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eClinicalWorks pays $155 million to settle False Claims Act allegations

June 15th, 2017 | No Comments

On May 31, the Department of Justice announced that a large electronic health care records provider, eClinicalWorks, had agreed to pay $155 million to settle civil allegations, originally brought by a whistleblower, that the company misrepresented its software’s capabilities. According to DOJ’s press release:

One of the nation’s largest vendors of electronic health records software, eClinicalWorks (ECW), and certain of its employees will pay a total of $155 million to resolve a False Claims Act lawsuit alleging that ECW misrepresented the capabilities of its software, the Justice Department announced. The settlement also resolves allegations that ECW paid kickbacks to certain customers in exchange for promoting its product. ECW is headquartered in Westborough, Massachusetts.

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The American Recovery and Reinvestment Act of 2009 established the Electronic Health Records (EHR) Incentive Program to encourage healthcare providers to adopt and demonstrate their “meaningful use” of EHR technology. Under the program, the U.S. Department of Health and Human Services (HHS) offers incentive payments to healthcare providers that adopt certified EHR technology and meet certain requirements relating to their use of the technology. To obtain certification for their product, companies that develop and market EHR software must attest that their product satisfies applicable HHS-adopted criteria and pass testing by an accredited independent certifying entity approved by HHS.

In its complaint-in-intervention, the government contends that ECW falsely obtained that certification for its EHR software when it concealed from its certifying entity that its software did not comply with the requirements for certification. For example, in order to pass certification testing without meeting the certification criteria for standardized drug codes, the company modified its software by “hardcoding” only the drug codes required for testing. In other words, rather than programming the capability to retrieve any drug code from a complete database, ECW simply typed the 16 codes necessary for certification testing directly into its software. ECW’s software also did not accurately record user actions in an audit log and in certain situations did not reliably record diagnostic imaging orders or perform drug interaction checks. In addition, ECW’s software failed to satisfy data portability requirements intended to permit healthcare providers to transfer patient data from ECW’s software to the software of other vendors. As a result of these and other deficiencies in its software, ECW caused the submission of false claims for federal incentive payments based on the use of ECW’s software.

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Under the terms of the settlement agreements, ECW and three of its founders (Chief Executive Officer Girish Navani, Chief Medical Officer Rajesh Dharampuriya, M.D., and Chief Operating Officer Mahesh Navani) are jointly and severally liable for the payment of $154.92 million to the United States. Separately, Developer Jagan Vaithilingam will pay $50,000, and Project Managers Bryan Sequeira, and Robert Lynes will each pay $15,000.

As part of the settlement, ECW entered into a Corporate Integrity Agreement (CIA) with the HHS Office of Inspector General (HHS-OIG) covering the company’s EHR software. This innovative five-year CIA requires, among other things, that ECW retain an Independent Software Quality Oversight Organization to assess ECW’s software quality control systems and provide written semi-annual reports to OIG and ECW documenting its reviews and recommendations. ECW must provide prompt notice to its customers of any safety related issues and maintain on its customer portal a comprehensive list of such issues and any steps users should take to mitigate potential patient safety risks. The CIA also requires ECW to allow customers to obtain updated versions of their software free of charge and to give customers the option to have ECW transfer their data to another EHR software provider without penalties or service charges. ECW must also retain an Independent Review Organization to review ECW’s arrangements with health care providers to ensure compliance with the Anti-Kickback Statute.

The Government announced that the whistleblower, a former employee of the New York City Division of Health Care Access and Improvement, will receive $30 million (a 19.3% relator’s share).

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