A hospital system proposal to license a custom software interface (“Physician Practice Interface”) to the physicians on its medical staffs for the sole purpose of ordering or communicating the results of laboratory tests and procedures would not result in an improper compensation arrangement, according to a recent CMS advisory opinion. The arrangement, therefore, would not run afoul of the prohibition against physician self-referral (Social Security Act §1877(h)(1)(A) (“Stark law”)).
Proposed arrangement. The hospital system contracted with a vendor to install a proprietary health care information system, including a software interface engine that facilitates access through the Physician Practice Interface. Currently, the hospital system's medical staffs can view patient laboratory reports over a protected internet connection to the information system.
Under the proposed arrangement, the hospital system would integrate its information system with the physicians' electronic health records (EHR) systems such that the Physician Practice Interface could be used by medical staff physicians to order or communicate the results of laboratory tests and procedures furnished by the hospital system.
Analysis. Under §1877(h)(1) of the Social Security Act, CMS explained, a “compensation arrangement” is defined as “any arrangement involving any remuneration between a physician…and an entity, other than an arrangement involving only…[t]he provision of items, devices, or supplies that are used solely…to order or communicate the results of tests or procedures for such entity.”
The hospital system certified that: (1) the interface would be used only to order or communicate the results of tests and procedures furnished by the hospital system; (2) it could not be applied to perform any alternative functions; and (3) the medical staff could not sell, transfer, or otherwise assign the license to use the interface. Accordingly, the proposed arrangement would not constitute a “compensation arrangement” under the Stark law, CMS concluded.
CMS Advisory Opinion, No. CMS-AO-2008-01, May 2008, Health Care Compliance Reporter ¶350,084.
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