eClinicalWorks pays $155M to settle claims it falsified EHR certification

Massachusetts-based eClinicalWorks has agreed to pay $155 million to resolve claims that it falsely obtained certification for its EHR software.

The settlement, announced by the Department of Justice on Wednesday, represents the first time federal prosecutors have pursued an EHR vendor for falsifying Meaningful Use certification. The DOJ’s complaint includes several alleged failures by eClinicalWorks' EHR software, including an incomplete database of drug codes and drug interaction checks, inaccurate user actions in the system’s audit log and failure to track lab results.

By failing to meet Meaningful Use requirements, the lawsuit alleged eClinicalWorks knowingly caused providers to submit fraudulent claims seeking EHR incentive payments. Last year, the OIG indicated it would conduct a close review of Medicare EHR incentive payments to providers.

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Federal prosecutors also alleged that eClinicalWorks violated the Anti-Kickback Statute by paying users as much as $500 through its referral program for each provider that switched to the company’s EHR platform. Between 2011 and 2015, the company made more than $143,000 in referral payments, which accounted for as much as 4.6% of new customers.

The lawsuit was originally filed in Vermont by whistleblower Brendan Delaney, a New York City government employee that was implementing the EHR software at Rikers Island. The Department of Justice later intervened in the case. Delaney will receive $30 million.

“This is a ground-breaking case,” said Colette G. Matzzie, a partner at Phillips & Cohen, the firm that represented Delaney, in a statement. “It is the first time that the government has held an electronic health records vendor accountable for failing to meet federal standards designed to ensure patient safety and quality patient care.”

Acting U.S. Attorney Eugenia A.P. Cowles for the District of Vermont said it was the largest False Claims Act recovery in the state’s history, and possibly the largest financial recovery as well. 

“This resolution demonstrates that EHR companies will not succeed in flouting the certification requirements,” she said in a release.

A statement released by eClinicalWorks denied any wrongdoing, adding that the company elected to settle to avoid a drawn-out legal battle. The company also noted that it had discontinued its customer referral program, adding that such programs are “common in the industry.”

“Today’s settlement recognizes that we have addressed the issues raised, and have taken significant measures to promote compliance and transparency,” said Girish Navani, CEO and co-founder of eClinicalWorks.