Some Cautious of Additions to IRS Health IT Ruling

Initial reactions to the long-awaited decision last week by the Internal Revenue Service to join HHS and the CMS in clearing a path for hospitals to subsidize healthcare information technology systems to affiliated physicians were overwhelmingly positive. But in the passing of a few days and with sober reflection, not everyone sees the new IRS policy as an unalloyed good thing.

Healthcare lawyer Andrew Blustein, a partner with Garfunkel, Wild & Travis, Great Neck, N.Y., while joining the early voices saying the IRS ruling is “wonderful news,” also urged caution. “It’s a major step forward, but people need to realize there are some additions (in the ruling) that may not fit their particular program.”

HHS and the CMS last summer issued safe harbors to the federal anti-kickback law and exceptions to Stark laws prohibiting inducements for referrals in separate documents totaling more than 70 pages. Hospitals can qualify for the HHS and CMS dispensations by providing under specific conditions subsidized electronic medical-records systems and support to physician practices.

{The IRS has just ruled that hospitals can “gift” doctors with electronic medical records systems and then data mine patient records “to the extent permitted by law.” This ruling overrides state laws, common law, Constitutional law, and medical ethics. It also nullifies the struggle in Congress about whether Stark and anti-kickback measures should be overridden to allow hospitals and insurers to “gift” doctors with electronic medical records systems. Since when does a federal agency like the IRS have the authority to override longstanding privacy protections in federal law, common law, state law, and medical ethics? This ruling even allows hospitals to data mine the records of patients who are NOT hospitalized or not enrollees of a particular health insurer, because HIPAA allows open access to electronic health records for “health operations” purposes by a “covered entity”. That purpose allows use of the data for any business reasons the hospital can conjure up. Some hospitals ALREADY sell patient data to help their bottom lines. This IRS ruling will “gift” hospitals with even more valuable patient data to sell—without the consent of those who control the data according to stronger state laws, common law, Constitutional law, and medical ethics that require consent before anyone can use medical records. ~ Dr. Deborah Peel, Patient Privacy Rights}

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