EMRs for sale: Do hospitals have a deal for you

Major health systems are beginning to offer physicians a link to the hospital's electronic medical records system -- for a price. Here's what to know before you take or reject an offer.

By Tyler Chin, AMNews staff. Oct. 10, 2005.

There's a new technology vendor trying to sell you an electronic medical record system. That vendor -- your local hospital. Recently, an increasing number of hospital systems have offered to hook up physician offices, for a fee, to the systems' brand-new electronic medical record system.

The hospitals hope to improve patient care and quality, as well as forge closer ties to physicians, by enabling them to have access to the same comprehensive, real-time patient record for the office and the hospital.

Although the Stark law provides some safe harbors, it generally bars hospitals from offering free or discounted goods and services to referring physicians. To comply with Stark and anti-kickback laws, hospitals must sell goods and services at fair market value to referring physicians.

The problem is that what constitutes fair market value is somewhat vague. Is it what comparable goods and services fetch in the open market? Or what it costs hospitals to connect you to their system?

"You have to recognize that there's a fairly broad range of what is fair market value," said Paul T. Smith, an attorney and co-chair of the health information technology workgroup at Davis Wright Tremaine LLP, San Francisco. "But one of the things people are talking about is how do you determine fair market value? Is the incremental cost of adding one more physician to the network fair market value, or do you have to load it up with some overhead or whatever? The jury is still out on that."