Revised Hospital Donation Rules Have Limited Effect on EHRs

Health care industry watchers are skeptical that adoption of electronic health records will rapidly increase since federal rules in August 2006 were reworked to permit hospitals to help cover the cost of EHRs and other health IT applications for physicians. Prior to the changes, the Stark Act and federal anti-kickback rules were interpreted to bar hospitals from donating technology or making other gifts to doctors or independent physician practices. Vendors of EHR systems for ambulatory settings generally view the reworked rules less favorably than vendors of EHRs for acute care settings. Ambulatory EHR companies believe a provision in the reworked Stark rules that requires EHR systems to benefit hospitals will be a boost for larger competitors and make it difficult for smaller firms to stay in the market. On another note, accepting donated EHRs from hospitals has drawn resistance from physicians who are reluctant to link their medical and business operations to such an extent.