In its May 28th Advisory Opinion, the Centers for Medicare & Medicaid Services (CMS) found that a hospital system’s proposal to pay for customized software to facilitate communication between its electronic health record (EHR) system and EHR software used by physicians affiliated with the hospital would not constitute a prohibited compensation arrangement under the Stark Law.  CMS explained that since the software would be used solely to order or communicate results of tests and procedures furnished by the hospital, the arrangement would not be a prohibitive arrangement.  CMS also emphasized the relevance of the fact that the software could not be modified to perform an alternate function and could not be resold, transferred or assigned by an affiliated physician practice.  Since CMS found that the arrangement fell outside of the Stark Law’s prohibition with respect to a "compensation arrangement," it did not address whether the arrangement complies with any of the physician self-referral exceptions, including the 2006 EHR Exception for arrangements involving donated EHR technology.