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ONC & CMS Proposed Rules – Part 5: Business Models

Grant Barrick
Dave Levin

By DAVE LEVIN, MD and GRANT BARRICK

The Office of the National Coordinator (ONC) and the Centers for Medicare and Medicaid (CMS) have proposed final rules on interoperability, data blocking, and other activities as part of implementing the 21st Century Cures Act. In this series, we will explore the ideas behind the rules, why they are necessary and the expected impact. Given that these are complex and controversial topics open to interpretation, we invite readers to respond with their own ideas, corrections, and opinions. In part five of this series, we look at how competition unlocks innovation, and how the proposed rules may disrupt the balance between innovation, intellectual property (IP), and supporting business models.  

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The recent publication of proposed rules by ONC and CMS set off a flurry of activity. In anticipation of their implementation, the health care industry is wrestling with many questions around business models. What practices inhibit competition and innovation? How do we balance the need for competition while protecting legitimate intellectual property rights? How can vendors ensure profit growth when pricing is heavily regulated? In this article, we will examine how competition unlocks innovation and the possible disruptions the proposed rules may bring for innovation, intellectual property (IP) and supporting business models.

Unlocking Innovation via Competition

In most markets, innovation is driven forward by competition. Businesses compete on equal footing, and their investment in R&D drives innovation forward. Innovation in health care has been dramatically outpaced by other markets, leading to an urgent need for both disruptive and evolutionary innovation.

What is inhibiting health care innovation? The rules identify a combination of tactics employed in health care that restrict the free flow of clinical data, such as:

  • NDAs
  • Confidentiality Clauses
  • Hold-harmless Agreements
  • Licensing Language

These tactics slow innovation by contributing to an environment where stakeholders resist pushing the boundaries — often because they are contractually obligated not to. The legislation and proposed rules are designed to address the ongoing failure of the market to resolve these conflicts.

As the rules are finalized, we will continue to monitor whether the ONC defines these practices as innovation stifling and how they will implement regulations — both carrot and stick — to move the industry forward.

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ONC & CMS Proposed Rules – Part 4: Information Blocking

By DAVE LEVIN MD

The Office of the National Coordinator (ONC) and the Centers for Medicare and Medicaid (CMS) have proposed final rules on interoperability, data blocking and other activities as part of implementing the 21st Century Cures Act. In this series, we will explore ideas behind the rules, why they are necessary and the expected impact. Given that these are complex and controversial topics open to interpretation, we invite readers to respond with their own ideas, corrections and opinions.

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When it comes to sharing health data, the intent of the 21st Century Cures Act is clear: patients and clinicians should have access to data without special effort or excessive cost. To make this a reality, the act addresses three major areas: technical architecture, data sets and behaviors. Part two of our series looked at how APIs address technical issues while part three covered the new data requirements. In this article, we delve into information blocking. A companion podcast interview with ONC expert Michael Lipinski provides an even deeper dive into this complex topic.

Information Blocking Comes in Many Forms

The Public Health Services Act (PHSA) broadly defines information blocking as a practice that is “likely to interfere with, prevent, or materially discourage access, exchange, or use of electronic health information.” The overarching assumption is information will be shared though the Act does authorize the Secretary to identify reasonable and necessary exceptions.

The proposed rules focus on “technical requirements as well as the actions and practices of health IT developers in implementing the certified API.” Information blocking can come in a variety of forms. It can be direct and obvious (“No you can’t have this data ever!”) or indirect and subtle (“Sure, you can have the data, but it will cost you $$$ and we won’t be able to get to your request for at least 12 months.”). The proposed rules are designed to address both. This passage illustrates some of the concerns:

“Health IT developers are in a unique position to block the export and portability of data for use in competing systems or applications, or to charge rents for access to the basic technical information needed to facilitate the conversion or migration of data for these purposes.”

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ONC & CMS Proposed Rules | Part 2: Interoperability

Dave Levin

By DAVE LEVIN MD 

The Office of the National Coordinator (ONC) and the Centers for Medicare and Medicaid (CMS) have proposed final rules on interoperability, data blocking and other activities as part of implementing the 21st Century Cures Act. In this series, we will explore the ideas behind the rules, why they are necessary and the expected impact. Given that these are complex and controversial topics open to interpretation, we invite readers to respond with their own ideas, corrections and opinions. You can find Part 1 of the series here

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In 2016, Congress enacted the 21st Century Cures Act with specific goals to “advance interoperability and support the access, exchange and use of electronic health information.” The purpose was to spur innovation and competition in health IT while ensuring patients and providers have ready access to the information and applications they need.

The free flow of data and the ability for applications to connect and exchange it “without special effort” are central to and supported by a combination of rules proposed by ONC and CMS. These rules address both technical requirements and expected behaviors. In this article, we look at specific technical and behavioral requirements for interoperability. Future articles will examine data blocking and other behavioral issues.

Compatible “Plugs and Sockets”

The proposed rules explicitly mandate the adoption and use of application programming interface (API) technology (or a successor) for a simple reason: APIs have achieved powerful, scalable and efficient interoperability across much of the digital economy. Put simply, APIs provide compatible “plugs and sockets” that make it easy for different applications to connect, exchange data and collaborate. They are an essential foundation for building the next generation of health IT applications. (Note: readers who want to go deeper into APIs can do so at the API Learning Center).

APIs are versatile and flexible. This makes them powerful but can also lead to wide variations in how they work. Therefore, ONC is proposing that certified health IT applications use a specific API based on the Fast Healthcare Interoperability Resources (FHIR) specification. FHIR is a consensus standard developed and maintained by the standards development organization (SDO) Health Level–7 (HL7). Mandating the use of the FHIR standard API helps to ensure a foundational compatibility and basic interoperability. This gives API technology suppliers (like EHR vendors) a clear set of standards to follow in order to fulfill the API requirement. It also ensures “consumers” of that API (like hospitals and health IT developers), have consistency when integrating applications.

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