By Daniel Shay, J.D.

Purchasing and implementing electronic health records (EHR) software is a daunting task. Finding software that suits your practice’s needs, negotiating terms and prices, installing the software, training yourself and your staff in its use, and securing timely and appropriate software updates and maintenance support are all challenging enough, without the added burden of wading through the legalese of a license agreement.

However, the license agreement is the controlling document for your relationship with the software vendor. It is critical in ensuring that you get what you want from the deal. This article briefly addresses some key issues to consider when reading your license agreement.

Who is the agreement with?

The answer to this question may not be as obvious as it seems. The agreement may be with the software developer, or with a “downstreamed” entity like an authorized reseller or vendor.

In agreements with developers, the developer often provides all related services (i.e., technical support, updates or application service provider (ASP) services). If the agreement is with a “downstreamed” entity, services may be provided by both entities. For example, the reseller may be responsible for updating the software, while the developer provides offsite data storage. If the developer is expected to provide services, but they are not a signing party to the agreement, it will be much harder to enforce the agreement against them if they violate the terms.

Support services

When you have identified who will provide which services, examine what those services specifically entail. These may include technical support, software bug-fixes and updates, data storage, claims processing, and clinical decision-making tools. These services may require additional fees, or that you designate a contact person to interact with the service provider.

Software updates are especially important in light of the meaningful use regulations (for more information on the federal government’s EHR incentive program, click here) and their specific requirements for software functionality (such as the ability to perform drug-drug and drug-allergy checks, and send preventive and follow-up reminders to patients).

The vendor should provide updates to comply with such requirements. However, make sure that the license clearly states that updates will be provided both for mandatory regulations like HIPAA, and for “optional” regulations like meaningful use.

Data storage

The location of your practice’s data is a key difference between ASP and server-based EHRs. On a server-based EHR, the software and data are stored on your practice’s computer server, and the data remains under your control. An ASP model EHR, by contrast, stores the software and your data often off-site on the EHR company’s computers, giving them far greater access to and control over your data.

Vendors may want to use your data for commercial purposes, which may not be a problem if the vendor complies with HIPAA. However, the license agreement should directly address when and how data will be used, and should state that you own data that you enter into the system. In addition, you should get something in return for the vendor’s use of your data.

Finally, when the license agreement terminates, pay attention to whether the vendor will convert data into a format readable by other EHRs. Do not allow the vendor to hold your data hostage if you are in a dispute.

When hammering out details of your purchase plan and license agreement, remember to ensure that you are granted access to the software source code. A contractual provision can either provide for you to have direct access to a copy of the source code or through some escrow arrangement that entitles you to the latest version of the code should your vendor not be able to support your EHR system.

Termination

How you get out of a license and what happens then is just as important as what happens during the term of the license. The time to deal with this is before you sign. Most licenses have a specific termination clause, but some grounds for termination (by either party) may be scattered throughout the agreement.

Take note of how far in advance each party must notify the other of its intent to terminate, or whether notice is even required. Some grounds for termination may allow for termination without notice. Additionally, the agreement may allow termination of some services without terminating the license as a whole. For example, failure to install software bug-fixes might void additional technical support, but allow you to keep using the software.

Software licenses can be complicated affairs. This article only touches on a few issues in license agreements. The American Academy of Dermatology’s recently published model ASP EHR and Server-Based Software License Agreements will give you a sense of what a license agreement may look like, and explain the implications of the contract language. However, even with these tools, it is worthwhile to have an attorney review your license agreement. The AAD’s tools can help make you an “informed and educated customer,” but don’t try to “self-medicate.”

Daniel Shay, J.D., is an associate with Alice G. Gosfield and Associates, P.C., in Philadelphia, a firm that specializes in health care law.

This article originally appeared in the October 2010 issue of Dermatology World.