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False Claims Lawsuit with EHR Vendor Settles for $155 Million, Requires Customer Upgrades or Data Transfer

In May 2017, eClinicalWorks, one of the largest vendors of electronic health records (EHR) software, promised to pay $155 million and enter a corporate integrity agreement with the OIG. The settlement resolves allegations that eClinicalWorks violated the federal False Claims Act when it made false statements that its EHR software was compliant with requirements for certification and payment under the Meaningful Use program and misrepresented the capabilities of its software. The company was also accused of paying providers to recommend its products to prospective providers in violation of the Anti-Kickback Statute.

In its complaint, the Justice Department alleged that eClinicalWorks modified its software to pass the testing for required certification, but failed to design the software to meet the daily operational requirements of the Meaningful Use program. The federal government provides incentive payments to certain health care providers that demonstrate “meaningful use” of EHR technology. Psychiatrists and psychiatric nurse practitioners are among the health care providers eligible to participate in the Meaningful Use program.

The Justice Department further contended that eClinicalWorks was aware that it did not meet the certification standards but nonetheless made representations to its customers of its compliance. According to the complaint, eClinicalWorks’ conduct led providers to unknowingly submit claims falsely attesting that they satisfied Meaningful Use requirements by using eClinicalWorks’ certified EHR technology, thus resulting in incentive payments based on false information. With regard to patient safety, the Justice Department also alleged that eClinicalWorks’ software failed to satisfy data portability requirements, reliably record diagnostic imaging orders and accurately perform drug interaction checks.

As part of the settlement, eClinicalWorks must notify existing customers within 60 days of the corporate integrity agreement of two options regarding their current EHR:

  1. Upgrade Option: Allows customers to upgrade to the latest version of the EHR software and the latest version of any drug database at no additional cost, including fees for implementation, installation or training services associated with the upgrade.
  2. Data Transfer Option: Permits customers to transfer their data to a new EHR software vendor in a commercially reasonable manner without penalties or service charges, including termination fees. eClinicalWorks must provide a reasonable level of assistance or instruction to aid in the transition. Choosing to elect for an upgrade option does not preclude customers from also later choosing this option.

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