The meaningful use (MU) regulations provide incentive monies for hospitals and physicians that establish electronic health records systems (EHRs) and satisfy other criteria, such as providing new forms of ‘patient engagement’ like technologically-enabled patient-provider communications. The advantages of a wireless record-sharing are enormous – quicker diagnoses, better quality tracking, and seamless payment systems.  But there are lots of steps and decisions required in setting up EHRs and developing broader data exchange systems like health information organizations/exchanges (HIOs or HIEs).  Last week, the Department of Health and Human Services’ Office of the National Coordinator denied certification for two small EHRs and promised ongoing rigorous enforcement of EHRs. Those engaged in developing of EHRs and HIEs must address a range of operational and legal issues, including picking and monitoring vendors; figuring out patient consent issues, particularly with respect to sensitive psychiatric, substance abuse and other data; determining governance issues; figuring out how to finance the HIE; and assessing other potential risks, such as if the HIE fails to link a  record to the right patient or the HIE is hacked or accessed by an unauthorized person.  Many are studying these challenges and seeking solutions.  The College of Healthcare Information Management Executives  recently sent a comment letter to ONC suggesting the development of a single set of standards for certification.  Based on the need, common approaches and product designs will emerge out of  solutions developed in the field today by hospitals, health systems, physicians, vendors and others--sooner rather than later.  

In a Private Letter Ruling (“PLR”), issued July 5, 2011, the Internal Revenue Service (“IRS”) reviewed an application for recognition of exemption from Federal income tax under IRC Section 501(c)(3) and denied tax-exempt standing to a hospital controlled organization formed with its medical staff members to participate in provider networks and contract with commercial payors to provide hospital and medical staff services.

More thoughts on physician employment by hospitals 

One of my clients, who was approached by a hospital for possible employment, proposed a trial period of 12 months.  During that 12 months, she would be employed by the hospital and at the end of 12 months either party could walk away for any reason with no strings attached.  No strings in this case meant no non compete and the hospital would pick up any tail insurance liability.