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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Lincoln Medical and Mental Health Center (LMMHC) in New York suffered a major breach affecting 130,495 of its patients, according to a notice provided to HHS.  The breach occurred when the hospital's contractor, Siemens Medical Solutions USA, shipped seven password-protected, but not encrypted, CDs containing patient information via FedEx; and these CDs were subsequently lost in transit.  Via Bloomberg Business Week:

The CDs were sent by the hospital's billing processor, Siemens Medical Solutions USA, around March 16, but never arrived at their intended destination. They included sensitive health and personal information including Social Security numbers, addresses, dates of birth, health plan numbers, driver's license numbers and even descriptions of medical procedures, the hospital said on a note posted to its Web site.

<...> Siemens is no longer FedExing CDs to Lincoln, the hospital said. It is not aware of any of the data being improperly accessed.

LMMHC's breach should serve as a reminder for all healthcare providers currently negotiating health IT contracts to include proper protections in the event its vendor causes a breach or loss of protected data.  This is particularly crucial in the post-HITECH Act era.  

We always include specific compliance with privacy laws warranties, indemnification clauses and limitation of liability carve-outs for vendor's own negligent acts or omissions which result in a data breach or loss.  LMMHC's example clearly illustrates that providers must insist on such protections -- often, over strenuous objections from vendors -- because, otherwise, providers may be exposed to a wide range of expenses and damages from third-party claims, fines, investigations and breach notification associated with a data breach or loss resulting from vendor's actions.

For more information, please listen to or view the slides from our Webinar on negotiating "must-have" provisions in HIT contracts.

"New York hospital loses data on 130,000 via FedEx," Bloomberg Business Week (June 29, 2010).

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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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