Last Friday, the IRS issued an advisory that should allow tax-exempt hospitals to proceed with plans to share certain health information technology (HIT) with physicians. The issue has been that by doing so, a tax-exempt organization would be granting a private benefit and inurement to individuals. Coupled with the DHHS rules published last fall that granted a safe harbor for this sharing, hospitals and physicians a fairly clear field to pursue such cooperative arrangements.
In their recent newsletter, the Davis, Wright and Tremaine law firm wrote:
- The HIT subsidy arrangement must require both the hospital and the participating physicians to comply with the HHS regulations on a continuing basis.
- The arrangement must provide that, to the extent permitted by law, the hospital may access all of the electronic medical records that the physician creates using the HIT and related services subsidized by the hospital.
- The hospital must ensure that the HIT and related services are available to all of its medical staff physicians.
- The hospital must provide the same level of subsidy to all of its medical staff physicians, or otherwise vary the level of subsidy by applying criteria related to meeting the healthcare needs of the community.
The DWT newsletter goes on to suggest that it is still an open question whether subsidies or other aid from hospitals of any stripe would consititute taxable income to the physicians.
On the one hand, the federal government is pushing the implementation of electronic health record systems on a broad scale. On the other hand, the agencies are being very slow in revision regulations to clear serious obstacles. These issues need to be settled so that the players will have clear guidance on the rules and move forward. Even if EHS assistance was taxable income, it could still be a good deal for physician practices. But absent guidance, no one knows for sure what the economic impact will be.
What to do? Start meeting with your hospital(s) and actively plan to implement EHS. Go visit your congressional representatives and senators and gain their support to pressure the feds to act to clear up remaining issues. In preparation, raise this issue with your accountant or tax attorney to get their guidance for your particular situation – remember, general guidance is not a formal opinion, so you need to always get guidance from the professionals who know you best.