Department of Justice Continues Enforcement Against Electronic Health Record Vendors

This is not the first, or even the largest, FCA settlement between the DOJ and an EHR vendor.²  In May 2017, the DOJ announced that it had entered into a settlement agreement with EHR vendor eClinicalWorks (ECW), wherein ECW agreed to pay $155 million³  to resolve an FCA qui tam lawsuit with similar allegations, including that ECW misrepresented the capabilities of its software and paid kickbacks to certain customers in exchange for promoting its products. 

As EHR technology continues to become more prevalent among all types of healthcare providers, and those providers continue to rely on the capabilities of their EHR systems when documenting services and submitting claims for reimbursement, FCA investigations and settlements involving EHR vendors are sure to continue.  These recent settlements should serve as a stark reminder to healthcare providers who use EHR technology that blind faith in the capabilities of such systems can be dangerous, and the fact that  a provider utilized advanced EHR technology does not necessarily mean that the provider’s claims are beyond scrutiny.

The ECW Settlement

By most accounts, the 2017 ECW settlement was the first of its kind.  Nearly a decade ago, the United States Department of Health and Human Services (HHS) began to offer healthcare providers incentive payments if the providers adopted certified EHR technology and were able to demonstrate their “meaningful use” of such technology.⁴   In order to obtain meaningful use certification for their product, EHR vendors were required to attest that their product satisfied certain criteria and passed testing by an independent accrediting agency approved by HHS.⁵

In May 2015, Relator Brendan Delaney (a New York City government employee who was in charge of implementing ECW’s EHR system at Rikers Island for prisoner healthcare) commenced an FCA qui tam suit against ECW, alleging various violations of the FCA and AKS.  Two years later, in May 2017, the DOJ filed a complaint in intervention.  Among the allegations contained in the government’s complaint was that ECW falsely obtained meaningful use certification by concealing from the certifying entity that its software did not comply with the requirements for certification.  By way of example, in its complaint in intervention, the government alleged that, in order to pass certification testing without meeting the certification criteria for standardized drug codes, ECW modified its software by “hardcoding” only the drug codes required for testing.  The government alleged that, as a result of this and other deficiencies, ECW caused the submission of false claims for federal incentive payments based on the use of ECW’s software.  In other words, according to the government, ECW knew that its users were going to submit claims for meaningful use incentive payments based on ECW’s representations that its software met the meaningful use criteria, when it did not.

The DOJ also alleged that ECW violated the AKS, in part, through a “referral program,” “site visit program,” and a “reference program.”  ECW’s “referral program” was used to pay current ECW users as much as $500 for each provider they referred who executed a contract with ECW.  The “site visit program” paid current ECW users to host prospective customers at their facility, and made payouts based on the number of users at the prospective customer’s practice.   Through its “reference program,” ECW paid current users as much as $250 to serve as references for prospective customers who wanted to speak with current users about the product.  The government also alleged that ECW provided “consulting” and “speaking” fees to influential users who promoted its software and also provided users with gift cards, meals, iPads, travel, and entertainment, all allegedly in violation of the AKS.

In addition to paying $155 million, ECW entered into a five-year Corporate Integrity Agreement (CIA) as part of the settlement, which requires ECW to retain an Independent Software Quality Oversight Organization to assess ECW’s software quality control systems and provide written semi-annual reports to the OIG and ECW documenting its reviews and recommendations.  ECW is also required to retain an Independent Review Organization (IRO) to review its arrangements with healthcare providers to ensure compliance with the AKS.⁶

The FCA settlement was not the end of ECW’s troubles.  Six months after entering into the settlement, ECW was named as a defendant in a nearly $1 billion class action lawsuit alleging that patients could not trust their medical record’s accuracy due to flaws in the company’s software, including many of the same flaws at issue in the settled FCA case.⁷  Then, in December 2017, ECW was named in a second class action lawsuit filed by healthcare providers who, according to the complaint, “actually relied upon ECW’s statements that its software did and would satisfy the certification criteria of the Meaningful Use program.”⁸  The complaint alleges that ECW caused the plaintiffs and the proposed class “to expend out-of-pocket expenses, time, and other resources to cure or cope with the many deficiencies in ECW’s software.”⁹

The Greenway Settlement

In February 2019, the DOJ filed a complaint for purposes of settlement against Greenway Health.¹⁰  In its complaint, the government alleged that Greenway falsely obtained meaningful use certification for Prime Suite by concealing from the certifying entity that the program did not fully comply with the requirements for certifications.  For example, according to the government, Prime Suite failed to incorporate the standardized clinical terminology necessary to ensure “the reciprocal flow of information concerning patients and the accuracy of electronic prescriptions.”¹¹  According to the government’s press release, “Greeenway accomplished its deception by modifying its test-run software to deceive the company hired to certify Prime Suite into believing that it could use the requisite clinical vocabulary.”¹² Additionally, and similar to the allegations against ECW, the government alleged that Greenway violated the AKS by paying money and incentives to client healthcare providers to recommend Prime Suite to prospective new customers.

Also similar to ECW, in addition to the monetary settlement, Greenway was required to enter into a five-year CIA which requires the retention of an IRO to provide regular assessments of its quality control, compliance systems, and arrangements with healthcare providers, and that Greenway provide the latest versions of Prime Suite to its customers for free or offer free data migration to other software products.

Tip of the Iceberg?

Soon after settling with Greenway, the United States Attorney for Vermont warned that her office would continue to pursue such investigations against other EHR companies.  From the government’s press release:

In the last two years my office has resolved two matters against leading EHR developers where we alleged significant fraudulent conduct.  These are the two largest recoveries in the history of this District and represent the return of over two-hundred and twelve million dollars of fraudulently-obtained taxpayer monies.  These cases are important, not only to prevent theft of taxpayer dollars, but to ensure that the promise of health technology is realized in the form of improved patient safety and efficient healthcare information flow,” said United States Attorney Christina E. Nolan for the District of Vermont.  “This resolution demonstrates my office’s initiative and resolve to vigorously uncover and to doggedly pursue these complex cases.    We will be unflagging in our efforts to preserve the accuracy and reliability of Americans’ health records and guard the public fisc against corporate greed.  EHR companies should consider themselves on notice.

These large settlements, combined with healthcare providers’ ever-increasing reliance on EHR technology, ensures that the government, private whistleblowers, and class action attorneys will continue to look for ways to hold EHR vendors accountable for alleged fraud or deceit.  And although the settlements discussed in this article are limited to the EHR vendors themselves, healthcare providers who utilize EHR technology should be reminded that using such technology does not absolve them of their own potential liability when submitting claims to federal healthcare programs for reimbursement.   

Specifically, although it is unlikely that the government will pursue claims against providers that received inventive payments based on the specific conduct that led to the ECW and Greenway settlements due to the fact that the providers were not in a position to know that the vendors were falsifying their certification records, the fact that a provider utilizes EHR technology does not necessarily insulate it from potential liability for submitting improper claims.  For example, a provider that utilizes EHR technology to automatically select the appropriate CPT code for an encounter should independently verify that the code selected by the software is appropriate before submitting the claim for reimbursement, as it is unlikely that a provider could avoid a costly government investigation by simply blaming the software for any allegedly improper claims. 

1.  https://www.justice.gov/opa/pr/electronic-health-records-vendor-pay-5725-million-settle-false-claims-act-allegations.
2. This follows years of scrutiny by the federal government related to EHR-related issues.  For example, in January 2014 The Department of Health and Human Services’ Office of Inspector General (OIG) released a report entitled “CMS and Its Contractors Have Adopted Few Program Integrity Practices to Address Vulnerabilities in EHRs,”  available at  https://oig.hhs.gov/oei/reports/oei-01-11-00571.pdf.  This report, in part, concluded that the Centers for Medicare & Medicaid Services (CMS) “had provided limited guidance to Medicare contractors on EHR fraud vulnerabilities.” 
3. https://www.justice.gov/opa/pr/electronic-health-records-vendor-pay-155-million-settle-false-claims-act-allegations. 
4. According to CMS, the Medicare and Medicaid EHR Incentive Programs were developed “to encourage eligible professionals and eligible hospitals to adopt, implement, upgrade (AIU), and demonstrate meaningful use of certified electronic health record technology (CEHRT).  As of February 2018, more than 544,000 healthcare providers received payment for participating in the Medicare and Medicaid PI [Promoting Interoperability] Programs.”  https://www.cms.gov/regulations-and-guidance/legislation/ehrincentiveprograms/basics.html.
5. More information on CMS’ CEHRT requirements can be found at  https://www.cms.gov/regulations-and-guidance/legislation/ehrincentiveprograms/certification.html. 
6. In July 2018, the OIG fined ECW over $130,000 for allegedly “failing to report patient safety issues with its EHR to regulators in a specific timeframe,” in violation of its CIA.  See https://www.healthcareitnews.com/news/eclinicalworks-fined-132500-hhs-oig-patient-safety-risk.
7. Tot v. eClinicalWorks, LLC, Case No. 1:17-cv-8938 (S.D.N.Y.).  The complaint can be read at https://ehrintelligence.com/images/site/attachments/class-action-eclinicalworks.pdf.    The plaintiffs voluntarily dismissed the original class action in February 2018, but refiled the case in August 2018,  Case No. 1:18-cv-11658. 
8. Carrollton Family Clinic, LLC vs. eClinicalWorks, LLC, Case No. 1:17-cv-12530 (D. Mass.).  The complaint can be found at https://s3.amazonaws.com/assets.fiercemarkets.net/public/004-Healthcare/external_Q12018/ECW_classactioncomplaint.pdf.  As of March 25, 2019, this action has been stayed pending arbitration. 
9. Id. at Para. 152.
10. Notably, the complaint in Greenway was filed in the District of Vermont, the same district in which the ECW complaint was filed.
11. https://www.justice.gov/opa/pr/electronic-health-records-vendor-pay-5725-million-settle-false-claims-act-allegations.
12. Id.