Massachusetts-based electronic health records (EHR) vendor
eClinicalWorks (ECW) and several of its employees will pay nearly
$155 million to settle allegations that it violated federal law by
misrepresenting its software's capabilities and paying
kickbacks to customers. The U.S. Department of Justice (DOJ) announced the settlement with ECW, one of
the largest ECR vendors in the U.S., on May 31.
The settlement resolves a lawsuit brought by a whistleblower under the
False Claims Act, as well as allegations that ECW paid kickbacks to
customers in exchange for promoting its product. The whistleblower
will personally receive about $30 million out of the
settlement.
Under the Electronic Health Records Incentive Program to encourage
healthcare providers to adopt and demonstrate "meaningful
use" of EHR certified technology, the U.S. Department of
Health and Human Services (HHS) offers incentive payments to
healthcare providers that adopt EHRs and meet certain requirements
regarding their use. EHR vendors obtain certification for their
products by attesting that the products satisfy specific criteria
adopted by HHS and pass testing by an HHS-approved certifying
entity.
HHS's complaint-in-intervention alleged that "ECW falsely
obtained 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."
By misrepresenting its software's capabilities, ECW caused
providers to submit false "meaningful use" incentive
payment claims, making the False Claims Act applicable. In
addition, ECW allegedly paid customers up to $500 each to recommend
its software to potential customers, which violated the federal
Anti-Kickback Statute.
In the settlement, ECW and three of its founders will be jointly
and severally liable for the payment of $154.92 million to the
federal government and three other company employees will pay a
total of $80,000. ECW also entered into a five-year Corporate Integrity Agreement imposing
numerous ongoing obligations regarding to the quality control,
marketing, and capabilities of its EHR software.
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