The Department of Justice (DOJ) recently announced a $155 million settlement agreement with an electronic health records (EHR) vendor, eClinicalWorks (ECW), to settle False Claims Act allegations against the company initially brought by a whistleblower/qui tam relator. The whistleblower was a software technician for the City of New York City who was implementing ECW software in a prison healthcare system. The DOJ subsequently intervened and filed suit. The May 31, 2017 announcement is the first of its kind, holding an EHR vendor accountable for claims made about their certifications.
Provider clients of ECW relied on the assertions made by ECW that their EHR software met the criteria of the Office of the National Coordinator of Health Information Technology (ONC) certification program. Based on ECW’s software and the assertion of EHR certification, providers believed they had achieved “meaningful use” and received incentive payments under the Medicare and Medicaid EHR Incentive Programs.
The government asserted that ECW’s product did not meet the standards for EHR certification. In its complaint, the DOJ contended that ECW falsely obtained certification for their EHR software by concealing material facts from ONC, the certifying agency. As a result, ECW caused providers to submit false claims regarding the provider’s achievement of EHR meaningful use, which lead to wrongful Medicare EHR Incentive Payments to the providers. The government also claimed ECW engaged in marketing arrangements which provided kickbacks to customers to influence referrals from them in violation of the Anti-Kickback Statute.
Three of ECW’s founders are jointly and severally liable for the settlement payment of $154,920,000. A developer will pay $50,000 and two project managers will pay $15,000 as contributors to the False Claims Act allegations against ECW. In addition to the monetary settlement, ECW entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General. Some of ECW’s on-going CIA obligations include the implementation of a corporate compliance program, implementation of a quality assurance program consistent with professionally recognized software practices, the use of an independent software quality oversight organization, and utilization of an independent review organization to conduct arrangements review.
The ECW settlement should serve as a warning bell for other EHR vendors. As demonstrated by the ECW settlement, an EHR vendor can and will be held accountable for assertions made about their government certifications for electronic health records system, and can be subject to the Anti-Kickback Statute for improper marketing and sales practices involving their products. This unprecedented settlement signals to EHR vendors that they may be under increased scrutiny by the government under applicable healthcare fraud and abuse laws. EHR vendors would be wise to audit and evaluate their certification status, and sales and marketing activities to ensure compliance with applicable laws and regulations.
The DOJ’s settlement announcement can be found here.