Contractual Considerations for Physicians When Entering Into Electronic Medical Records Service Agreements

What issues should a doctor look for in an electronic medical records service contract?

If you are a physician in private practice, or a small medical group, you may finally be considering incurring the cost of getting electronic medical records (“EMR”) for your practice. With the Medicare penalty going up next year, even those physicians who had avoided electronic medical records like the plague are now warming up to the idea.

Doctors seeking EMR software will come across multiple providers. All will require that the physician or group sign a service agreement of some kind. The agreements will be long, dense, and not very exciting. However, this agreement can have a profound impact on the future of your medical practice and how it operates. The first thing you should do is ask whether the agreement is negotiable or take-it-or-leave-it. The second thing you should is review the agreement for the following terms.

Purchasing Software or Licensing Software

One difference between EMR providers and how they will serve you, is whether you will be purchasing or licensing the software. If you are buying the software, you will probably be paying a large one time fee for the software and the initial setup. However, the software is now yours. Nobody can come and remove it from your computer or cut off your access to the software. If you are licensing, you are simply paying for the right to use the software, you own nothing. Since this is usually done on a monthly payment basis, once you stop paying your license fees, the electronic medical records provider can cut off your access to the software.

It should be noted that based on the agreements we have reviewed, those that purchase software will not receive updates or technical support unless they pay an additional fee, while those that license usually have the updates and tech support included in their monthly fee arrangement.

Information Security

Another big consideration is the security of the confidential client information and especially HIPAA compliance.

Who is responsible for the security of data stored off site in the cloud? Who has access to this data? Is this data backed up regularly? Who has access to the backups? Is the cloud HIPAA Compliant?

What data is stored on the office computer, and who is responsible for the security of that data? Who is responsible for the security of the wi-fi network? Does the EMR provider run a security compliance review with the medical office?

What are your remedies if the security of the data is compromised?

All of these questions need to be addressed in the agreement.

Ownership of Intellectual Property

As may be expected, in all of the agreements we have seen, the EMR provider reserves all rights as to the any trademarks, copyrights or patents in connection with their software. However, who should own the client information that the doctor’s office will be inputting into the software database? It should definitely be the physician, so be very wary of any provider that seeks to own or control this data. Also, there should be some terms for the physician to get this information out in a reasonable format in case the doctor decised to switch EMR systems, and that the data is available for some time after the switch.

HIPAA compliance requires that the EMR not sell confidential client information to any third parties, and most providers will not sell confidential information. However, some will sell data that they “mine”, or deduce, from the confidential information, such as “how many married males over 40 have erectile dysfunction” or “how many teens under 18 take anti-depressants”. If it bothers you to have the EMR providers make further profit off of your patients data, make sure they promise not to do so in the service agreement.

Guarantees and Warranties

In a way, picking an EMR system is like buying a car. You are making an investment and want to be sure that you are not wasting your money and time. With cars, it is common to get a guarantee that warranties your car for a certain number of miles or years.

Is the EMR provider willing to guarantee that the software is suitable for use by your practice and for your specific specialty?

Is the EMR provider willing to guarantee the accuracy of supplemental information in their system? What are your remedies if information you relied on to make a professional medical opinion was inaccurate?

Is the EMR provider willing to guarantee their software against crashes and interruption? If not, what are you actually paying for? If the system goes down and you are unable to work, who will reimburse you for the lost income?

Early Termination

Finally, there is always the issue of early termination. How much will the physician or office have to pay if they decide to terminate their service agreement early? Sometimes there will be multiple provisions for early termination based on the reason. If the doctors simply decide to stop using EMR, there will most likely be a fee. What if the reason for the termination is for-cause, such as dissatisfaction with the system? What if a doctor retires or becomes disabled, temporarily or permanently?

Attorney Contract Review

The issues discussed above are only a small fraction of what goes into an EMR service contract and there is no way to know what other terms might be thrown in there without reviewing the document. Further, there are some contractual terms that, even though they are very clearly expressed and known to both parties, are simply not enforceable in court. Relying on the protection of such unenforceable terms, or complying with such terms hen you don’t actually have to, can be detrimental. The bottom line here is that just as attorneys should not try to set broken bones, physicians should look to trained legal professionals to review and advise on contracts before they sign anything.

If you are a physician in need of contract review or other business services contact our firm today by calling 203-885-0500 or using the contact form on this site. We have successfully represented multiple medical professionals across multiple specialties in everything from business formation, organization and licensing to health insurance company approved medical provider list appeals. We are here to help you too.

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