A 50-member multispecialty medical practice has decided to implement a new EHR system. The practice chooses the new EHR system based on both clinical functionality and the practice management and billing functionality that is demonstrated specifically because the EHR sales representative repeatedly states that the new EHR can reduce patient visit times (thus increasing the number of patients a provider can see in a day) and increase reimbursement to the practice by helping the practice “correctly code” to the highest E/M (evaluation and management) code available. While the healthcare providers and practice administrator are impressed with the new EHR, the new system will cost$2,000,000 for the EHR software and $250,000 for the associated hardware, plus yearly maintenance fees of $125,000. These costs exceed the practice’s budget. One day, while meeting with the vice president of a community hospital, the practice administrator mentions this issue and how the practice will have to delay purchasing an EHR due to the budget constraints. The VP states that the hospital will be happy to cover 85% costs for the new EHR system if the practice agrees to (1)consider their hospital first before sending a patient to any other potential competitors including not just ER or inpatient admission but outpatient diagnostic services and hospital-owned specialty practices, (2) include the hospital’ s logo on patient education materials printed from the system, (3)use the hospital’s template for designing data entry pages for practitioners, and (4) use the hospital’s template for the patient portal in the design of their patient portal.

Discussion Questions

1. Explain the basic requirements for a hospital to help finance the purchase of an EHR system by a provider.

2. Discuss whether the proposed course of action would be permissible under current fraud and abuse regulations.

3. If the structure of the proposed donation is not permitted under current fraud and abuse regulations, explain what steps the parties would need to take to make the transaction compliant.

4. Explain common issues related to use of EHR and healthcare fraud.

5. Discuss how the proposed new EHR could potentially facilitate healthcare fraud.