Congress enacted the American Recovery and Reinvestment Act in
2009. A section of that legislation was the Health Information
Technology for Economic and Clinical Health Act (HITECH Act). The
provisions of the HITECH Act included the Meaningful Use Program
operated by the Centers for Medicare and Medicaid Services and
mandated by the Affordable Care Act. (42 U.S.C. §§ 3002 and 3013
(2010)) Providers are given financial incentives by the Meaningful
Use program to implement electronic health records (EHR). The
incentives can amount "up to $44,000 through the Medicare EHR
Incentive Program and up to $63,750 through the Medicaid EHR
Incentive Program." (Affordable Care Act Implementation and
Information, American Medical Group Association, available at https://www.amga.org/wcm/Advocacy/Issues/aca_issues.aspx).
As providers have begun taking advantage of this cash-for-EHR
system, many have overlooked the terms and implications of the
contractual relationship binding providers and EHR software
In order to understand who owns EHR, one has to start with the
paper records in a traditional doctor's office. The doctor owned
the paper, therefore he owned the record. Let's fast forward to the
transfer of patient records to a digital format. Now who owns the
record? The doctor does not own the paper any more. He or she
generally contracts with a third party to purchase or lease storage
devices or data storage space in the cloud. Further, software isn't
purchased; it is licensed, which can lead to other
One of the first cases to touch upon ownership of electronic
health records is H.M.O. Systems, Inc. v. Choicecare Health
Services, Inc., 665 P.2d 635 (Colo. App. 1983). In 1977,
Choicecare leased computer hardware for 48 months with an option to
buy from H.M.O. Systems and executed a non-expiring software
license for a lump sum with H.M.O. Systems. Unfortunately,
Choicecare declared bankruptcy three years later. H.M.O. Systems
tried to repossess the hardware and terminate the license agreement
with Choicecare. The Colorado Appellate Court ruled that the
hardware lease had intended to create a security interest for
Choicecare and thus was subject to Article 9 of the U.C.C. Since
H.M.O. had already received the payment for the software license,
it could not repossess the software. Because Choicecare had missed
only one lease payment and was in receivership, the court decided
that the hardware could not be repossessed either. The contracts in
this case were treated as traditional contracts between lessees and
lessors. The court was able to sidestep consideration of the
ownership of the patient data stored on the computer system.
Two recent cases have highlighted the problem with treating
ownership of electronic health records through the perspective of a
simple contract dispute. In Milwaukee Health Services, Inc. v.
Business Computer Applications, Inc., Civil Action No.
13-CV-797 (U.S. District Court Eastern District of Wisconsin 2013),
Business Computer Applications, Inc. (BCA) blocked access to all of
Milwaukee Health Services, Inc. (MHSI) patient records in a dispute
over unpaid licensing fees. MHSI applied for preliminary injunction
to gain access to its records. The court denied the injunction
ruling that MHSI did not meet the threshold requirements for an
injunction. The court stated that MHSI could access its patient
records if it " … simply complies with BCA's demands." (U.S. Dist.
Ct. Case No. 13-C-797, Order and Decision on Injunction July 31,
2013). The parties finally reached a settlement in December 2013.
The agreement required MHSI to return all of BCA's software and
associated media and allowed MHSI to transfer patient data to
another EHR system.
A similar case is currently working its way through the Maine
Full Circle Health Care is in a dispute over payments for software
support with CompuGroup. CompuGroup has blocked Full Circle's
access to its patients' electronic health records.
This case brings to the fore the unique issue regarding disputes
over ownership of health records as data being manipulated by an
EHR software system. The patient does not control his own medical
record in an EHR system, and cannot transfer his record without
assistance from the doctor or the software provider. The patient
cannot obtain his medical history from another doctor; the history
is unique and irreplaceable. While the courts interpret EHR
disputes as contract matters, patients are held hostage. They are
not parties to the contracts and do not have standing to seek
recourse or even to transfer their information to another
Another problem area with EHR is software licensing agreements.
In the settlement between BCA and MHSI, MHSI has to return all of
BCA's software and documentation. MHSI must necessarily transfer
its medical records to another EHR system. Who is responsible for
performing that transfer of information? Who is responsible for
confirming the completeness and integrity of the transfer? If there
are errors or omissions in the transfer who is liable? We consider
questions like these in the next section.
When providers contract with EHR software companies to provide
software, they are not purchasing goods as understood in the U.C.C.
Instead providers are purchasing a software license to operate the
system during the duration of a license agreement. This may seem
like an ordinary contract however software-licensing agreements are
In general, licenses are "a grant of rights by an owner of
intellectual property to use, make, have made, or sell the owners'
intellectual property." (O'Brien, Intellectual Property Licensing
Agreements, MA-CLE (2012)). Thus, providers who purchase an EHR
software license are merely gaining the right to use the program
for the duration of the software license agreement. Once that
license expires, or has been violated, providers no longer have the
right to access the software. This inevitably means that providers
who allow EHR software licenses to lapse, or who violate the terms
of the license agreement, will be prevented from accessing their
patients' electronic health records.
As seen above, courts throughout the United States have been
treating the EHR software licensing agreements as a contract for
the sale of goods. The underlying reason for this is that "software
licensings exist in a legislative void." (O'Brien, Intellectual
Property Licensing Agreements, MA-CLE (2012)). Although software
licensing laws have been developed, specifically the Uniform
Computer Information Transaction Act (UCITA), only two states have
adopted the UCITA, Virginia and Maryland.
(http://www.ucitaonline.com). Thus, disputes regarding EHR software
licenses are treated as a standard contractual dispute such as a
dispute regarding the sale of goods.
Although the statutes and regulations, which have "incentivized"
the push for EHR's, are devoid of any guidance regarding EHR
licensing, many industry insiders have begun to suggest good
practices that should be negotiated into every EHR software
The first is the perpetual license. (EHR Contracts: Key Contract
Terms for Users to Understand, https://www.healthit.gov/sites/default/files/ehr_contracting_terms_final_508_compliant.pdf
). A perpetual license would allow providers to have unlimited
access to the EHR software. However, there is one catch, once the
term of the software license agreement is up, the software company
will no longer have to support the provider. Thus, providers will
have access to the information, but will not receive upgrades to
their system or help from the software company in maintaining the
system. Although this may interrupt provider's ability to use the
multitude of features included within EHR software, such as
integrated billing, providers will still be able to maintain access
to their patient's health records without disrupting treatment.
The second important term that should be negotiated in every EHR
software licensing agreement is a wind down period. (EHR Contracts:
Key Contract Terms for Users to Understand, https://www.healthit.gov/sites/default/files/ehr_contracting_terms_final_508_compliant.pdf).
This would require software-licensing companies to allow and assist
providers during a designated a time period to transition off of
the EHR software, before providers are locked out. In keeping with
the purpose of the EHR software programs, this wind-down period
would protect patient's access to health records. If and when
providers are locked out of EHR software, patients are also locked
out from accessing their records.
Until our legislators and regulators devise laws and rules
dealing with EHR software licensing that account for the protection
of patient access to health records, those in the position to
negotiate these licensing agreements must not forget the underlying
purpose of EHR systems. Although doctors are incentivized to use
EHR software, and EHR software companies should be compensated for
their intellectual property, the continuity of patient treatment
and access to records should never be interfered with.
When the health care provider and EHR vendor have a dispute what
happens to the patient? We will write about patient standing