Washington AG rules against EHR donations from labs

Washington state's attorney general (AG) has ruled that a donation of money by a clinical lab to physicians to defray the cost of an EHR violates the state’s anti-rebate law when the donations are made to physicians who refer specimens to those labs.

The AG's opinion was issued at the request of state representative Eileen Cody, and acknowledges that while federal law allows such donations, this particular federal law doesn't preempt state law, which does not. To that end, state law still applies.

The AG's decision has been met with some skepticism. The law firm of Davis Wright Tremaine, which has two offices in Washington state, found fault with the opinion, noting in a Dec. 13 advisory that there are "problems" with the analysis and that it "seems to foreclose the possibility that the federal EHR incentive program is allowed under state law." The advisory also pointed out that the opinion seems to prohibit hospitals from assisting physicians in becoming meaningful users of EHRs.

A number of hospitals, health plans and labs began offering EHR subsidies to affiliated physicians after the government created the exception in the Stark law in 2006 to allow for them. The subsidies, also called donation programs, can be as high as 85 percent of the cost of a system's software, training and upgrades. The subsidy exception is slated to end Dec. 31, 2013, unless the U.S. Department of Health and Human Services extends the deadline.

"[T]he opinion casts a shadow on the federal government's multi-billion dollar program to foster the adoption and meaningful use of EHRs," according to the advisory.