Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59015 

(2) Determining medical improvement 

and its relationship to your abilities to 

do work. 

* * * (In addition, see paragraph 

(b)(8) of this section if you work during 

your current period of eligibility based 

on disability or during certain other 

periods.) * * * 

* * * * * 

(5) Evaluation steps. * * * The steps 

are as follows. (See paragraph (b)(8) of 

this section if you work during your 

current period of eligibility based on 

disability or during certain other 

periods.) 

* * * * * 

(8) If you work during your current 

period of eligibility based on disability 

or during certain other periods. 

(i) We will not consider the work you 

are doing or have done during your 

current period of eligibility based on 

disability (or, when determining 

whether you are eligible for expedited 

reinstatement of benefits under section 

1631(p) of the Act, the work you are 

doing or have done during or after the 

previously terminated period of 

eligibility referred to in section 

1631(p)(1)(B) of the Act) to be past 

relevant work under paragraph (b)(5)(vi) 

of this section or past work experience 

under paragraph (b)(5)(vii) of this 

section. In addition, if you are currently 

entitled to disability benefits under title 

II of the Social Security Act, we may or 

may not consider the physical and 

mental activities that you perform in the 

work you are doing or have done during 

your current period of entitlement based 

on disability, as explained in paragraphs 

(b)(8)(ii) and (iii). 

(ii) If you are currently entitled to 

disability insurance benefits as a 

disabled worker, child’s insurance 

benefits based on disability, or widow’s 

or widower’s insurance benefits based 

on disability under title II of the Social 

Security Act, and at the time we are 

making a determination on your case 

you have received such benefits for at 

least 24 months, we will not consider 

the activities you perform in the work 

you are doing or have during your 

current period of entitlement based on 

disability if they support a finding that 

your disability has ended. (We will use 

the rules in § 416.990(i)(2) to determine 

whether the 24-month requirement is 

met.) However, we will consider the 

activities you do in that work if they 

support a finding that your disability 

continues or they do not conflict with 

a finding that your disability continues. 

We will not presume that you are still 

disabled if you stop working. 

(iii) If you are not a person described 

in paragraph (b)(8)(ii) of this section, we 

will consider the activities you perform 

in your work at any of the evaluation 

steps in paragraph (f) of this section at 

which we need to assess your ability to 

function. 

* * * * * 

Subpart N—Determinations, 

Administrative Review Process, and 

Reopening of Determinations and 

Decisions 

12. The authority citation for subpart 

N continues to read as follows: 

Authority: Secs. 702(a)(5), 1631, and 1633 

of the Social Security Act (42 U.S.C. 

902(a)(5), 1383, and 1383b). 

13. Section 416.1403 is amended by 

removing the word ‘‘and’’ at the end of 

paragraph (a)(20), replacing the period 

at the end of paragraph (a)(21) with ‘‘; 

and’’, and adding new paragraph (a)(22) 

to read as follows: 

§ 416.1403 Administrative actions that are 

not initial determinations. 

(a)* * * 

(22) Starting or discontinuing a 

continuing disability review. 

* * * * * 

[FR Doc. 05–20266 Filed 10–7–05; 8:45 am] 

BILLING CODE 4191–02–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of the Secretary 

Office of Inspector General 

42 CFR Part 1001 

RIN 0991–AB39 

Medicare and State Health Care 

Programs: Fraud and Abuse; Safe 

Harbor for Certain Electronic 

Prescribing Arrangements Under the 

Anti-Kickback Statute 

AGENCY: Office of Inspector General 

(OIG), HHS. 

ACTION: Proposed Rule. 

SUMMARY: As required by the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA), 

Public Law 108–173, this proposed rule 

would establish a new safe harbor under 

the Federal anti-kickback statute for 

certain arrangements involving the 

provision of electronic prescribing 

technology. Specifically, the safe harbor 

would protect certain arrangements 

involving hospitals, group practices, 

and prescription drug plan (PDP) 

sponsors and Medicare Advantage (MA) 

organizations that provide to specified 

recipients certain nonmonetary 

remuneration in the form of hardware, 

software, or information technology and 

training services necessary and used 

solely to receive and transmit electronic 

prescription drug information. In 

addition, using our separate legal 

authority under section 1128B(b)(3)(E) 

of the Social Security Act (the ‘‘Act’’), 

we are also proposing separate safe 

harbor protection for certain electronic 

health records software and directly 

related training services. These 

exceptions are consistent with the 

President’s goal of achieving 

widespread adoption of interoperable 

electronic health records for the purpose 

of improving the quality and efficiency 

of health care, while maintaining the 

levels of security and privacy that 

consumers expect. 

DATES: To assure consideration, public 

comments must be delivered to the 

address provided below by no later than 

5 p.m. on December 12, 2005. 

ADDRESSES: You may submit comments 

by any of the methods set forth below. 

In all cases, when commenting, please 

refer to file code OIG–405–P. 

• Mail—Office of Inspector General, 

Department of Health and Human 

Services, Attention: OIG–405–P, Room 

5246, Cohen Building, 330 

Independence Avenue, SW., 

Washington, DC 20201. 

Please allow sufficient time for us to 

receive mailed comments by the due 

date in the event of delivery delays. 

• Hand delivery/courier—Office of 

Inspector General, Department of Health 

and Human Services, Attention: OIG–

405–P, Room 5246, Cohen Building, 330 

Independence Avenue, SW., 

Washington, DC 20201. 

Because access to the Cohen Building 

is not readily available to persons 

without Federal Government 

identification, commenters are 

encouraged to leave their comments in 

OIG’s drop box located in the main 

lobby of the building. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Include agency 

name and identifier RIN 0991–AB36. 

Because of staff and resource 

limitations, we cannot accept comments 

by facsimile (FAX) transmission. For 

information on viewing public 

comments, see section V of the 

Supplementary Information section 

preamble. 

FOR FURTHER INFORMATION CONTACT: 

Catherine Martin, Office of Counsel to 

the Inspector General, (202) 619–0335. 

SUPPLEMENTARY INFORMATION: 

59016 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

1 56 FR 35952 (July 29, 1991); 61 FR 2122 

(January 25, 1996); 64 FR 63518 (November 19, 

1999); 64 FR 63504 (November 19, 1999); and 66 

FR 62979 (December 4, 2001). 

2See H.R. Conf. Rep. No. 108–391, 495 (2003). 

I. Background 

A. The Anti-Kickback Statute and Safe 

Harbors 

Section 1128B(b) of the Act (42 U.S.C. 

1320a–7b(b), the anti-kickback statute) 

provides criminal penalties for 

individuals or entities that knowingly 

and willfully offer, pay, solicit, or 

receive remuneration in order to induce 

or reward the referral of business 

reimbursable under any of the Federal 

health care programs, as defined in 

section 1128B(f) of the Act. The offense 

is classified as a felony and is 

punishable by fines of up to $25,000 

and imprisonment for up to five years. 

Violations of the anti-kickback statute 

may also result in the imposition of civil 

money penalties (CMPs) under section 

1128A(a)(7) of the Act (42 U.S.C. 1320a–

7a(a)(7)), program exclusion under 

section 1128(b)(7) of the Act (42 U.S.C. 

1320a–7(b)(7)), and liability under the 

False Claims Act, (31 U.S.C. 3729–33). 

The types of remuneration covered 

specifically include, without limitation, 

kickbacks, bribes, and rebates, whether 

made directly or indirectly, overtly or 

covertly, in cash or in kind. In addition, 

prohibited conduct includes not only 

the payment of remuneration intended 

to induce or reward referrals of patients, 

but also the payment of remuneration 

intended to induce or reward the 

purchasing, leasing, or ordering of, or 

arranging for or recommending the 

purchasing, leasing, or ordering of, any 

good, facility, service, or item 

reimbursable by any Federal health care 

program. 

Because of the broad reach of the 

statute, concern was expressed that 

some relatively innocuous commercial 

arrangements were covered by the 

statute and, therefore, potentially 

subject to criminal prosecution. In 

response, Congress enacted section 14 of 

the Medicare and Medicaid Patient and 

Program Protection Act of 1987, Public 

Law 100–93 (section 1128B(b)(3)(E) of 

the Act), which specifically required the 

development and promulgation of 

regulations, the so-called ‘‘safe harbor’’

provisions, that would specify various 

payment and business practices that 

would not be treated as criminal 

offenses under the anti-kickback statute, 

even though they may potentially be 

capable of inducing referrals of business 

under the Federal health care programs. 

Since July 29, 1991, we have published 

in the Federal Register a series of final 

regulations establishing ‘‘safe harbors’’

in various areas.1 These OIG safe harbor 

provisions have been developed ‘‘to 

limit the reach of the statute somewhat 

by permitting certain non-abusive 

arrangements, while encouraging 

beneficial or innocuous arrangements.’’

(56 FR 35952, 35958; July 21, 1991). 

Health care providers and others may 

voluntarily seek to comply with safe 

harbors so that they have the assurance 

that their business practices will not be 

subject to any enforcement action under 

the anti-kickback statute, the CMP 

provision for anti-kickback violations, 

or the program exclusion authority 

related to kickbacks. In giving the 

Department of Health and Human 

Services the authority to protect certain 

arrangements and payment practices 

under the anti-kickback statute, 

Congress intended the safe harbor 

regulations to be evolving rules that 

would be updated periodically to reflect 

changing business practices and 

technologies in the health care industry. 

B. Section 101 of MMA 

Section 101 of the MMA added a new 

section 1860D to the Act, establishing a 

Part D prescription drug benefit in the 

Medicare program. As part of the new 

statutory provision, Congress, through 

section 1860D–4(e) of the Act, directed 

the Secretary to create standards for 

electronic prescribing in connection 

with the new prescription drug benefit, 

with the objective of improving patient 

safety, quality of care, and efficiency in 

the delivery of care.2 Section 1860D–

4(e)(6) of the Act directs the Secretary, 

in consultation with the Attorney 

General, to create a safe harbor to the 

anti-kickback statute that would protect 

certain arrangements involving the 

provision of nonmonetary remuneration 

(consisting of items and services in the 

form of hardware, software, or 

information technology or training 

services) that is necessary and used 

solely to receive and transmit electronic 

prescription drug information in 

accordance with electronic prescribing 

standards promulgated by the Secretary 

under section 1860D–4(e)(4) of the Act. 

Specifically, the safe harbor would set 

forth conditions under which the 

provision of such remuneration by 

hospitals, group practices, and PDP 

sponsors and MA organizations 

(collectively, for purposes of this 

preamble discussion, ‘‘Donors’’) to 

prescribing health care professionals, 

pharmacies, and pharmacists 

(collectively, for purposes of this 

preamble discussion, ‘‘Recipients’’) 

would be protected. 

The OIG has a longstanding concern 

about the provision of free or reduced 

price goods or services to an existing or 

potential referral source. There is a 

substantial risk that free or reduced 

price goods or services may be used as 

a vehicle to disguise or confer an 

unlawful payment for referrals of 

Federal health care program business. 

Financial incentives offered, paid, 

solicited, or received in exchange for 

generating Federal health care business 

increase the risks of, among other 

problems: (i) Overutilization of health 

care items or services; (ii) increased 

Federal program costs; (iii) corruption of 

medical decision making; and (iv) unfair 

competition. Consistent with the 

structure and purpose of the antikickback statute and the regulatory 

authority at section 1128B(b)(3)(E) of the 

Act, we believe any safe harbor for 

electronic prescribing arrangements 

should protect innocuous or beneficial 

arrangements that would eliminate 

perceived barriers to the adoption of 

electronic prescribing without creating 

undue risk that the arrangement might 

be used to induce or reward the 

generation of Federal health care 

program business. 

We do not believe Congress, in 

enacting section 1860D–4(e)(6) of the 

Act, intended to suggest that a new safe 

harbor is needed for all or even most 

arrangements involving the provision of 

electronic prescribing items and 

services. In general, fair market value 

arrangements that are arm’s-length and 

do not take into account the volume or 

value of Federal health care program 

referrals, or arrangements that do not 

have as one purpose the generation of 

business payable by a Federal health 

care program, should not raise concerns 

under the anti-kickback statute. Simply 

put, absent the requisite intent, the antikickback statute is not violated. In 

addition, many arrangements can be 

structured to fit in existing safe harbors, 

including the safe harbors for discounts 

(42 CFR 1001.952(h)) and for 

remuneration offered to employees (42 

CFR 1001.952(i)). Finally, parties may 

use the OIG advisory opinion process 

(42 CFR part 1008; http://oig.hhs.gov/ 

fraud/advisoryopinions.html) to 

determine whether their particular 

arrangements would be subject to OIG 

sanctions. 

In addition to the new safe harbor 

under the anti-kickback statute, section 

1860D–4(e)(6) of the Act directs the 

Secretary to create a corresponding 

exception to section 1877 of the Act, 

commonly known as the physician selfreferral law. That exception is being 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59017 

promulgated through a separate 

rulemaking by the Centers for Medicare 

& Medicaid Services (CMS), the agency 

that administers the physician selfreferral law. We have endeavored to 

ensure as much consistency as possible 

between our proposed safe harbor and 

the corresponding exception proposed 

by CMS, given the differences in the 

respective underlying statutes. We 

intend the final rules to be similarly 

consistent. One significant difference in 

the statutory schemes is that fitting in 

an exception under section 1877 is 

mandatory, whereas complying with a 

safe harbor under the anti-kickback 

statute is voluntary. In other words, 

arrangements that do not comply with 

the electronic prescribing safe harbor 

will not necessarily be illegal under the 

anti-kickback statute. Rather, they will 

be subject to the customary case-by-case 

review under the statute. Another 

difference is that section 1877 applies 

only to referrals from physicians, while 

the anti-kickback statute applies more 

broadly. 

In certain respects, we are considering 

safe harbor standards that might impose 

stricter conditions than the 

corresponding exception to section 

1877. In part, this reflects the separate 

purposes of the anti-kickback statute 

and section 1877, as well as the serious 

nature of the felony violation described 

by the anti-kickback statute. In essence, 

section 1877 of the Act sets a minimum 

standard for acceptable financial 

arrangements; the anti-kickback statute 

addresses residual risk that may be 

posed by arrangements that otherwise 

comply with a physician self-referral 

exception. As explained in the Phase I 

final physician self-referral rule 

promulgated by CMS, ‘‘many 

relationships that may not merit blanket 

prohibition under section 1877 of the 

Act can, in some circumstances and 

given necessary intent, violate the antikickback statute.’’ (66 FR 856, 863; 

January 4, 2001). 

II. Provisions of the Proposed Rule 

This proposed rule would add a new 

paragraph (x) to the existing safe harbor 

regulations at 42 CFR 1001.952. This 

new paragraph (x) would describe more 

specifically the items and services 

protected by the new safe harbor for 

prescribing drugs electronically; the 

individuals and entities that may 

provide the protected items and 

services; and the conditions under 

which providing the items and services 

to prescribing health care professionals, 

pharmacies, and pharmacists would be 

protected. In addition, using our 

separate legal authority at 

§ 1128B(b)(3)(E) of the Act, as discussed 

below, we are proposing separate safe 

harbor protection for certain electronic 

health records software not covered by 

the MMA mandated safe harbor for 

electronic prescribing. These proposed 

safe harbors would, if promulgated, 

create separate and independent 

grounds for protection under the antikickback statute. For the convenience of 

the public, we are providing the 

following chart that lays out 

schematically the overall structure and 

approach of these proposals, details of 

which are provided below in Sections II. 

A and B. Readers are cautioned that the 

proposals contain additional conditions 

and information not summarized here. 

MMA-mandated electronic 

prescribing safe harbor 

Pre-interoperability electronic 

health records safe harbor 

Post-interoperability electronic 

health records safe harbor 

Authority for Proposed Exception .. Section 101 of the Medicare Prescription Drug, Improvement, 

and Modernization Act of 2003.

Section 1128B(b)(3)(E) of the Social Security Act.Section 1128B(b)(3)(E) of Social 

Security Act. 

Covered Technology ...................... Proposed: 

• Items and services that are 

necessary and used solely to 

transmit and receive electronic 

prescription drug information. 

• Includes hardware, software, 

internet connectivity, and training and support services. 

Proposed: 

Software used solely for the 

transmission, receipt or maintenance of electronic health 

records.

• Directly-related training services. 

• Software must include an electronic prescribing component. 

Proposed: 

• Certified health records software. 

• Directly-related training services. 

• Software must include an electronic prescribing component. 

• Could include billing and scheduling software, provided that the 

core function of the software is 

electronic health records. 

Standards with Which Donated 

Technology Must Comply.

Proposed: 

• Foundation standards for electronic prescribing as adopted by 

the Secretary. 

Proposed: 

• Electronic prescribing component must comply with foundation standards for electronic 

prescribing as adopted by the 

Secretary. 

Proposed: 

• Product certification criteria 

adopted by the Secretary Electronic prescribing component 

must comply with foundation 

standards for electronic prescribing as adopted by the Secretary, to the extent these 

standards are not fully incorporated into the product certification criteria. 

Permissible Donors ........................ Proposed: 

• As required by statute, permissible donors are hospitals (to 

members of their medical 

staffs), group practices (to physician members), PDP sponsors and MA organizations (to 

network pharmacists and pharmacies, and to prescribing 

health care professionals). 

Proposed: 

• Hospitals to members of their 

medical staffs. 

• Group practices to physician 

members. 

• PDP sponsors. 

• MA organization. 

Proposed: 

• Hospitals to members of their 

medical staffs. 

• Group practices to physician 

members. 

• PDP sponsors. 

• MA organization. 

59018 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

3See, e.g., 56 FR 35952, 35978 (July 29, 1991) 

noting that a computer that has independent value 

to a physician may constitute an illegal 

inducement. 

MMA-mandated electronic 

prescribing safe harbor 

Pre-interoperability electronic 

health records safe harbor 

Post-interoperability electronic 

health records safe harbor 

Selection of Recipients .................. Proposed: 

• Donors may not take into account the volume or value of referrals from the recipient or 

other business between the 

parties. 

Proposed: 

• Donors may not take into account the volume or value of referrals from the recipient or 

other business between the 

parties. 

Proposed: 

• Donors may use criteria to select recipients that are not directly related to the volume or 

value of referrals or other business generated between the 

parties. 

Value of Protected Technology ..... Proposed: 

• No specific dollar amount proposed for a cap on the value of 

protected technology. 

Proposed: 

• No specific dollar amount proposed for a cap on the value of 

protected items and services. 

Proposed: 

• No specific dollar amount proposed for a cap on the value of 

protected items and services. 

• May be greater than the cap on 

pre-interoperability donations. 

A. Electronic Prescribing Safe Harbor 

Required Under Section 101 of the 

MMA: Paragraph (x) 

1. Protected Nonmonetary 

Remuneration 

Section 1860D–4(e)(6) of the Act 

authorizes the creation of a safe harbor 

for the provision of items and services 

that are ‘‘necessary and used solely’’ to 

receive and transmit electronic 

prescription drug information. This 

proposed rule would clarify the items 

and services that would qualify for the 

new safe harbor (for purposes of this 

preamble discussion, ‘‘qualifying 

electronic prescribing technology’’). 

‘‘Necessary’’ nonmonetary 

remuneration—First, consistent with the 

MMA mandate, the proposed safe 

harbor would protect items or services 

that are ‘‘necessary’’ to conduct 

electronic prescription drug 

transactions. This might include, for 

example, hardware, software, broadband 

or wireless Internet connectivity, 

training, information technology 

support services, and other items and 

services used in connection with the 

transmission or receipt of electronic 

prescribing information. However, the 

safe harbor would not protect 

arrangements in which a Donor 

provides items or services that are 

technically or functionally equivalent to 

items and services the Recipient 

currently possesses or has obtained. 

Thus, for example, under the proposed 

regulations, a Donor can provide a 

hand-held device capable of 

transmitting electronic prescribing 

information to the Recipient, even if the 

Recipient already has a desktop 

computer that could be used to transmit 

or receive the same information, 

because the mobility allowed by the 

hand-held device offers a material 

advantage over the desktop computer 

for Recipients who would use the 

device portably. By contrast, the 

provision of a second hand-held device 

would not qualify for safe harbor 

protection if the Recipient already has a 

hand-held device sufficient to run the 

requisite electronic prescribing 

software. We do not interpret the term 

‘‘necessary’’ to preclude upgrades of 

equipment or software that significantly 

enhance the functionality of the item or 

service. 

We believe restricting the exception to 

‘‘necessary’’ items and services is 

important to minimize the potential for 

abuse. However, we recognize that 

Donors will not necessarily know which 

items and services the Recipient already 

possesses or has obtained. Accordingly, 

proposed § 1001.952(x)(7)(iv) would 

require the Recipient to certify that the 

items and services to be provided are 

not technically or functionally 

equivalent to items or services the 

Recipient already possesses or has 

obtained. The certification would need 

to be updated prior to the provision of 

any necessary upgrades or items and 

services not reflected in the original 

certifications. We are concerned that the 

certification process would be 

ineffective as a safeguard against fraud 

and abuse if it is a mere formality or if 

Recipients simply execute a form 

certification provided by a Donor. 

Therefore, we are proposing at 

§ 1001.952(x)(8) that the Donor must not 

have actual knowledge of, and not act in 

reckless disregard or deliberate 

ignorance of, the fact that the Recipient 

possesses or has obtained items and 

services that are technically or 

functionally equivalent to those donated 

by the Donor. The Recipient would be 

protected only if the certification is 

truthful. We are soliciting comments 

about other ways to address this 

concern. 

We are also concerned that there may 

be a risk that Recipients would 

intentionally divest themselves of 

functionally or technically equivalent 

technology that they already possess to 

shift costs to Donors. We are soliciting 

public comments on how best to 

address this issue. 

‘‘Used solely’’—In addition to the 

‘‘necessary’’ standard, section 1860D–

4(e)(6) of the Act provides that the items 

and services must be ‘‘used solely’’ for 

the transmission or receipt of electronic 

prescribing information. We believe 

Congress included this requirement to 

safeguard against abusive arrangements 

in which the remunerative technology 

might constitute a payment for referrals 

because it might have additional value 

attributable to uses other than electronic 

prescribing. For example, a computer 

that a physician can use to conduct 

office or personal business might have 

value to the physician apart from its 

electronic prescribing purpose; if this 

value is transferred to the physician in 

connection with referrals, the statute 

would be implicated.3 Accordingly, the 

proposed safe harbor requires that the 

protected items and services be used 

solely to transmit or receive electronic 

prescribing information. 

We are concerned that Donors might 

provide software for free or reduced cost 

that bundles valuable general office 

management, billing, scheduling, or 

other software with the electronic 

prescribing features. Such additional 

remuneration would not meet the ‘‘used 

solely’’ requirement and would not be 

protected by the proposed electronic 

prescribing safe harbor; such 

arrangements potentially raise 

significant concerns under the antikickback statute, if any purpose of the 

provision of the bundled software is to 

induce or reward the generation of 

Federal health care program business. 

However, the Recipient would not be 

precluded from purchasing for fair 

market value additional technology not 

protected by the proposed safe harbor. 

We are mindful that hardware and 

connectivity services can be used for the 

receipt and transmission of a wide range 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59019 

of information services, including, but 

not limited to, electronic prescription 

information, and that many people may 

prefer to use a single, multi-functional 

device, especially a hand-held, rather 

than multiple single-use devices. 

Similarly, many people may prefer to 

use a single connectivity service. 

Accordingly, we are proposing using 

our regulatory authority under section 

1128B(b)(3)(E) of the Act to create an 

additional safe harbor to protect the 

provision by Donors to Recipients of 

some limited hardware (including 

necessary operating system software) 

and connectivity services that are used 

for more than one function, so long as 

a substantial use of the item or service 

is to receive or transmit electronic 

prescription information. We propose to 

treat operating software as integral to 

the hardware and distinct from other 

software applications that are not 

necessary for the hardware to operate. 

Protection under this additional, 

separate safe harbor would not extend to 

the provision of items or services that 

are only occasionally used for electronic 

prescribing. The additional safe harbor 

would incorporate the definitions and 

conditions set forth in this proposed 

rulemaking for the MMA-mandated safe 

harbor and would also include 

conditions to address the additional risk 

of abuse posed by multi-functional 

items and services. We are soliciting 

public comment about the standards 

that should appear in an additional safe 

harbor for multi-functional hardware 

(including necessary operating system 

software) or connectivity services. In 

particular, we are soliciting public 

comment on methodologies for 

quantifying or ensuring that a 

substantial use of hardware and 

connectivity services is for the receipt or 

transmission of electronic prescribing 

information. We are also soliciting 

public comment on the nature and 

amount of any cap that we might 

impose on the value of the donated 

multi-functional hardware or 

connectivity services. 

2. Donors and Recipients Protected by 

the Proposed Safe Harbor 

Section 1860D–4(e)(6) of the Act 

describes the parties that may be 

protected under the new safe harbor. 

Specifically, protection is afforded to: 

(1) Hospitals with respect to members of 

their medical staffs; (2) group practices 

with respect to prescribing health care 

professionals who are members of the 

group practice; and (3) PDP sponsors 

and MA organizations with respect to 

participating pharmacists and 

pharmacies, as well as prescribing 

health care professionals. We address 

each category below. 

Hospitals/Medical Staff—Proposed 

§ 1001.952(x)(1)(i) would protect 

donations of qualifying electronic 

prescribing technology provided by a 

hospital to physicians on its medical 

staff. We do not intend to interpret this 

provision as extending to physicians 

who do not routinely furnish services at 

the hospital. We do not intend for this 

exception to protect remuneration that 

is used to induce physicians who 

already use other hospitals to join the 

medical staff of a different hospital. We 

are soliciting public comment on 

whether we should include items or 

services provided to other individuals 

or entities (e.g., other health care 

prescribing professionals who treat 

patients at the hospital). 

Group Practices/Members—Proposed 

§ 1001.952(x)(1)(ii) would protect 

donations of qualifying electronic 

prescribing technology provided by a 

group practice to its members who are 

prescribing health care professionals. 

For consistency with the regulations 

promulgated in accordance with section 

1877 of the Act, we propose to interpret 

the terms ‘‘group practice’’ and 

‘‘members’’ of a group practice 

consistent with existing definitions in 

section 1877(h)(4) of the Act and the 

regulations at 42 CFR 411.352 and 42 

CFR 411.351, respectively. Those 

provisions make clear that a ‘‘group 

practice’’ must be a single legal entity 

with unified business operations and 

may not be an informal affiliation of 

physicians and that a ‘‘member’’ of a 

group practice refers to a physicianowner or physician-employee of the 

group practice. A ‘‘member’’ of the 

group practice, under § 411.351 does not 

include independent contractors of the 

group or persons who are not 

physicians. 

Because section 1877 of the Act deals 

only with physician referrals, 

application of its definition of a 

‘‘member’’ of a group practice is not 

sufficient to define the full range of 

‘‘prescribing health care professionals’’

included in section 1860D–4(e)(6) of the 

Act, and it is necessary for us to 

augment the definition in this proposed 

rule. Accordingly, for purposes of the 

proposed safe harbor, ‘‘prescribing 

health care professionals who are 

members of the group’’ would include 

prescribing professionals (e.g., nurse 

practitioners) who are owners or 

employees of the group and who are 

authorized to prescribe under applicable 

State licensing laws. 

Because the definition of ‘‘member’’

of the group practice under § 411.351 

excludes independent contractors, we 

are soliciting comments regarding 

whether and how a group practice may 

appropriately furnish qualifying 

electronic prescribing technology to 

physicians or other prescribing health 

care professionals who contract with the 

group to furnish services to the group’s 

patients. 

We do not believe that the inclusion 

by Congress of group practices and their 

members in section 1860D–4(e)(6) of the 

Act was intended to imply that the 

provision of qualifying electronic 

prescribing technology by a group 

practice to its members necessarily 

required a new safe harbor under the 

anti-kickback statute. In many 

circumstances, the provision of 

equipment or other resources by a 

medical group to its member health care 

professionals for use in furnishing 

services to the group’s patients would 

not raise fraud and abuse concerns 

under the anti-kickback statute. 

Moreover, for those situations where the 

statute may be implicated, many 

arrangements can be structured to fit in 

an existing safe harbor, including, for 

example, the safe harbors for personal 

services and management contracts or 

employee compensation at 

§ 1001.952(d) and (i), respectively. 

Arrangements that do not fit in a safe 

harbor are not necessarily illegal under 

the anti-kickback statute. We believe 

Congress included these relationships in 

section 1860D–4(e)(6) of the Act simply 

to encourage group practices to adopt 

electronic prescription technology. 

PDP Sponsors and MA Organizations/ 

Pharmacies, Pharmacists, and 

Prescribing Health Care Professionals—

Consistent with section 1860D–4(e)(6) of 

the Act, proposed § 1001.952(x)(1)(iii) 

would protect donations of qualifying 

electronic prescribing technology 

provided by a PDP sponsor or MA 

organization to prescribing health care 

professionals, participating pharmacies, 

and participating pharmacists. We 

propose to interpret the term ‘‘PDP 

sponsor’’ and ‘‘MA organization’’

consistent with the Medicare 

Prescription Drug Benefit regulations at 

42 CFR 423.4 and 42 CFR 422.2, 

respectively. We propose to interpret 

the terms ‘‘pharmacy’’ and 

‘‘pharmacist’’ consistent with applicable 

State licensing laws. We propose to 

interpret ‘‘prescribing health care 

professionals’’ as physicians or other 

health care professionals (e.g. nurse 

practitioners) licensed to prescribe 

drugs in the State in which the drugs are 

dispensed. 

Finally, we are soliciting comments 

on whether there is a need to protect 

other categories of Donors or Recipients, 

beyond those specifically set forth in 

59020 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

section 1860D–4(e)(6) of the Act, and if 

so, how best to address safe harbor 

protection for those individuals or 

entities. In particular, we are interested 

in comments addressing the types of 

individuals and entities that should be 

protected, the degree of need for 

protection, and the safeguards that 

should be imposed to protect against 

fraud and abuse. In general, we believe 

that only individuals and entities 

involved in the ordering, processing, 

filling, or reimbursing of prescriptions 

are likely to have sufficient need to 

justify inclusion in an electronic 

prescribing safe harbor. 

3. Additional Conditions on the 

Provision of Qualifying Electronic 

Prescribing Technology 

Promoting Compatibility and 

Interoperability—Section 1860D–4(e)(6) 

of the Act is integral to the electronic 

prescribing drug program established by 

section 101 of MMA. Section 1860D–

4(e)(6) of the Act provides that, in order 

to qualify for the safe harbor, qualifying 

electronic prescription technology must 

be used to receive and transmit 

electronic prescription information in 

accordance with standards to be 

established by the Secretary for the Part 

D electronic prescription drug program. 

Consistent with section 1860(D)–4(e)(6) 

of the Act, proposed § 1001.952(x)(2) 

would require that the items and 

services be provided as part of, or be 

used to access, an electronic 

prescription drug program that complies 

with the standards established by the 

Secretary for these programs. We are 

soliciting comments on whether the safe 

harbor should protect qualifying 

electronic prescription technology that 

is used for the transmission of 

prescription information regarding 

items and services that are not drugs 

(e.g., supplies or laboratory tests). 

We believe that interoperability can 

serve as an important safeguard against 

fraud and abuse and mitigate the risk 

that a Donor’s offer of free or reduced 

price technology to a Recipient could be 

a means of maintaining or increasing 

referrals from the Recipient. With 

interoperable electronic prescribing 

technology, the Recipient would be free 

to transmit prescriptions to any 

appropriate pharmacy. At this time, 

there are no regulatory standards to 

ensure that electronic prescription 

information products are interoperable 

with other products. However, we note 

that interoperability may be required in 

the future under final regulations 

regarding the standards for the Part D 

prescription drug program. 

To the extent that either the hardware 

or software can be interoperable, the 

proposed regulation at § 1001.952(x)(3) 

would prohibit Donors or their agents 

from taking any actions to disable or 

limit that interoperability or otherwise 

impose barriers to compatibility. We 

believe this condition is necessary to 

limit the ability of Donors to use the 

provision of electronic prescribing 

technology to tie Recipients to the 

Donor. We are considering defining the 

term ‘‘interoperable’’ in this context to 

mean the ability of different operating 

and software systems, applications, and 

networks to communicate and exchange 

data in an accurate, secure, effective, 

useful, and consistent manner. See 

generally 44 U.S.C. 3601(6) (pertaining 

to the management and promotion of 

electronic government services). We are 

soliciting public comment about this 

approach, our definition of the term 

‘‘interoperable,’’ alternative means of 

ensuring the maximum level of 

interoperability, and the types of 

software currently available for 

electronic prescribing. 

Value of protected technology—To 

further safeguard against fraud and 

abuse, we believe it would be 

appropriate to limit the aggregate value 

of the qualifying electronic prescribing 

technology that a Donor could provide 

to a Recipient under the safe harbor. We 

are considering whether to limit the 

aggregate fair market value of all items 

and services provided to a Recipient 

from a single Donor. We believe a 

monetary limit is appropriate and 

reasonable to minimize the potential for 

fraud and abuse. We are soliciting 

public comment on the amount of a cap 

that would adequately protect the 

program against abuse, the methodology 

used to determine the cap (for example, 

fixed dollar amount, percentage of the 

value of the donated technology, or 

another methodology), whether the 

same cap would be adequate if there 

were protection for the donation of 

multi-functional hardware and 

connectivity services, whether the cap 

should be reduced over time, and 

whether the cap places a disadvantage 

on smaller entities that do not have the 

financial resources of larger chains or 

organizations. 

In addition, we are interested in 

public comments that address the retail 

and nonretail costs (i.e., the costs of 

purchasing from manufacturers, 

distributors, or other nonretail sources) 

of obtaining electronic prescribing 

technology and the degree to which 

potential Recipients may already 

possess items or services that could be 

used for electronic prescribing. We note 

that CMS has received varying estimates 

of the costs of implementing electronic 

prescribing through the comment 

process for the CMS E-Prescribing and 

the Prescription Drug Program proposed 

rule published on February 4, 2005 in 

the Federal Register (70 FR 6256). We 

caution that the cost of implementing an 

electronic prescribing program will not 

correlate necessarily to the amount of 

any cap if one is established. Moreover, 

we do not expect that donors will wish 

necessarily to donate the total amount 

that the technology costs or, depending 

on the size of a cap, the total amount 

ultimately protected in the final rule. 

While we are interested in obtaining 

detailed information about the costs of 

the full range of technology so as to be 

fully informed on this matter, we do not 

expect that the final regulations will 

protect all possible costs. 

We are considering various potential 

caps that would be no higher than any 

cap that may ultimately be imposed in 

the corresponding electronic prescribing 

exception under Section 1877 of the Act 

to be promulgated by CMS. We are 

considering measuring the monetary 

limit at fair market value to the 

Recipient (i.e., the retail value). We 

believe this approach is consistent with 

the anti-kickback statute’s intent 

requirement and would also minimize 

any competitive disadvantage for 

smaller entities that do not have the 

financial resources or potential volume 

of technology business of larger chains 

or organizations. 

We are considering setting an initial 

cap, which would be lowered after a 

certain period of time sufficient to 

promote the initial adoption of the 

technology. This would have the effect 

of encouraging investments in the 

desired technology while also ensuring 

that, once the technology has been 

widely adopted and its costs have come 

down, the safe harbor cannot be abused 

to disguise payments for referrals. We 

are soliciting public comment about this 

approach. Finally, we are soliciting 

comments on whether and, if so, how to 

take into account Recipient access to 

any software that is publicly available 

either free or at a reduced price. 

Other Conditions—Proposed 

§§ 1001.952(x)(5), (x)(6), and (x)(7) 

would incorporate additional 

conditions. Paragraph § 1001.952(x)(5) 

would provide that the Recipients 

(including their groups, employees, or 

staff) may not make the donation of 

qualifying electronic prescribing 

technology from Donors a condition of 

doing business with the Donor. 

Paragraph (x)(6) would provide that 

neither the eligibility of a Recipient to 

receive items and services from a 

protected Donor, nor the amount or 

nature of the items or services received, 

may be determined in a manner that 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59021 

takes into account the volume or value 

of the Recipient’s referrals or other 

business generated between the parties. 

This would not preclude selection 

criteria that are based upon the total 

number of prescriptions written by a 

Recipient, but would preclude criteria 

based upon the number or value of 

prescriptions written by the Recipient 

that are dispensed or paid by the Donor, 

as well as any criteria based on any 

other business generated between the 

parties. We are interested in comments 

with respect to other potential criteria 

for selecting medical staff recipients of 

donated technology. Also, the safe 

harbor would not protect arrangements 

that seek to induce a Recipient to 

change loyalties from other providers or 

plans to the Donor (e.g., a hospital using 

an electronic prescribing technology 

arrangement to induce a physician who 

is on the medical staff of another 

hospital to join the Donor hospital’s 

medical staff for a purpose of referring 

patients to the Donor hospital). 

Proposed § 1001.952(x)(7) would 

require the arrangement to be in writing, 

to be signed by the parties, to identify 

with specificity the items or services 

being provided and their values, and to 

include the certification described in 

section II.A.1 above. To permit effective 

oversight of protected arrangements, the 

writing must cover all qualifying 

electronic prescribing technology 

provided by the Donor (or affiliated 

parties) to the Recipient. For example, if 

a Donor provides a piece of hardware 

under one arrangement and 

subsequently provides a software 

program, the agreement regarding the 

software would have to include a 

description of the previously donated 

hardware (including its nature and 

value). 

Finally, we seek to minimize the 

potential for abuse and to ensure that 

the protected technology furthers the 

congressional purpose of promoting 

electronic prescribing as a means of 

improving the quality of care for all 

patients. We believe that any protected 

items and services must, to the extent 

possible, be usable by recipients for 

electronic prescribing for all patients to 

ensure that uninsured and nonMedicare patients receive the same 

benefits that the technology may 

engender, including reduction of errors 

and improvements in care. Some 

donated technology (such as software 

for tracking prescriptions or formularies 

of a particular MA organization’s 

patients) may not be applicable to all 

patients. However, other technology (for 

example, hand-held devices and 

software that transmits prescriptions to 

pharmacies) is potentially usable for all 

patients, and recipients should not be 

restricted from using such technology 

for all patients. Accordingly, proposed 

§ 1001.952(x)(4) would require that, 

where possible, recipients must be able 

to use the protected technology for all 

patients without regard to payor status. 

B. Proposed Electronic Health Records 

Safe Harbors 

Many in the hospital industry, among 

others, have raised the issue of the need 

for safe harbor protection for 

arrangements involving technology 

other than electronic prescribing. In 

many cases, such arrangements may 

qualify for safe harbor protection under 

existing safe harbors, such as the 

employee safe harbor (42 CFR 

1001.952(i)), the discounts safe harbor 

(42 CFR 1001.952(h)), or the equipment 

rental safe harbor (42 CFR 1001.952(c)). 

Moreover, as explained above, 

arrangements that do not qualify for safe 

harbor protection are not necessarily 

illegal. 

In general, the provision of valuable 

technology to physicians or other 

sources of Federal health care program 

referrals poses a heightened risk of fraud 

or abuse. This risk increases as the value 

of the technology to the Recipient 

increases. In the preceding discussion of 

the proposed safe harbor for electronic 

prescribing technology, we noted a 

number of fraud and abuse risk areas; 

those risk areas would also apply to the 

provision of free or reduced price 

electronic health records technology. In 

many respects, the provision of 

electronic health records technology to 

physicians and others poses greater risk 

of fraud or abuse than the provision of 

electronic prescribing technology; 

electronic health records technology is 

inherently more valuable to physicians 

in terms of actual cost, avoided 

overhead, and administrative expenses 

of an office practice. 

Notwithstanding, we believe it may be 

possible to craft safe harbor conditions 

that would promote open, 

interconnected, interoperable electronic 

health records systems that help 

improve the quality of patient care and 

efficiency in the delivery of health care 

to patients, without protecting 

arrangements that serve as marketing 

platforms or mechanisms to influence 

inappropriately clinical decision 

making or tie physicians to particular 

providers or suppliers. The potential 

patient care and system efficiency 

benefits of interoperable and certified 

electronic health records technology are 

discussed in detail in the preamble to 

CMS’ contemporaneous notice of 

proposed rulemaking for an exception 

under section 1877 and are not repeated 

here. Full interoperability of electronic 

health records technology would help 

reduce, but not eliminate, some risks of 

program and patient fraud and abuse 

(such as improper patient steering) by 

ensuring that donors would not be able 

to lock recipients into using the donor’s 

systems. 

Currently, uniform interoperability 

standards for electronic health records 

and certification requirements necessary 

to ensure interoperability do not exist. 

Accordingly, we are considering an 

incremental approach to safe harbor 

protection in this area. Specifically, we 

are proposing using our legal authority 

at section 1128B(b)(3)(E) of the Act to 

promulgate two safe harbors related to 

electronic health records software and 

directly related training services that are 

necessary and used to receive, transmit, 

and maintain electronic health records 

of the entity’s or physician’s patients. 

The first safe harbor would apply to 

donations made before adoption by the 

Secretary of product certification 

criteria, including criteria for 

interoperability, functionality, and 

privacy and security of electronic health 

records technology. These conditions 

are also referred to herein as ‘‘product 

certification criteria.’’ (For purposes of 

this rulemaking, this safe harbor will be 

referred to as the ‘‘pre-interoperability’’

safe harbor.) Once standards are 

identified and product certification 

criteria are developed for electronic 

health records and adopted by the 

Secretary, we believe some enhanced 

flexibility in the conditions applicable 

under a safe harbor for electronic health 

records may be appropriate, provided 

the safe harbor conditions as a whole 

sufficiently guard against fraud and 

abuse. A second safe harbor would 

apply to donations made after product 

certification criteria have been adopted. 

(For purposes of this rulemaking, this 

second safe harbor will be referred to as 

the ‘‘post-interoperability’’ safe harbor.) 

The post-interoperability safe harbor 

would recognize the reduction in the 

risk of fraud and abuse that may result 

from the ability to ensure that free or 

reduced price products provided under 

the safe harbor are interoperable and 

certified. 

Unlike electronic prescribing, 

Congress provided no direction with 

respect to any safe harbor for electronic 

health records. As discussed more fully 

below, any safe harbor of electronic 

health records technology will 

necessarily involve consideration of a 

number of important variables. Given 

this, as well as the inherent risk of fraud 

and abuse typically posed by gifts of 

free items and services to potential 

referral sources, we believe we do not 

59022 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

have sufficient information at this time 

to draft appropriate safe harbor 

language. However, we are soliciting 

public comments on the proposed scope 

and conditions for electronic health 

records safe harbors, as outlined below. 

1. Proposed Pre-Interoperability Safe 

Harbor 

We are considering incorporating the 

following features in the preinteroperability safe harbor. 

Covered Technology—The preinteroperability safe harbor would 

protect electronic health records 

software (that is, software that is 

essential to and used solely for the 

transmission, receipt, and maintenance 

of patients’ electronic health records 

and electronic prescription drug 

information) and directly-related 

training services, provided that the 

software includes an electronic 

prescribing component. The required 

electronic prescribing component must 

consist of software that is used to 

receive and transmit electronically 

prescription drug information in 

accordance with standards established 

by the Secretary under the Part D 

electronic prescription drug program. 

We are soliciting comments on whether 

the exception should permit the 

electronic prescribing component of 

electronic health records software to be 

used for the transmission of prescription 

information regarding items and 

services that are not drugs (for example, 

supplies or laboratory tests). 

Additionally, we are soliciting 

comments with respect to whether we 

should require that electronic health 

records software include a 

computerized provider order entry 

(‘‘CPOE’’) component. The preinteroperability safe harbor would not 

protect the provision of other types of 

technology, including, but not limited 

to, hardware, connectivity services, 

billing, scheduling, or other similar 

general office management or 

administrative software services, or 

software that might be used by a 

Recipient to conduct personal business 

or business unrelated to the Recipient’s 

medical practice. While we would 

protect necessary training services in 

connection with the software, we would 

not protect the provision of staff to 

Recipients or their offices. We are 

mindful that there may be particular 

constituencies, such as rural area 

providers, that lack sufficient hardware 

or connectivity services to implement 

effective electronic health records 

systems. We are soliciting comments 

addressing these special circumstances. 

Any safe harbor would need to define 

‘‘electronic health records.’’ As with 

electronic prescribing technology, we 

are interested in public comments that 

address the software functions that 

should be included in the definition of 

‘‘electronic health records’’; the types of 

software that should be protected; the 

retail and nonretail cost of such 

software; the manner in which such 

software is currently marketed; methods 

for defining the scope of protected 

software; and safeguards that might be 

imposed (either by definition or 

separately) to ensure that provision of 

the software cannot be used to 

camouflage unlawful payments for 

referrals or to tie impermissibly 

Recipients to Donors in a position to 

benefit from the Recipient’s referrals. 

The pre-interoperability safe harbor 

would require that the protected 

software and training services be 

‘‘necessary’’ consistent with our 

interpretation of the term in section 

II.A.1, and we are considering including 

comparable documentation provisions, 

including comparable certifications by 

Recipients, to ensure that the safe 

harbor does not protect the provision of 

items or services that are technically or 

functionally equivalent to items and 

services the Recipient currently 

possesses or has obtained. As with 

electronic prescribing technology, we 

are concerned that there may be a risk 

that Recipients would intentionally 

divest themselves of functionally or 

technically equivalent technology that 

they already possess to shift costs to 

Donors, and we are soliciting public 

comments on whether and how to 

address this situation. 

Interoperability—In addition to 

requiring that the electronic prescribing 

component of the protected software 

comply with standards established by 

the Secretary for the Part D electronic 

prescription drug program, it would be 

important that neither Donors nor their 

agents take any actions to disable or 

limit interoperability of any component 

of the software or otherwise impose 

barriers to compatibility. We are also 

considering requiring that protected 

software comply with relevant Public 

Health Information Network 

preparedness standards, such as those 

related to BioSense. We are soliciting 

comments on these and other 

appropriate qualifications. In addition, 

electronic health records lack the 

program and beneficiary protections 

that exist under the Part D prescription 

drug program and related electronic 

prescription standards. We are 

considering including in the final safe 

harbor conditions designed to replicate 

these protections for electronic health 

records, including quality assurance 

measures. We are soliciting public 

comments on the most appropriate way 

to do so. 

Value of the Protected Technology—

As with electronic prescribing, we are 

proposing limiting the aggregate value 

of the protected software and training 

services that a Donor could provide to 

a Recipient. The limit under the 

proposed pre-interoperability safe 

harbor would be directly related to the 

limit adopted in connection with the 

electronic prescribing safe harbor 

discussed at II.A.3. There, we note 

various alternatives we are considering 

in connection with a limiting cap and 

outline issues about which we are 

soliciting public comments. We are 

considering similar alternatives, and are 

interested in similar comments, in 

connection with a safe harbor for 

electronic health records. Given that 

electronic health records technology has 

high value to Recipients, we are 

considering several approaches, 

including: (1) An aggregate dollar cap; 

(2) a cap that would be set at a 

percentage of the value of the 

technology to the Recipient (thus 

requiring Recipients to share a portion 

of the costs and reducing windfall 

benefits to Recipients); or (3) a cap set 

at the lower of a fixed dollar amount or 

a percentage of the value of the 

technology to the Recipient. 

We are soliciting comments on how a 

cap under a safe harbor for electronic 

health records would relate to a cap 

under proposed § 1001.952(x) and how 

the value of technology provided under 

the final safe harbors would be 

aggregated. We are concerned that 

Donors may abuse the proposed 

exceptions for electronic prescribing 

items and services and electronic health 

records software and training services 

by selectively relying on both 

exceptions to maximize the value of 

technology provided to Recipients as a 

means of disguising payments for 

referrals. We believe conditions should 

be included in the final regulation to 

prevent this abuse and are considering 

requiring an overall cap on value, as 

well as documentation requirements 

that integrate all technology provided 

under the final exceptions. We are 

considering requiring an overall cap on 

the value of donated technology (such 

that the value of technology donated 

under the electronic prescribing safe 

harbor would count towards the total 

value of the software protected under 

the pre-interoperability safe harbor), as 

well as documentation requirements 

that integrate all technology provided 

under any safe harbor. 

Another concern, particularly in light 

of the cost of electronic health records 

technology, is that Donors may attempt 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59023 

4See supra note 3. 

to shift the financial burden of 

providing electronic health records 

technology to the Federal health care 

programs or beneficiaries. Accordingly, 

we would likely include a safe harbor 

condition that would prohibit such cost 

shifting. Finally, we are soliciting 

comments on whether and, if so, how to 

take into account Recipient access to 

any software that is publicly available 

either free or at a reduced price. 

Donors and Recipients—The preinteroperability safe harbor would 

protect the same categories of Donors 

and Recipients as the proposed 

§ 1001.952(x)(1) and would define them 

similarly. We believe that Donors 

should be limited to hospitals, group 

practices, PDP sponsors, and MA 

organizations, because they have a 

direct and primary patient care 

relationship and therefore have a central 

role in the health care delivery 

infrastructure that justifies safe harbor 

protection for the furnishing of 

electronic health records technology 

that would not be appropriate for other 

types of providers and suppliers, 

including providers and suppliers of 

ancillary services. Moreover, hospitals, 

group practices, PDP sponsors, and MA 

organizations are potentially in a better 

position to promote widespread use of 

electronic health records technology 

that has the greatest degree of openness 

and interoperability. We do not believe 

that providers and suppliers of ancillary 

services, such as laboratories, have a 

comparable stake in advancing the goal 

of interoperable electronic health 

records for patients. In our experience, 

laboratories and others have used free or 

deeply discounted goods, such as 

computers and fax machines, to 

influence referrals improperly. 

Longstanding OIG guidance makes clear 

that gifts of equipment to referral 

sources that have value to the 

physicians are highly suspect under the 

anti-kickback statute.4 We are interested 

in comments regarding whether other 

categories of Donors or Recipients 

should be included and why. We are 

also interested in comments with 

respect to whether different or 

alternative conditions should apply to 

any category of donor. 

Other Conditions—Finally, to further 

reduce the risk of fraud and abuse, we 

would incorporate in the preinteroperability safe harbor for 

electronic health records certain other 

conditions described above in 

connection with proposed 

§ 1001.952(x). These conditions would 

include the requirement at proposed 

1001.952(x)(6) that neither the eligibility 

of a recipient to receive items and 

services from a donor, nor the amount 

and nature of the items and services 

received, may be determined in a 

manner that takes into account the 

volume or value of the recipient’s 

referrals to the donor or other business 

generated between the parties. In 

addition, we would include the 

proposed anti-solicitation provision 

(§ 1001.952(x)(5)), the proposed 

documentation requirements 

(§ 1001.952(x)(7)), and the proposed allpayors requirement (§ 1001.952(x)(4)). 

Sunset Provision—We are considering 

whether to sunset the preinteroperability safe harbor discussed 

here once the post-interoperability safe 

harbor discussed in the next section 

becomes effective. 

Our intent is that the proposed preinteroperability safe harbor outlined 

above would promote the adoption of 

open, interconnected, interoperable 

electronic health records and electronic 

prescribing systems. We are interested 

in comments addressing whether this 

pre-interoperability safe harbor 

protection may have the unintended 

effect of impeding the beneficial spread 

of interoperable electronic health 

records systems by promoting closed or 

isolated systems or systems that 

effectively tie physicians to particular 

providers or suppliers. For example, a 

hospital that donates expensive 

technology to a physician may exercise 

control over that physician sufficient to 

preclude or discourage other systems or 

health plans from having access to the 

physician for their own networks. 

2. Proposed Post-Interoperability Safe 

Harbor 

The adoption of uniform 

interoperability standards for electronic 

health records, as well as product 

certification criteria to ensure that 

products meet those standards, will 

help prevent certified technology from 

being used by unscrupulous parties to 

lock in streams of referrals or other 

business. While interoperability does 

not vitiate the risk (we are concerned 

that parties may use the offer or grant of 

free technology itself as a vehicle to 

capture referrals), it may mitigate the 

risk sufficiently to warrant different or 

modified safe harbor conditions. It 

would be important that the protected 

electronic health records software be 

certified in accordance with product 

certification criteria adopted by the 

Secretary, and that the electronic 

prescribing component comply with 

electronic prescribing standards 

established by the Secretary under the 

Part D program, to the extent those 

standards are not incorporated into the 

product certification criteria. Once 

product certification criteria are adopted 

for interoperable electronic health 

records technology, we intend to 

finalize a post-interoperability safe 

harbor. 

In particular, we are considering a 

post-interoperability safe harbor that 

would include the conditions described 

above in section II.B.1 in connection 

with the pre-interoperability safe 

harbor, with the following differences. 

First, we are considering whether the 

safe harbor should protect additional 

software applications, provided 

electronic prescribing and electronic 

health records are the core functions of 

the protected software. We intend to 

protect systems that improve patient 

care rather than systems comprised 

solely or primarily of technology that is 

incidental to the core functions of 

electronic prescribing and electronic 

health records. As with the preinteroperability safe harbor, technology 

protected under this safe harbor must 

include an electronic prescribing 

component and may not be used by a 

Recipient solely to conduct personal 

business or business unrelated to the 

Recipient’s medical practice. We are 

soliciting public comments with respect 

to whether we should also or instead 

require that electronic health records 

software include a CPOE component. 

We are also soliciting public comments 

on what types of software should be 

protected under the safe harbor and 

methods for ensuring that electronic 

prescribing and electronic health 

records are the core functions of the 

donated technology. 

Second, we are considering whether 

to protect categories of Donors or 

Recipients, beyond those specifically set 

forth in section 1860D–4(e)(6) of the Act 

and whether different or alternative 

conditions should apply to any category 

of permissible Donors or Recipients. We 

are interested in comments addressing 

the types of individuals or entities that 

should be protected, the degree of need 

for protection, and the safeguards that 

should be imposed to protect against 

fraud and abuse. 

Third, in light of the enhanced 

protection against some types of fraud 

and abuse offered by certified, 

interoperable systems, we are 

considering permitting Donors to use 

selective criteria for choosing 

Recipients, provided that neither the 

eligibility of a recipient, nor the amount 

or nature of the items or services, is 

determined in a manner that directly 

takes into account the volume or value 

of referrals or other business generated 

between the parties. We are considering 

enumerating several selection criteria 

59024 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

which, if met, would be deemed not to 

be directly related to the volume or 

value of referrals or other business 

generated between the parties (for 

example, a determination based on the 

total number of hours that the recipient 

practices medicine or a determination 

based on the size of the recipient’s 

medical practice). Selection criteria that 

are based upon the total number of 

prescriptions written by a Recipient 

would not be prohibited, but the 

proposed regulation would prohibit 

criteria based upon the number or value 

of prescriptions written by the Recipient 

that are dispensed or paid by the Donor, 

as well as any criteria directly based on 

any other business generated between 

the parties. The safe harbor would not 

protect arrangements that seek to induce 

a Recipient to change loyalties from 

other providers or plans to the Donor. 

We are soliciting public comments on 

criteria for selecting recipients of the 

donated technology. 

We expect that this approach would 

ensure that donated technology can be 

targeted at Recipients who use it the 

most in order to promote a public policy 

favoring adoption of electronic health 

records, while discouraging problematic 

direct correlations with Federal health 

care program referrals (for example, a 

hospital offering a physician 10 new 

computers for every 500 referrals of 

Medicare-payable procedures.) This 

approach would be a deliberate 

departure from other safe harbors based 

on the unique public policy 

considerations surrounding electronic 

health records and the Department’s 

goal of encouraging widespread 

adoption of interoperable electronic 

health records. We caution, however, 

that outside of the context of electronic 

health records, as specifically addressed 

in this proposed rule, both direct and 

indirect correlations between the 

provision of free goods or services and 

the volume or value of referrals or other 

business generated between the parties 

are highly suspect under the antikickback statute (and may evidence 

outright violations) and do not meet the 

requirements of other safe harbors under 

the statute or 42 CFR 1001.952. 

We are interested in public comments 

about this approach to selecting 

Recipients, including whether there 

may be unintended consequences that 

would inhibit the adoption of 

interoperable technology or lead to 

abusive arrangements and, if so, 

whether more or less restrictive 

conditions are appropriate. 

Fourth, we are considering a cap on 

the value of the donated interoperable 

software that may be larger than the cap 

under the pre-interoperability safe 

harbor. With respect to a limiting cap, 

we are considering issues similar to 

those discussed in the preceding 

sections on the proposed electronic 

prescribing safe harbor and the 

proposed pre-interoperability safe 

harbor, and are interested in comments 

on those same issues as they might 

relate to a post-interoperability safe 

harbor. 

In sum, there are a number of ways in 

which a post-interoperability safe 

harbor might be structured, and 

flexibility in one condition might 

require tightening of another. We are 

interested in comments on the overall 

approach outlined above and how the 

various conditions might be crafted to 

ensure that the safe harbor conditions, 

taken as a whole, provide sufficient 

protection against fraud and abuse. 

C. Additional Solicitation of Public 

Comments: Community-Wide Health 

Information Systems 

The regulations promulgated in 

accordance with section 1877 of the Act 

include an exception at 42 CFR 

411.357(u) for the provision of 

information technology items and 

services by certain entities to physicians 

to enable the physicians to participate 

in a community-wide health 

information system designed to enhance 

the overall health of the community. 

The systems must facilitate access to, 

and sharing of, electronic health care 

records and any complementary drug 

information systems, general health 

information, medical alerts, and related 

information for patients served by 

community providers and practitioners. 

Certain other conditions must also be 

satisfied. We have received a number of 

comments in response to our 2004 

Annual Solicitation of New Safe 

Harbors and Special Fraud Alerts (69 FR 

71766; December 10, 2004) requesting 

that we create a comparable safe harbor 

under the anti-kickback statute. While 

we have not determined whether such 

a safe harbor is needed or prudent, we 

are interested in public comments at 

this time addressing the need for, and 

conditions that should pertain to, such 

a safe harbor. Because of the close 

relationship between the topic of this 

proposed rulemaking and the suggested 

new safe harbor for community-wide 

health information systems, we believe 

it appropriate to solicit comments on 

the latter issue as part of this 

rulemaking. 

III. Regulatory Impact Statement 

We have examined the impact of this 

rule as required by Executive Order 

12866, the Unfunded Mandates Reform 

Act of 1995, the Regulatory Flexibility 

Act (RFA) of 1980, and Executive Order 

13132. 

Executive Order 12866 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). A regulatory impact 

analysis must be prepared for major 

rules with economically significant 

effects (i.e., $100 million or more in any 

given year). 

This is not a major rule, as defined at 

5 U.S.C. 804(2), and it is not 

economically significant, since it would 

not have a significant effect on program 

expenditures, and there are no 

additional substantive costs to 

implement the resulting provisions. 

This proposed rule would create new 

safe harbors under the anti-kickback 

statute for certain entities to provide 

technology-related items and services to 

certain parties for electronic prescribing 

and health record purposes. This 

proposal would merely create safe 

harbors under the anti-kickback statute 

for arrangements under which certain 

entities would help physicians and 

certain other individuals and entities 

with their electronic prescribing and 

health records expenses. In doing so, 

this rulemaking would impose no 

requirements on any party. Parties may 

voluntarily seek to comply with this 

provision so that they have assurance 

that their actions will not subject them 

to any enforcement actions under the 

anti-kickback statute. The safe harbors 

should facilitate the adoption of 

electronic prescribing and health 

records technology by filling a gap 

rather than creating the primary means 

by which physicians will adopt these 

technologies. In other words, we do not 

believe that Donors will fund all of the 

health information technology used by 

Recipients. However, since we cannot 

predict which entities will offer these 

items and services, we cannot determine 

with certainty the aggregate economic 

impact of this proposed rulemaking. We 

do not believe, however, that the impact 

of this electronic prescribing safe harbor 

rule would approach $100 million 

annually. Therefore, this proposed rule 

is not a major rule. We note that this 

proposed rule would remove a 

perceived obstacle to the provision of 

qualifying electronic prescribing 

technology and electronic health 

records software and directly related 

training services (for purposes of this 

Regulatory Impact Statement, herein 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59025 

referred to as ‘‘qualifying health 

information technology’’) by certain 

entities. Although this proposed rule 

applies to donations of qualifying health 

information technology by hospitals, 

group practitioners, PDP sponsors, and 

MA plans, we do not expect that many 

group practices, PDP sponsors or MA 

plans would use these proposed safe 

harbors (and in some cases, existing safe 

harbors may also be available or parties 

may use the OIG’s advisory opinion 

process). Notwithstanding, regardless of 

whether donations would be allowed 

under existing safe harbors or those that 

are included in this proposed rule, we 

encourage commenters to provide 

information on the costs that would 

likely be incurred by Donors that would 

choose to furnish qualifying health 

information technology to Recipients, as 

well as other related costs that would 

likely be incurred by both Donors and 

Recipients, such as costs incurred for 

changes in office procedures. 

Our analysis under Executive Order 

12866 of the expenditures that entities 

may choose to make under this 

proposed rule is restricted by potential 

effects of outside factors, such as 

technological progress and other market 

forces, future certification standards, 

and the companion proposed physician 

self-referral exceptions. Furthermore, 

both the costs and potential savings of 

electronic prescribing, EHRs, 

computerized physician order entry, 

and billing and scheduling software 

vary to the extent to which each element 

operates as a stand alone system or as 

part of an integrated system. We 

welcome comments that will help 

identify both the independent and 

synergistic effects of these variables. As 

noted in the electronic prescribing 

proposed rule, which was published on 

February 4, 2005 (70 FR 6256, 6268–

6273), the Department expects that 

donors may experience net savings with 

electronic prescribing in place and 

patients would experience significant, 

positive health effects. We have not 

repeated that analysis in this proposed 

rule. Moreover, we have not replicated 

the extensive analysis of costs, benefits, 

and potential impact on patient care 

contained in the companion physician 

self-referral proposed rule. We believe 

the analysis set forth there may be 

similarly relevant to the potential 

impact of the proposed safe harbors. As 

also noted there, we assume that 

qualifying health information 

technology costs and benefits will be 

realized sooner or later. Even without 

government intervention, there is a 

lively market today, and as consensus 

standards evolve, that market will grow. 

The question as to the regulatory impact 

for this proposed rule is: to what extent 

would the use of these proposed antikickback safe harbors accelerate 

adoption of electronic prescribing and 

EHRs, taking into account available 

policy instruments, notably the 

development of interoperable 

standards? The baseline information is 

uncertain. As described in more detail 

in the physician self-referral proposed 

rule, there are numerous estimates of 

adoption of electronic prescribing by 

health plans, hospitals, physicians, and 

(for prescribing of drugs only) 

pharmacies. As noted there, these 

estimates are highly sensitive to 

assumptions. For example, the 

maximum allowed remuneration might 

be as little as half as much or as much 

as twice as much. The rate of adoption 

might be higher or lower than estimated. 

The proportion receiving remuneration 

could be lower or higher than estimated, 

depending on willingness of hospitals, 

group practices, MA organizations and 

PDP sponsors to subsidize investments 

in health information technology. We 

are interested in comments on whether 

information exists that would allow 

more definite estimates as to the effects 

of these proposed safe harbors. 

Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies assess the anticipated 

costs and benefits of Federal mandates 

before issuing any rule that may result 

in the mandated expenditure by State, 

local, or tribal governments, in the 

aggregate, or by the private sector, of 

$100 million in 1995 dollars (a 

threshold adjusted annually for inflation 

and now approximately $120 million). 

This proposed rule would impose no 

mandates. Any actions taken under this 

rule would be voluntary. Furthermore, 

such actions are likely to result in cost 

savings, not net expenditures, and any 

expenditures would be undertaken by 

government-owned hospitals in their 

business capacity, without any 

necessary impact on state, local, or 

tribal governments, or their expenditure 

budgets, as such. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

and the Small Business Regulatory 

Enforcement and Fairness Act of 1996, 

which amended the RFA, require 

agencies to analyze options for 

regulatory relief of small businesses. For 

purposes of the RFA, small entities 

include small businesses, nonprofit 

organizations, and Government 

agencies. Most hospitals and most other 

providers and suppliers are small 

entities, either by nonprofit status or by 

having revenues of $6 million to $29 

million in any one year. Individuals and 

States are not included in the definition 

of a small entity. We are not preparing 

an analysis for the RFA because we have 

determined that this proposed rule 

would not have a significant impact on 

small businesses. We base our decision 

on the fact that we expect the 

rulemaking on electronic prescribing 

and health records to be beneficial to 

the affected entities because it will 

allow them to better reap the benefits of 

increased use of electronic prescribing 

and health records technology, 

including reduction of medical errors 

and increased operational efficiencies. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 603 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Metropolitan Statistical Area and has 

fewer than 100 beds. We are not 

preparing an analysis for section 1102(b) 

of the Act because we have determined 

that this rule would not have a 

substantial negative impact on the 

operations of a substantial number of 

small rural hospitals. If this rule has any 

impact, it would be a substantial 

positive impact in reducing costly 

medical errors and increasing 

operational efficiencies through the use 

of technology. 

Executive Order 13132 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

Governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation does not impose 

any costs on State or local Governments, 

the requirements of Executive Order 

13132 are not applicable. 

The Office of Management and Budget 

(OMB) has reviewed this rule in 

accordance with Executive Order 12866. 

IV. Paperwork Reduction Act 

In accordance with section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995, we are required 

to solicit public comments, and receive 

final OMB approval, on any information 

collection requirements set forth in 

rulemaking. 

The safe harbors promulgated in this 

proposed rule impose some minimal 

59026 Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 

information collection requirements. 

Specifically, for an arrangement to fall 

within the proposed safe harbors would 

have to fulfill the following 

documentation requirements: (1) There 

must be a writing signed by the parties; 

(2) the written agreement must identify 

the items or services being provided and 

their values; (3) the written agreement 

must incorporate or cross-reference 

prior relevant agreements; and (4) the 

written agreement must contain a 

certification by the Recipient that the 

items and services to be provided do not 

duplicate any existing items or services 

the Recipient already has or has 

obtained from another source. 

Compliance with a safe harbor under 

the Federal anti-kickback statute is 

voluntary, and no party is ever required 

to comply with a safe harbor. Instead, 

safe harbors merely offer an optional 

framework for structuring business 

arrangements to ensure compliance with 

the anti-kickback statute. All parties 

remain free to enter into arrangements 

without regard to a safe harbor, so long 

as the arrangements do not involve 

unlawful payments for referrals under 

the anti-kickback statute. Thus, we 

believe that the documentation 

requirements necessary to enjoy safe 

harbor protection do not qualify as an 

added paperwork burden in accordance 

with 5 CFR 1320.3(b)(2), because the 

requirements are consistent with usual 

and customary business practices and 

because the time, effort, and financial 

resources necessary to comply with the 

requirements would largely be incurred 

in the normal course of business 

activities. 

We are soliciting public comments 

with respect to these requirements. 

Comments on these requirements 

should be sent to the following address 

within 60 days following the Federal 

Register publication of this interim final 

rule: 

OIG Desk Officer, Office of 

Management and Budget, Room 10235, 

New Executive Office Building, 725 

17th Street, NW., Washington, DC 

20053, FAX: (202) 395–6974. 

V. Public Inspection of Comments and 

Response to Comments 

Comments will be available for public 

inspection beginning November 10, 

2005 in Room 5518, 330 Independence 

Avenue, SW., Washington, DC on 

Monday through Friday of each week 

(Federal holidays excepted) between the 

hours of 9 a.m. and 4 p.m., (202) 619–

0089. 

Because of the large number of items 

of correspondence we normally receive 

on Federal Register documents 

published for comment, we are not able 

to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and will respond to the 

comments in the preamble of the final 

rule. 

List of Subjects in 42 CFR Part 1001 

Administrative practice and 

procedure, Fraud, Grant programs—

health, Health facilities, Health 

professions, Maternal and child health, 

Medicaid, Medicare. 

Accordingly, 42 CFR part 1001 would 

be amended as set forth below: 

PART 1001—[AMENDED] 

1. The authority citation for part 1001 

would be amended to read as follows: 

Authority: 42 U.S.C. 1302, 1320a–7, 

1320a–7b, 1395u(j), 1395u(k), 1395w–

104(e)(6), 1395y(d), 1395y(e), 

1395cc(b)(2)(D), (E) and (F), and 1395hh; and 

sec. 2455, Pub. L. 103–355, 108 Stat. 3327 (31 

U.S.C. 6101 note). 

2. Section 1001.952 would be 

amended by republishing the 

introductory text, and by adding (x) to 

read as follows: 

§ 1001.952 Exceptions. 

The following payment practices shall 

not be treated as a criminal offense 

under section 1128B of the Act and 

shall not serve as the basis for an 

exclusion: 

* * * * * 

(x) Electronic Prescribing Items and 

Services. As used in section 1128B of 

the Act, ‘‘remuneration’’ does not 

include nonmonetary remuneration 

(consisting of items and services in the 

form of hardware, software, or 

information technology and training 

services) necessary and used solely to 

receive and transmit electronic 

prescription information, if all of the 

following conditions are met: 

(1) The items and services are 

provided—

(i) In the case of a hospital, by the 

hospital to physicians who are members 

of its medical staff; 

(ii) In the case of a group practice, by 

the group practice to prescribing health 

care professionals who are members of 

the group practice; and 

(iii) In the case of a PDP sponsor or 

MA organization, by the sponsor or 

organization to pharmacists and 

pharmacies participating in the network 

of such sponsor or organization and to 

prescribing health care professionals. 

(2) The items and services are donated 

as part of, or are used to access, an 

electronic prescription drug program 

that meets the applicable standards 

under Medicare Part D at the time the 

items and services are furnished. 

(3) The donor (or any person on the 

donor’s behalf) must not take any 

actions to limit or restrict unnecessarily 

the use or compatibility of the items or 

services with other electronic 

prescription information items or 

services or electronic health information 

systems. 

(4) With respect to items or services 

that are of the type that can be used for 

any patient without regard to payor 

status, the donor may not restrict, or 

take any action to limit, the recipient’s 

right or ability to use the items or 

services for any patient. 

(5) The prescribing health care 

professional, pharmacy, or pharmacist 

(or any affiliated group, employee, or 

staff member) does not make the receipt 

of items or services a condition of doing 

business with the donor. 

(6) Neither the eligibility of a 

prescribing health care professional, 

pharmacy, or pharmacist for the items 

or services, nor the amount or nature of 

the items or services, is determined in 

a manner that takes into account the 

volume or value of referrals or other 

business generated between the parties. 

(7) The arrangement is set forth in a 

written agreement that—

(i) Is signed by the parties; 

(ii) Specifies the items or services 

being provided and the value of those 

items and services; 

(iii) Covers all of the electronic 

prescribing items and services to be 

furnished by the donor (or affiliated 

parties) to the recipient; and 

(iv) Contains a certification by the 

recipient that the items and services are 

not technically or functionally 

equivalent to items and services the 

recipient already possesses or has 

obtained. The recipient will be deemed 

not to comply with this subparagraph if 

the certification the recipient provides 

is not full, complete, and accurate, to 

the best of the recipient’s knowledge. 

(8) The donor did not have actual 

knowledge of, and did not act in 

reckless disregard or deliberate 

ignorance of, the fact that the recipient 

possessed or had obtained items and 

services that were technically or 

functionally equivalent to those donated 

by the donor. 

Note to Paragraph (x): For purposes of 

paragraph (x) of this section, group practice 

shall have the meaning set forth at § 411.352; 

members of a group practice shall mean all 

persons covered by the definition of 

‘‘member of the group practice’’ at § 411.351, 

as well as other prescribing health care 

professionals who are owners or employees 

of the group practice; prescribing health care 

professional shall mean a physician or other 

Federal Register / Vol. 70, No. 195 / Tuesday, October 11, 2005 / Proposed Rules 59027 

health care professional licensed to prescribe 

drugs in the State in which the drugs are 

dispensed; PDP sponsor or MA organization 

shall have the meanings set forth at §§ 423.4 

and 422.2, respectively. 

Dated: March 15, 2005. 

Daniel R. Levinson, 

Acting Inspector General. 

Approved: August 12, 2005. 

Michael O. Leavitt, 

Secretary. 

[FR Doc. 05–20315 Filed 10–5–05; 10:49 am] 

BILLING CODE 4150–01–P