Major EHR Technology Settlements Signal More Investigations on the Horizon

February 14, 2019 Advisory

A District of Vermont U.S. Attorney announced this past week that a Florida-based electronic health records (EHR) technology vendor – Greenway Health – has agreed to pay a $57 million settlement relating to alleged false claims under the Federal Electronic Health Record Incentives Program. This and other large, related settlements could lead to aggressive actions by the United States Department of Justice (DOJ) in seeking penalties against companies that utilize deficient EHR software.

U.S. Attorney Christina E. Nolan pointed out in a Feb. 6, 2019, press release that this was the second settlement her office had reached in the past two years with “leading EHR developers” involving “significant fraudulent conduct.” The first of the two settlements was in May 2017, with Massachusetts-based eClinicalWorks. The two settlements together totaled over $212 million and both companies entered into five-year corporate integrity agreements with the U.S. Department of Health and Human Services’ (DHHS) Office of Inspector General. The first of the two settlements led to the whistleblower plaintiff receiving $30 million.

In both cases, the DOJ alleged that the EHR vendors had caused those who had purchased their EHR technology to submit false claims to the government by misrepresenting the capabilities of their EHR technology and thus enabling users to wrongly receive incentive payments under the EHR Incentive Program of the Federal American Recovery and Reinvestment Act of 2009 (ARRA).

The EHR Incentive Program of ARRA allocated $19 billion in incentive payments to encourage health care providers to adopt and “meaningfully use” EHR technology. In order for health care practitioners to qualify for such incentive payments, they have to be using a certified EHR system and meet certain other requirements concerning their use of the technology. To obtain certification, software vendors must provide documentation and evidence to government-authorized testing laboratories and certification bodies demonstrating that their platforms meet the government’s established standards.

Prosecutors alleged that Greenway and eClinicalWorks had provided bogus information to certification entities and had knowingly concealed shortcomings, which posed a risk to the accuracy and reliability of the information being recorded and transmitted.

Why the investigations matter
Why should this settlement matter to other EHR developers – or to anyone else? First, the sheer size of the settlement is likely to lead U.S. Attorneys in other jurisdictions to conduct similar investigations – if they aren’t already in progress – and may also attract other potential whistleblowers.

EHR developers and their investors should also be aware that settlement agreements and corporate integrity agreements with the government aren’t the only potential adverse effect of a government investigation. According to a FierceHealthcare report from Jan. 25, 2018, the DOJ (Vermont again) began an investigation of another EHR company, Practice Fusion, during negotiations to sell the company to Allscripts. Reportedly, Allscripts was willing to pay up to $250 million for Practice Fusion. Following news of the eClinicalWorks settlement and the DOJ inquiry, the purchase price dropped to $100 million.

These investigations also have relevance to the broader health care industry. The investigations to-date have not led to civil or criminal charges against the health care professionals who acquired the software in question, even though the DOJ alleged that Greenway had provided “unlawful remuneration” to “influential customers” to induce them to recommend Greenway. As always, organizations and individuals participating in federal or state health care programs should be alert to any offers or benefits that could be interpreted as remuneration for referrals.

Organizations and individuals receiving meaningful use incentive payments should also be alert to the possibility that the DOJ might become more aggressive in questioning buyers of EHR technology as to whether they were diligent in reviewing the functionality of the products purchased.

The Centers for Medicare & Medicaid Services is performing ongoing audits to determine compliance with the meaningful use incentive requirements. We recommend that organizations and individuals who have received meaningful use incentive payments consult with experienced legal counsel regarding retention of records and response to any records requests.

The investigations also demonstrate the importance of having knowledgeable professionals involved in the review of software purchase agreements for potential risk and possible alternatives, as well as the negotiation of EHR software acquisitions.

Contact Us
  • Worldwide
  • Boston, MA
  • Chicago, IL
  • Denver, CO
  • Dublin, Ireland
  • Edwardsville, IL
  • Jefferson City, MO
  • Kansas City, MO
  • Las Vegas, NV
  • London, England
  • Miami, FL
  • New York, NY
  • Orange County, CA
  • Philadelphia, PA
  • Princeton, NJ
  • Salt Lake City, UT
  • St. Louis, MO
  • Washington, D.C.
  • Wilmington, DE
abstract image of world map
Boston, MA
800 Boylston St.
30th Floor
Boston, MA 02199
Google Maps
Boston, Massachusetts
Chicago, IL
100 North Riverside Plaza
Suite 1500
Chicago, IL 60606-1520
Google Maps
Chicago, Illinois
Denver, CO
4643 S. Ulster St.
Suite 800
Denver, CO 80237
Google Maps
Denver, Colorado
Dublin, Ireland
Fitzwilliam Hall, Fitzwilliam Place
Dublin 2, Ireland
Google Maps
Edwardsville, IL
115 N. Second St.
Edwardsville, IL 62025
Google Maps
Edwardsville, Illinois
Jefferson City, MO
101 E. High St.
First Floor
Jefferson City, MO 65101
Google Maps
Jefferson City, Missouri
Kansas City, MO
2345 Grand Blvd.
Suite 1500
Kansas City, MO 64108
Google Maps
Kansas City, Missouri
Las Vegas, NV
7160 Rafael Rivera Way
Suite 320
Las Vegas, NV 89113
Google Maps
Las Vegas, Nevada
London, England
Royal College of Surgeons of England
38-43 Lincoln’s Inn Fields
London, WC2A 3PE
Google Maps
Miami, FL
355 Alhambra Circle
Suite 1200
Coral Gables, FL 33134
Google Maps
Photo of Miami, Florida
New York, NY
7 Times Square, 44th Floor
New York, NY 10036
Google Maps
New York City skyline
Orange County, CA
19800 MacArthur Boulevard
Suite 300
Irvine, CA 92612
Google Maps
Philadelphia, PA
2005 Market Street
29th Floor, One Commerce Square
Philadelphia, PA 19103
Google Maps
Philadelphia, Pennsylvania
Princeton, NJ
100 Overlook Center
Second Floor
Princeton, NJ 08540
Google Maps
Princeton, New Jersey
Salt Lake City, UT
222 South Main St.
Suite 1830
Salt Lake City, UT 84101
Google Maps
Salt Lake City, Utah
St. Louis, MO
7700 Forsyth Blvd.
Suite 1800
St. Louis, MO 63105
Google Maps
St. Louis, Missouri
Washington, D.C.
1717 Pennsylvania Avenue NW
Suite 400
Washington, DC 20006
Google Maps
Photo of Washington, D.C. with the Capitol in the foreground and Washington Monument in the background.
Wilmington, DE
1007 North Market Street
Wilmington, DE 19801
Google Maps
Wilmington, Delaware