Health IT Law Blog : Health IT Law Blog : Post & Schell: Law Firm : HIT & Electronic Health Records

Government Health IT published a column by Steve Fox and yours truly on the critical role Regional Extension Centers (RECs) can and should play in distributing best practices regarding contracting for health IT systems, including EHRs.  Via Government Health IT:

RECs have the potential to serve as a valuable resource, especially for remote and underserved paper-based primary practices. However, RECs could be doing a disservice to physicians by failing to advise or provide them with essential EMR contract negotiation skills.

With HITECH Act incentives expiring in just a few years, healthcare providers will likely get only one chance to qualify for the full amount of the incentive payments. Thus, successful implementation and operation of an EMR system by the selected health IT vendor becomes critical to each healthcare organization trying to achieve “meaningful use” and take advantage of the incentive program.

In this environment, strong and effective contracts between healthcare providers and health IT vendors is especially significant, because such agreements can provide adequate protections, safeguards and other rights for the provider-customer, in the event a vendor defaults or otherwise fails to perform to the provider’s satisfaction.

You can read the full column by clicking here.

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Our own Steve Fox was interviewed by InformationWeek regarding the essential protections healthcare providers should include in their EHR contracts with health IT  vendors.  In particular, Steve warned providers against simply accepting vendor agreements without carefully reviewing and negotiating the key provision therein. Via InformationWeek:

"Many health IT vendors offer online contacts that prompt the physician to click the 'agree' button. Unfortunately some of these agreements have no warranties and in fact disclaim many standard warranties, so the vendors are selling their products 'as is,' which means if something goes wrong they are not responsible," Fox told InformationWeek after his presentation. "Some contracts even go further and say if a third party, for example the patient, would sue as a result of a problem with the EHR, the physician has to indemnify and defend the vendor even if it was the vendor that caused the problem."

You can read more after the jump, or by clicking here.

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eWeek provides a great reminder of the dangers of signing up for an electronic health records system stored in a "cloud."  Such ASP/SaaS EHR models are attractive to many practices because they offer consistent (though not always lower) monthly fees and require no equipment purchases or installations.  However, as eWeek appropriately summarized, choosing an ASP provider should raise quite a few concerns, including:

• Access: who has access to your information (including your patients' protected health information)? How safe is it? Perhaps even more importantly, do you have access to your own information? Each ASP contract must deal with access issues, and clearly state that the provider will always have the right to access its own information stored on remotely hosted servers. Similarly, vendors should warrant that only the necessary personnel will access provider's records, and only in accordance with the scope of the agreement between the parties.
   
• Storage and disposal: Where is the data actually stored, and what regional or international laws may apply to such information? Also, what happens if the provider ceases to exist? eWeek reminds us that in 2001, "GE Healthcare bought health records provider Encounter EHR and eventually ended up shutting it down - giving records holders 30 days' notice to reclaim their data or lose it. This caused a great number of problems." While such instances are rare, what if the vendor storing your records is acquired by another company? Once again, your contracts should clearly deal with these issues, especially by providing that in the event the vendor is sold or goes out of business, provider has the right to terminate the agreement and the vendor must immediately return all of provider's data in its possession in the format specified by the provider.
   
• Cost: Does choosing ASP/SaaS model save money? According to eWeek, not necessarily: "Allscripts' MyWay service costs $700 per month per health care provider. GE Healthcare's new Centricity Advance service will cost doctors from $300 to $800 a month. Most client-server software packages are much less expensive."

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As if foreshadowing our upcoming webinar on negotiating EHR license agreements in the post-HITECH world, For the Record interviewed our own Steve Fox on this very subject in its February 15, 2010 cover story:

Steve Fox, senior partner and chair of the IT group at the law firm Post & Schell, says such strategies will be critical to an implementation’s ultimate success. For instance, he says vendors’ guarantees that their platform will meet meaningful use thresholds should be discounted.

“I’d be surprised if [satisfying] the final regulations will be achieved by a vendor doing anything,” he says. “Ultimately, it will be up to individual physicians’ offices or provider organization to achieve meaningful use, and in order to do it, they will need that vendor’s help. I have to laugh when I see those guarantees, ‘If you buy our product, you’ll achieve meaningful use,’ because nobody can make that claim. On the other hand, the failure of the vendor’s product can cause you to fail to achieve meaningful use. That’s why it is so important that you have tight provisions in the contract saying that whatever you want that vendor’s product to achieve, it will meet those particular objectives.

“Many vendors use the phrase ‘We don’t know what we don’t know’ as a way to say they can’t try to comply with future regulations, but our position is if you are in the HIT arena, you have to agree up front to comply with whatever they are,” he adds.

 

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Ingenix, the technology unit of United Health Group, and Allscripts-Misys Healthcare Solutions joined Siemens, GE Healthcare and IBM in offering financing for purchasers of electronic medical record technology.   This continues the trend of vendors offering interest-free financing until healthcare providers receive the "meaningful use"  incentive payments or reimbursements under the HITECH Act.

While such offers may provide a solution to some of the credit and financing woes facing the healthcare industry, healthcare providers should be acutely aware of the many potential pitfalls and related issues inherent in vendor-financed deals, including: (1) additional pressure from vendors to accept their standard contractual terms and conditions, rather than engaging in full-blown contract negotiations, because vendors have much more leverage if they are also the creditor in the transaction; (2) failing to obtain necessary warranties and representations from vendors that their systems will comply with all relevant requirements under ARRA and the HITECH Act and will permit the provider to achieve meaningful use; (3) dealing with problems that may arise if either the vendor’s product fails to achieve applicable certification (e.g., CCHIT), is not “accepted” by the provider after completion of acceptance testing or the product does not enable the provider to achieve “meaningful use” in a timely manner, as well as a host of other issues.

Steve Fox and yours truly explore the issues around vendor financing of EHR system purchases in the latest issue of the Journal of Health Information Management, where we suggest recommended courses of action for healthcare providers considering acquiring HIT systems, including EMRs, by using vendor financing options.  A complimentary PDF copy of the article is available here.
 

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