New rules could speed adoption of electronic health record keeping.

In a move that's encouraged the U.S. health insurance industry; the federal government recently proposed changes to its regulations that ultimately could make it less costly and easier for doctors to adopt electronic health records and electronic prescription technology.

Among the biggest hurdles facing most health insurers is getting physicians to invest in electronic health records, according to Dr. Andrew Wiesenthal, associate executive director of the Permanente Federation, part of Kaiser Permanente, a nonprofit, group practice health maintenance organization, based in Oakland, Calif.

"The investment to put in a system must be made on the physician side, but the savings are often realized elsewhere administratively, and the doctors don't see any of it," Wiesenthal said, questioning why a fee-for-service doctor would spend $15,000 to $20,000 so an HMO or pharmacy could save money.

A national health information network is expected to save about $140 billion a year through improved care and reduced duplication of medical tests.

But widespread adoption of electronic health records and the ability to share information among physicians, hospitals, pharmacies and health insurers won't occur for at least the next decade.

Doctors resist investing in electronic health records because of the up-front cost. On average, it costs about $35,000 per doctor to set up e-health records in a small medical practice.

In 2004, Kaiser Permanente began implementing its electronic health-record system, called "KP HealthConnect," which uses a common technology to help the organization provide real-time medical information to healthcare providers. The initiative also involves a nationwide information management and delivery system that covers every element of the health program and the clinical record, along with appointments, registration and billing.

Currently, health insurers can encourage physicians who see patients that are their subscribers to use tools such as electronic claims submissions, but the insurers can't buy and offer electronic health-record systems to the doctors in their networks because of the various legal and regulatory obstacles, Wiesenthal explained.

But those obstacles eventually may be removed, as the Centers for Medicare & Medicaid Services and the U.S. Department of Health & Human Services' Office of Inspector General on Oct. 5 proposed new rules that "represent a major step forward in meeting President Bush's goal of widespread adoption of electronic health records."

A CMS regulatory proposal would create exceptions to the physician self-referral law, or the Stark law. Currently, physicians in Medicare are prohibited from referring Medicare patients for some health services to health-care entities with which the physician has a financial relationship, unless an exception applies, according to HHS.

The new proposal would allow hospitals and certain health-care organizations to provide hardware, software and related training services to physicians for e-prescribing and electronic health records, particularly when the support involves systems that are "interoperable" and therefore can exchange information among health-care providers, HHS said.

The OIG, meanwhile, proposed "safe harbors" for arrangements involving the donation of technology for e-prescribing and electronic health records. Arrangements for providing items and services that meet the safe-harbor requirements would be exempt from enforcement under the federal anti-kickback statute, HHS said.