American Osteopathic Association

Advancing the distinctive philosophy and practice of osteopathic medicine

Negotiating EMR Contracts

​For several years, electronic medical records (EMRs) have been touted as the way of the future, an inevitable next step in how physician practices function, and a necessity for forward-thinking medical practitioners. In recent years, the federal government has worked to incentivize the adoption of EMRs, including amending federal fraud and abuse regulations to permit donations of EMR software, creating the “Meaningful Use” system, and the E-prescribing and Physician Quality Reporting System (PQRS) programs.

Adoption of EMR technology, however, has remained slow, largely due to high up-front costs — a problem which the fraud and abuse regulation revisions and Meaningful Use are intended to alleviate. As more physician practices move to take advantage of such opportunities, they face the potentially daunting task of negotiating a license agreement. This article provides basic information on several types of clauses that appear in EMR software license agreements, what they mean, why they matter, and what you should keep in mind when reading them.  

Term and Termination Clauses

These sections typically describe how long the contract will last, and what events will trigger its conclusion.  While there may be a dedicated termination section, additional grounds for termination may be scattered through the software license agreement (or the “license” or “agreement”) as well, so read through the license carefully.

Maintenance, Support, and Patches

Ongoing support for your EMR is fundamental.  If something goes wrong with the software, you need it back up and running as quickly as possible.  Towards this end, the agreement should address maintenance and technical support.

Downstreamed Licenses

One potential quirk in purchasing an EMR is the nature of “downstreamed” software: where the person who provides you with the software is not necessarily the person who made the software or will provide all of the services associated with it. 

Exhibits, Addenda, and External Documents

Many agreements include exhibits to the main document.  This may be anything from a simple list to an entirely separate additional agreement. 

Using a Lawyer and the Negotiation Process

License agreements are doubly complicated in that they contain both legalese and “technobabble” with which you may not be familiar and may not care to learn. Using a lawyer can help in this regard. 

The information in this section was authored by Daniel F. Shay, an attorney with Alice G. Gosfield and Associates, P.C. His practice is restricted to health law and health care regulation focusing primarily on physician representation, fraud and abuse compliance, Medicare Part B reimbursement, and HIPAA compliance in the physician context. Mr. Shay is a member of the Pennsylvania Bar and the American Health Lawyers Association.