Hospitals Subsidizing Community Physician EHRs, Tax Implications for Both Parties

Linda Sauser Moroney and Jennifer R. Breuer, Partners, Drinker Biddle Gardner Carton. Two years have passed since CMS/OIG regulations were issued allowing hospitals to subsidize ambulatory electronic health record arrangements for community physicians on their medical staffs. Since that time, the IRS has provided informal guidance to assist hospitals in ensuring that such arrangements won’t risk their tax-exempt status. Nonetheless, the lurking question remains as to whether such arrangements result in taxable income to participating physicians. This session addresses these tax considerations, the parties’ respective risks, and how hospitals are tackling these questions.