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    Medicare's Consumer Protection Rules to Be Relaxed

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    Government Moves to Expand E-Medical Records

    Oct. 6, 2005 -- Bush administration officials on Wednesday proposed to relax some federal antikickback rules in an effort to speed the spread of computerized medical records.

    Officials said the move would help more small medical practices and doctors' offices use electronic records, widely viewed as key to cutting down on medical errors and reducing health costs.

    A 1998 Institute of Medicine report estimated that as many as 98,000 Americans die each year because of medical errors. Prescription errors and other treatment mistakes are also thought to contribute billions to rising health care prices.

    President Bush has tagged the wider use of electronic medical records as one of his top health care priorities. Many large hospitals already use paperless systems, but smaller clinics and doctors' offices have been slow to take up the technologies.

    Those practices worry about the risk of the buying expensive new electronic systems that in the future may not be able to communicate with those used by insurers, hospitals, or the government.

    Federal Medicare antikickback rules currently bar doctors from taking any form of payments in exchange for referrals to hospitals, and also prevent hospitals from making undisclosed arrangements with independent physicians in exchange for later business.

    Bush officials said their plan would now relax some of those rules. Hospitals could now donate or sell at a discount computers or software to outside doctors in an effort to tie those offices in with electronic hospital records systems.

    "Our purpose is to allow for greater integration of those systems," Health and Human Services Secretary Michael O. Leavitt said.

    Leavitt unveiled the changes at George Washington University Medical Associates, a large Washington-based clinic that uses a new electronic medical records system.

    "The phrase 'pull the medical record' is no longer part of the vernacular here, he said.

    Leavitt acknowledged that the administration could raise questions about whether its plan significantly weakens consumer protections. On Wednesday it was unclear how doctors' offices and hospitals qualifying for the exemption would be prevented from exploiting otherwise illegal financial arrangements.

    A final version of the rules will be issued after a 60-day public comment period.

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