eClinicalWorks to Pay $155M to Settle Down False Claims Act Allegations

eClinicalWorks (ECW), Massachusetts-based electronic health records (EHR) vendor, and several of its workers will pay almost $155 million to settle allegations that it breached federal law by misrepresenting its software’s capabilities and paying kickbacks to customers. The U.S. Department of Justice (DOJ) declared the settlement with ECW, one of the greatest EHR vendors in the U.S., on the day of May 31.

The settlement resolute a lawsuit brought by a whistleblower under the False Claims Act, as well as blames that ECW paid kickbacks to clients in exchange for promoting its product. The whistleblower will personally get over $30 million out of the settlement.
Under the EHRs or Electronic Health Records Incentive Program to boost healthcare providers to adopt and demonstrate “meaningful use” of EHR certified technology, the U.S. Department of Health and Human Services (HHS) provides incentive payments to healthcare providers that adopt EHRs and meet few requirements regarding their use. EHR vendors gain certification for their products by attesting that the products satisfy particular criteria adopted by HHS and pass testing by an HHS-approved certifying organization.
The complaint-in-intervention of HHS alleged that “ECW falsely gained certification for its EHR software when it concealed from its certifying entity that its software didn’t comply with the requirements for certification. For instance, in case to pass certification testing without meeting the certification criteria for standardized drug codes, the company modified its software by “hardcoding” merely the drug codes needed for testing. In other word, instead of programming the capability to retrieve any drug code from a complete database, ECW generally typed the 16 codes essential for certification testing straightly into its software. The software of ECW also didn’t accurately record user actions in an audit log and in certain situations didn’t reliably record diagnostic imaging orders or perform drug interaction checks.”
By misrepresenting the capabilities of its software, ECW caused providers to submit false “meaningful use” incentive payment claims, making the False Claims Act applicable. Furthermore, ECW allegedly paid customers up to $500 each to suggest its software to potential customers, which violated the federal Anti-Kickback Statute.
In such settlement, ECW and 3 of its founders will be jointly and severally liable for the payment of $154.92 million to the federal government and 3 other company workers will pay a total of $80,000. ECW also stepped into a 5-year Corporate Integrity Agreement enforcing several ongoing obligations regarding to the marketing, quality control, and capabilities of its EHR software.