Konica Minolta agreed to pay $500,000 to settle a whistleblower case involving its former health IT subsidiary Viztek.
The complaint from the Department of Justice (DOJ) alleged that Viztek violated the False Claims Act by cheating on certification tests for its electronic health record (EHR) system. The company falsely represented that its EHR met the criteria for certification, which would allow it to receive incentive payments through the Electronic Health Record Incentive Program.
This resulted in providers filing false claims for incentive payments with the Medicare program, according to the DOJ in a press release.
Konica Minolta acquired North Carolina-based Viztek in October 2015.
Two years later, a former Viztek employee filed a whistleblower case against the company, which was filed under seal in the federal district court in New Jersey. The complaint (PDF) was unsealed Thursday with the settlement agreement.
The DOJ joined the qui tam lawsuit.
The complaint from the former employee, who was an EHR product manager at the time, alleges that the flaws in Viztek's EHR software not only rendered the system unreliable and unable to meet meaningful use standards but also created a risk to patient health and safety.
RELATED: Allscripts reports $145M settlement agreement with DOJ
"Rather than spend the time and resources necessary to correct the flaws in its EHR software, the company opted to do nothing," the former employer alleged in the complaint.
As certification testing began on Viztek's EHR, the company's deal with Konica Minolta to be acquired was nearing completion, and failure to certify Viztek’s flagship EHR product was not an option, the whistleblower alleged in the complaint.
The whistleblower alleges that the company's CEO said: "I don’t care if you have to lie, beg, cheat, steal, or kill" in order to get the software certified.
The executive indicated that if certification was not complete by February 2016, the company could lose millions of dollars.
Viztek opted to do remote testing via computer conference and screen-share, which allowed a better opportunity to manipulate the certification testing using a hard-coded product version that was never released, the complaint alleged.
As an example, certified EHR software must enable users to electronically reconcile data that represent a patient’s active medication, problem and medication allergy list. To create the appearance that the software could function as required, Viztek developers manually created a screen appearing to show the required sets of data. Prior to the test, developers preloaded the screen in a separate tab on the testing computer and then switched to the rigged screen at the appropriate time, the complaint stated.
The software failed testing at several points, and the company's executives would request breaks, during which time the developers would manually adjust the software to make it appear to perform the required functions, according to the allegations in the complaint.
RELATED: ResMed to pay more than $37.5M to settle kickback allegations made in 5 whistleblower lawsuits
During testing, the developers also accidentally displayed live patient data.
The complaint also mentions EHR certification company InfoGard, which performed the testing for Viztek's EHR software.
The whistleblower and the DOJ allege that InfoGard "facilitated and participated" in Viztek's false attestations by certifying the product even as its tester noted obvious manipulation.
Underwriters Laboratories' subsidiary UL acquired InfoGard in December 2015.
In a statement, Konica Minolta Healthcare Americas said the allegations emanated from a time prior to its acquisition of Viztek.
"The company cooperated fully with the government’s investigation and maintains that the allegations are unfounded. Given the high costs and future time demands associated with the investigation, this resolution is in the best interest of the business," the company said.
Phillips & Cohen represented the whistleblower in the case.
"Our client was concerned about possible patient harm that can occur if EHR software isn’t properly certified, so she stepped forward to inform the government about what she had witnessed,” said Colette Matzzie, a partner and whistleblower attorney with Phillips & Cohen representing the former employee, in a statement.