eClinicalWorks will pay $155 million for misleading users

Electronic health records vendor eClinicalWorks and some of its employees will pay $155 million for allegedly violating federal law by misrepresenting what its software could do and for allegedly paying customers to promote the software.

The federal government alleged that the Westborough, Mass.-based company's software could not pass meaningful use requirements, but hid the issues in order to receive certification for the electronic health records incentive program, violating the False Claims Act and Anti-Kickback Statute.

Under the meaningful use program, healthcare providers get incentives from HHS for using certified EHR software. In turn, EHR vendors must get their software certified by independent organizations that verify that their products meet HHS criteria.

Since eClinicalWorks' software couldn't meet the requirements, providers that used the vendor's products ended up submitting false claims for federal incentive payments, the government said in its complaint.

In order to score certification, EHR software must be able to pull any drug code from a database of standardized drug codes. To get around that, eClinicalWorks hard-coded into its software with only the 16 drug codes that were needed to pass the certification test. The company also failed to properly record user actions in a log, among other problems, according to the U.S. Department of Justice.

The meaningful use program also imposes certain data-portability requirements on vendors to ensure interoperability between EHR platforms. However, eClinicalWorks' software did not meet that criteria.

The company also allegedly paid customers in exchange for recommendations of its software to potential customers, a violation of the Anti-Kickback Statute. Current users were paid up to $500 every time a provider they referred completed a contract with eClinicalWorks, according to the government's allegations, totaling more than $143,400 in five years.

"Electronic health records have the potential to improve the care provided to Medicare and Medicaid beneficiaries, but only if the information is accurate and accessible," said Phillip Coyne, special agent in charge of the investigation at the HHS Office of Inspector General.

The company and three of its founders will pay $154.92 million to the federal government. A developer and two project managers will pay $80,000. The settlement also stipulates that the company enter a corporate integrity agreement with the HHS Office of Inspector General, which requires the company to undergo more stringent assessments of its software.

"Today's settlement recognizes that we have addressed the issues raised and have taken significant measures to promote compliance and transparency," said eClinicalWorks CEO Girish Navani in a statement.