The current health care reform proposals being crafted in Washington have the potential to reshape the U.S. health care delivery system as we know it by expanding the scope of health insurance coverage and the ways the government pays for health care. But even if reform is enacted this year, that will only be the beginning of the story. An extraordinary number of actions will have to be taken by various regulatory bodies to interpret and implement the new law. Unfortunately, experience with how the existing health care regulatory scheme has been implemented raises concerns that the purposes of the new law could easily be undermined.

For example, under the “Stark” law, physicians are prohibited from having any financial relationship — direct or indirect, compensation or ownership — with an entity to which they refer patients, such as a hospital, if it does not fall within a regulatory exception. Experts agree that the development of integrated electronic health records (EHR) as a part of reform efforts should lead to dramatic savings throughout the health care system. However, the Stark law has been interpreted to bar joint integrated EHR arrangements in which physicians receive the necessary support from a hospital to implement a new and expensive integrated EHR system. In an effort to spur the implementation of EHR, the Centers for Medicare and Medicaid Services (CMS), which runs both programs, promulgated an exception to Stark for such arrangements. Yet the exception requires compliance with 13 factors — several with multiple subrequirements. In practice, the exception has proved too complicated and onerous to be helpful.

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