rate associated with prescriptions. We believe that the overall goal is the interoperable exchange of health information to better serve the patient and the population, and this implementation will also result in cost savings. As long as the device or software supports these goals, we do not believe it is in the best interest of the nation to develop an accounting for the volume use of such devices or software.
  • The need for a cap on the nature and amount of expenditures provided to physician practices and similar entities is understandable, but we don't know how such a cap can be determined given the nature and growth of HIT. Such values change rapidly and vary across the country and the industry. A device or software that might cost $2,000 today may only cost $600 six months from now. Costs vary by what's in a product and other vendor factors and, as the proposed regulation notes, there may be some single-use devices. But, there will also be multi-functional devices and both might be appropriate. If an institution wants to share devices, software, and so forth and can meet some of the requirements that should remain in the rule, then we believe that healthcare profits are weak enough, and physician's desire for independence is strong enough that developing caps and similar data should take an hiatus.

Designated Health Services (DHS) Entities Protected by the Exception

  • AHIMA believes that all DHS entities should be included in the rule and not just hospitals or health networks. To benefit from interoperability or even from just prescription information could result in information exchange beyond that currently listed by CMS. For instance, the function of prescribing should also take into consideration medication histories, laboratory results, and so forth, not just the function of writing and transferring the prescription itself. The long-term goal of improving health, reducing risk, and achieving interoperability and administrative savings is not served by limiting these exceptions to just hospitals. CMS and the Department should broaden its approach to achieve the maximum potential for these goals and not keep itself in the boundaries of healthcare delivery in the 1980s and 1990s.

Promoting Compatibility and Interoperability

  • This is an important issue. AHIMA agrees with the department that HHS and the industry should be promoting compatibility and interoperability. We acknowledge the statement that technology must be in accordance with standards, and not all the standards necessary for full interoperability exist today. We further agree with the CMS that these regulations should promote an environment that is more than just the sending and receiving of electronic prescription information and as such could and should cover other services, orders, and so forth. AHIMA agrees with the concepts identified in the definition suggested in this section (70Fr59186), but we must note that to be truly interoperable, the industry must also come to agreement on the uniform definition and terms that are exchanged in the systems, applications, and networks described here. To date HHS has fallen short in this arena and CMS continues to support an environment where multiple data elements or codes have been developed that carry the same definition.

Value of Protected Technology

  • AHIMA understands CMS' concern with capping the amount of items and services provided under the proposed protections. We can only reiterate that arriving at such caps and then applying them to software or devises that may or may not have exclusivity of function or role will be very difficult and hamper forward progress. As noted, the costs of such items - software, support services, training and so forth will vary by region, size of the supplying organization (that may have access to discounts that others may not have), and so forth. We sympathize with the problem this creates for CMS, but believe that it should be judged in the context of the total goal of interoperability and not just that of eRx.

Other Conditions

  • We agree with the conditions listed in Section 411.357 (v) except for:
    • (1) - Too limited on the providers and receivers of such items, support, and services
    • (7) (ii) - While the items or services being provided should be specified in an agreement, it must be noted that the value of such is not consistent and should not be used alone to determine any violation of the regulation.
    • (7) (iv) - this requires a certification by the physician on equivalency of technology or functionality, we do not believe most physician offices, or many others are capable of making such a certification.
    • (8) - similar to 7 (iv), this requires knowledge not generally possessed by the entity or the physician.
  • Sections 411.357 (w) and (x) are similar to (v) and we have noted above our concerns on a pre and post set of requirements.
    • We must note that (w) (9) calls for knowledge that "the electronic health records technology contains electronic prescribing capability that complies with the electronic prescription drug program standards under Medicare Part D at the time the items and services are furnished." It is not clear who pre-CCHIT would certify in this case - the provider or the vendor?
  • We agree that an item or devices should be functional for all patients and with all potential exchange (prescription, supply orders, and so forth) partners, assuming the use of uniform standards. Accordingly, where and when uniform standard exist, have been harmonized, and certified, we agree it is improper to offer devices or items, under the protection of these proposed regulation, that do not meet these criteria.

Covered Technology

  • While AHIMA has noted that some current electronic medical record systems include a form of eRx, it is not appropriate to assume that all eRx systems should be or are part of an EHR product or item bundle.
  • Regulation should not make any assumptions that a particular component of an EHR should or should not be able to perform the same functions, pre-certification. When standards are applied, and product criteria are developed, then, at some point, an entity should be required to send or receive transactions according to the uniform standard. We disagree with the concept of requiring computerized provider order entry (CPOE) as a component of an EHR, as proposed on 70FR59188, at this time. Likewise, while we realize that CMS might want to exclude software that includes, say an electronic billing system. But, it must recognize that such exclusion could become a barrier to a physician office or other group whose software combines such a function with that of eRx or some functions of an electronic record.
  • As noted above, AHIMA is concerned with CMS developing a definition of the EHR in these regulations. However, we recognize that what CMS wants to do is determine functions that may be part of an EHR so as to determine software packages, devices, telecommunications needs, support, training and so forth that should be identified in these regulations. Since the AHIMA, HL7 and others are working in this area, we recommend that designating such software packages not be done until more work is complete and the certification commission has designated appropriate criteria.

Standards with Which Donated Technology Must Comply

  • AHIMA agrees that any donated or shared software should meet the standards established by the Secretary. However, we must also note that there will be a period of implementation before any compliance date is reached, and it should be clear that the standards requirement or any criteria requirement will only become required, after the appropriate compliance date, presuming the parties or entities involved are covered by that standard requirement.
  • The proposed regulation also notes consideration of requiring protected software to comply with relevant Public Health Information Network preparedness standards, such as those related to BioSense. These standards have not been made a requirement by the Secretary on Medicare providers or other providers in the healthcare industry to our knowledge. Therefore, unless CMS intends to make this part of the Medicare Conditions of Participation and institutes a standard transaction for the transmission of such data, we believe such a requirement is premature. In making this recommendation, AHIMA acknowledges that it fully expects to support population health report data as part of eventual standards and criteria associated with either the EHR or the NHIN.

Permissible Donors

  • AHIMA understands that CMS is only attempting to identify those entities covered under the current self-referral regulation. However, given the authority provided by the Act, we recommend expanding the donors, as recommended above, in order to stimulate the adoption of eRx and EHR. We note that the assumption made on ancillary providers not being positioned to advance the goal of interoperable EHRs is not our experience. The benefits of adopting interoperable eHRs are not limited to improving the quality of care, but also to improving the efficiency of health care that translate into economic savings. Third party payers, such as CMS, will directly benefit from the economies resulting from the use of interoperable EHRs. A reduction in duplicative testing, more timely communication, and the sharing of information between providers will drive the economies. Everyone that has a stake in the potential for administrative efficiency and savings. Therefore, establishment of local and nation-wide health information networks suggests that donors should not be necessarily limited to their constituencies.

Selection of Recipients

  • AHIMA agrees that certified, interoperable systems will offer enhanced protection against some types of fraud and abuse. We understand that for this reason CMS is proposing to permit donors to use selective criteria for choosing recipients. We have agreed that CMS' criterion in a post-certification environment is reasonable and a donor should be able to demonstrate the rational behind a donation. AHIMA suggests, however, that just as we have noted a reason to expand permissible donors, there should also be capability for a donor to expand the potential list of recipients. Our rationale for this suggest merely is based on the potential for a donor to be willing to donate to unrelated recipients in a local information network, because economically it is capable of doing so and recognizes the benefits to the community. Since the entire community benefits from a fully functioning network, stakeholders in the network should be permitted to help each other.


The healthcare industry, the federal government, and most of all the patient/consumer/citizen will all benefit from the implementation and utilization of eRx, a standard EHR, and nation wide interoperability. The members of AHIMA applaud CMS and the Department's desire to provide changes to the self-referral regulations to promote the sharing of eRX, and EHR-related devices, software, training and other related resources. AHIMA understands the concerns that CMS has that such sharing could be abused, but suggests that the benefits of interoperability be balanced against this risk. In our comments above, AHIMA suggests ways to meet such a balance. The environment is changing rapidly and regulations must be designed to keep-up with and promote advancement not become a barrier.

AHIMA and its 50,000 member professionals are working hard to see the achievement of this nation's interoperable goals. We hope these recommendations will assist CMS in this effort and we stand ready to work with CMS and the Department in any way possible to achieve our common goal. If there are any questions regarding these comments and recommendations, or if there is any way that AHIMA might assist the Department, please contact me, at (202) 659-9440 or dan.rode@ahima.org. We thank you again for your efforts to achieve our common goal and for this opportunity to provide input to your proposed regulation.


Dan Rode, MBA, FHFMA
Vice President, Policy and Government Relations