The federal government has offered substantial incentives to providers to adopt and use certified electronic health record (EHR) technology. As of October 2018, the federal government had paid over $38 billion in EHR incentive payments through the Promoting Interoperability Program (formerly, the Meaningful Use Program). Other federal health care program policies also encourage use of certified EHR technology through enhanced payments or avoidance of decreased reimbursement. These EHR-related payment policies, however, have triggered increased oversight and enforcement attention on EHR vendors who have allegedly misrepresented the capabilities of their EHR software and allegedly paid kickbacks to customers.

In 2017, DOJ announced a settlement with eClinicalWorks (eCW), an EHR vendor, to resolve an FCA lawsuit originally brought as a qui tam action by a whistleblower. DOJ’s complaint-in-intervention alleged that eCW made material false statements and concealed material facts about the capabilities of its software in connection with the government’s EHR certification process.[1] It also alleged that eCW paid purported kickbacks in connection with certain marketing arrangements (i.e., a referral program, site visit program, and a reference program) with influential customers to induce them to recommend eCW’s EHR software, in violation of the federal Anti-Kickback Statute (AKS).[2]

As part of the settlement, eCW agreed to pay $155 million and to enter into a novel, five-year Corporate Integrity Agreement (CIA) with the HHS OIG. Among other things, the CIA required eCW to engage an independent Software Quality Oversight Organization to assess eCW’s software quality control systems and to regularly report to OIG and eCW on its reviews and recommendations. Further, the CIA required eCW to offer free upgrades and data transfers to its current customers. This was a ground-breaking settlement that raised the question of whether this was the beginning of government and whistleblower attention on (and FCA actions against) EHR vendors. This question was seemingly answered in the affirmative when DOJ announced a second settlement with an EHR vendor in early 2019.

On February 6, 2019, EHR vendor Greenway Health LLC (Greenway) entered into a similar settlement to resolve an FCA case filed by the US Attorney’s Office in Vermont. Interestingly, a whistleblower did not initiate the Greenway case. Rather, DOJ pursued it directly. Like eCW, Greenway faced allegations that its EHR system did not function in the way it represented it during the certification process.[3] One specific allegation was that Greenway provided some customers whose EHR software was improperly calculating certain meaningful use measures (which providers are required to achieve to be eligible for incentive payments) with incorrect calculations in order to enable them to receive incentive payments.[4] According to DOJ, this allegedly caused some Greenway customers to submit false claims to HHS for payment under the Promoting Interoperability Program.

Like in the eCW case, the government complaint against Greenway also alleged that certain payments from Greenway to its customers pursuant to certain reference, referral, and site visit programs violated the AKS.[5] Additionally, the government accused Greenway of giving its favored customers extravagant gifts, including “iPads, meals, travel, tickets to sporting events and entertainment, all for the purpose of inducing these users to either continue using Greenway’s products or recommend Greenway to other health care providers . . . .”[6] To resolve these allegations, Greenway agreed to pay $57.25 million, and to enter into an eCW-like CIA.

Practice Note: While many questions remain, including whether a court would agree with DOJ that the AKS applies to these situations, we expect to see continued government and relator scrutiny of EHR vendors. In light of this continued focus, EHR vendors should ensure that they: (1) take care to accurately and transparently demonstrate their software during HIT certification program testing; (2) review, and consider improvements to, their systems and other procedures for identifying, responding to and correcting software design and quality issues that call into question EHR software’s conformity to applicable EHR certification criteria or present patient safety or clinician usability risks; and (3) review existing customer reference, referral and marketing arrangements for compliance with the Anti-Kickback Statute. If an EHR vendor receives investigative requests from the federal government, it should engage outside counsel.

This blog post was originally published in McDermott’s Health Care Enforcement Quarterly Roundup | Q1 2019. Click here to view the full report. 

[1] United States , ex rel. Brendan Delaney v. eClinicalWorks, LLC, Complaint in Intervetion, 2:15-CV-00095, D. Vermont (May 12, 2017).
[2] Id. ¶¶79-85.
[3] Id.
[4] United States v. Greenway Health, LLC, Complaint, 2:19-CV-00020 at ¶¶ 76-112, D. Vermont (February 6, 2019).
[5] Id. ¶¶113-125.
[6] Id. ¶¶ 126-27.

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Photo of James A. Cannatti III James A. Cannatti III

James A. Cannatti III* practices at the intersection of today’s most pertinent health care issues, including digital health, health IT policy, and fraud and abuse, including Anti-Kickback Statute/Stark Law matters. With more than 10 years of experience in the US Department of Health & Human Services’ (HHS) Office of Inspector General (OIG), most recently as Senior Counselor for Health Information Technology, James is well-attuned to the regulatory issues impacting the rapidly evolving digital health landscape. Read James A. Cannatti III’s full bio. 
*Not admitted to practice in the District of Columbia; admitted only in Ohio. Supervised by principals of the Firm who are members of the District of Columbia Bar.

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Amandeep (Aman) S. Sidhu focuses his practice on complex commercial disputes with an emphasis on regulated industries, including health care-related investigations and litigation. He represents hospitals and health care companies in investigations and defense of qui tam whistleblower litigation involving federal False Claims Act (FCA), Stark Laws and Anti-Kickback Statute in federal district courts throughout the United States. Aman regularly supports settlement negotiations with the US Department of Justice for clients in multiple jurisdictions, including negotiation of corporate integrity agreements with the US Department of Health and Human Services Office of Inspector General. Aman also represents health care and life sciences companies in the navigation of state and federal investigations, including responding to congressional inquiries. Aman serves on the Firm’s Diversity/Inclusion Committee, Pro Bono and Community Service Committee and Associate Development Committee. Read Amandeep Sidhu’s full bio.

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Sophia A. Luby focuses her practice on complex civil litigation. Read Sophia Luby’s full bio.

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Theodore (Ted) Alexander focuses his practice on general litigation matters. He has experience in Americans with Disabilities Act (ADA) and white-collar cases. Ted also advises clients on federal health policy. Read Theodore Alexander’s full bio.