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End-user license agreements: What you need to know


When you implement an electronic health record system in your practice, you first must sign an end-user license agreement, or EULA. Written to protect vendors, EULAs can vary widely in wording and structure. Here's what you can do to protect your interests.

  • An end-user license agreement (EULA) legally binds a practice and a vendor to specific actions for a particular period of time.
  • The vendor and your practice are under no obligation until you both sign the agreement.
  • A properly written EULA protects your practice and ensures the smooth installation and ongoing support of your electronic health record system.

When you an implement an electronic health record (EHR) system in your practice, you first must sign an end-user license agreement (EULA) with the EHR vendor. EULAs basically are written to protect the vendors, and they can vary wildly in their wording and structures.

A EULA (pronounced "YULE-la") details your and your vendor's responsibilities relating to the installation of the EHR in your practice, the training of your staff, and the ongoing software and hardware support.

It is imperative, therefore, that you fully understand what a EULA is, why you're signing it, how you are legally bound by it, and what you must ensure gets included in the EULA, before signing it, to protect your practice and your personal assets.


"Never sign a contract without having it reviewed by professionals who understand technology contracts," says Jerome H. Carter, MD, chief executive officer of EHR consulting firm NTM Informatics Inc. Carter edited the second edition of Electronic Health Records, published by the American College of Physicians, and writes the healthcare technology blog

"Get every promise in writing, in detail," he says.

EULAs come in all shapes and sizes. Some are simple one-sheet documents written in plain language. Others are multi-page tomes scribed in complex legalese. Vendors that sell hardware/software-based client/server EHR systems might require primary care physicians (PCPs) sign paper EULAs just once before installation. Vendors of other types of EHRs-software as a service or cloud-based, for example-might incorporate electronic EULAs into their EHRs' login screens, thus securing an electronic signature from each end-user whenever he or she signs in, as well as tracking who's accessing the system.

Regardless of which type of EULA you sign, the end result is pretty much the same: a legal document that clearly and concisely binds you, your staff, and your EHR vendor to specific actions for a specified period of time.


"The EULA is the devil in the details," says Jon Bertman, MD, FAAFP, a practicing family physician in Rhode Island who created his own EHR in the late 1990s. Today, Amazing Charts is installed in more than 5,000 practices nationwide.

One-third of all EHR installations reportedly do not succeed. Therefore, Bertman says, ensuring that physicians do not get locked into contracts with poorly performing EHRs is, in his opinion, the most important aspect of the EULA.

"Physicians [sign contracts] at their own peril," he says. "Because buried deep within a number of EHR EULAs are clauses requiring a minimum contract term, non-disclosure clauses preventing an unhappy customer from badmouthing the vendor, and even [prohibiting] the right to sell or give practice data to third-party companies."

To ensure you don't "get caught in a contract you can't extricate yourself from without exacting a hefty fee," Bertman recommends you:
• Check out the EULA before allowing a sales representative to demonstrate how he or she thinks you should document your office notes,
• Be sure the EULA seems reasonable to you. If it doesn't, there's likely a reason.
• Read the EULA (painful as it may be), and ask the vendor to summarize the key take-home points (and document the exchange), just to be sure you have the same understanding.


You'll have to make many critical decisions before signing a EULA. To help you make them, you'll want to ask questions such as:
• Who owns the data?
• What if I want to change EHRs?
• How do I move my data from one EHR to another?
• What if the EHR vendor goes out of business?
• How do I get the interfaces that I need?
• What if I need additional third-party components for the EHR?
• When can my attorney review the contract?
• What if a disaster occurs and my EHR is destroyed?
• Can I terminate my contract early?
• How do I retrieve my patients' data?

Many PCPs today operate their practices on extremely tight budgets. You can't afford to make costly technologic errors. Local disasters, business failures, inadequate software upgrades-such issues can necessitate that you abandon one EHR and install a new one in your practice. If that happens, you'll have to migrate your patients' data from one platform to another. This process can go smoothly, or it can be a nightmare, depending on the technology you're using and the contract agreements in place with your vendor before the data migration.

"Terminating a contract can be an unpleasant experience," Carter says. "It can be even more so if proper care has not been taken to ensure smooth data migration to another system.

"Be sure that the software agreement assigns data ownership to the practice. If the agreement doesn't mention data ownership, have a clause added that makes ownership explicit," he adds.

The software agreement should include methods by which data can be migrated if the contact is terminated, Carter says, and should avoid clauses that levy penalties on the practice if it terminates services or licenses.

"Be sure that the agreement allows for termination for poor product performance. State acceptable metrics clearly," he says.

Rosemarie Nelson agrees. She is a Medical Group Management Association healthcare consultant as well as a Medical Economics editorial consultant. She says EULAs often place the burden of risk for the system's failure on the end-user physicians, Also, Nelson adds, "acceptance and warranty provisions" should be tied to "performance standards" that are stipulated in the vendor's response to a request for proposal before the EULA is developed.

"Among other things, the vendor should warrant that the system will operate in an integrated fashion according to the agreed system specifications," Nelson says. "In addition to termination rights, include meaningful intermediate remedies (typically credits against future payments) for performance problems, delays, and other issues. And pay careful attention to 'limitation' provisions, which may undercut warranty and remedy provisions."

For example, specifying the vendor's guaranteed "system uptime" is a critical element to have in writing in the EULA, as well as what steps the vendor agrees to take in the event of prolonged downtime, including any adjustments or delays in future payments.

End-user license agreement best practices


Another critical element to stipulate in the EULA is how laboratory interfaces, among others, will be developed, installed, and repaired should they break down and cease to function.

"Laboratory interfaces that do not work as promised can be a source of trouble," Carter says. "Tie payment for interfaces to installation and performance. Never pay the full amount until they are working correctly".

Remember, you are under no obligation until both parties sign the EULA. Once it's signed, however, it's too late to negotiate your contract. A properly written EULA protects your practice and ensures the smooth installation and ongoing support of your EHR.

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