Watertown, Mass.-based Athenahealth has agreed to pay $18.25 million to resolve allegations that it paid unlawful kickbacks to generate sales for its electronic health record software, the Justice Department announced Thursday.
The U.S. in a complaint filed in conjunction with the settlement alleged that three of the company's marketing programs violated the False Claims Act and the anti-kickback statute.
Athenahealth invited prospective and existing customers to "Concierge Events," which involved providing free travel, tickets and accommodations to such sporting and entertainment events as the Masters Tournament and the Kentucky Derby, according to the complaint. Athenahealth also paid existing customers up to $3,000 if they referred prospective customers to sign up for Athenahealth's services through a lead generation program.
The third marketing program, according to the complaint, involved Athenahealth entering into deals with competitors who were discontinuing their EHR products. Under such deals, Athenahealth paid the competitor if practices converted into Athenahealth customers.
The Justice Department's complaint intervenes in two whistleblower lawsuits unsealed Thursday, both of which were filed in federal court in Massachusetts in 2017.
The whistleblower share to be awarded from the settlement has not yet been determined.
The complaint is part of the U.S. government's emphasis on combating healthcare fraud, according to the Justice Department.
"This resolution demonstrates the department's continued commitment to hold EHR companies accountable for the payment of unlawful kickbacks in any form," said Acting Assistant Attorney General Brian Boynton for the Justice Department's Civil Division, in a statement. "EHR technology plays an important role in the provision of medical care, and it is critical that the selection of an EHR platform be made without the influence of improper financial inducements."
"If the benefits of electronic health records are to be fully realized, patients must be confident providers have selected the most effective system—not the one paying the largest kickbacks," said Phillip M. Coyne, special agent in charge for the HHS Office of Inspector General, in a statement. "We will continue to hold accountable those who provide illegal incentives in order to influence the decision-making of healthcare providers."
The Justice Department's settlement with Athenahealth adds to a growing list of enforcement taken against EHR vendors.
In 2017, eClinicalWorks and some of its employees were ordered to pay $155 million for allegedly falsely obtaining certification for its EHR software. In 2019, Greenway Health was ordered to pay $57.25 million to resolve allegations it had misrepresented its EHR capabilities and provided unlawful payments to customers to recommend its EHR product.
Last year, Practice Fusion—an EHR vendor that was acquired by Allscripts Healthcare Solutions in 2018—agreed to pay $145 million to resolve criminal and civil investigations, including a probe into a scheme to increase opioid prescriptions. The case marked the first criminal action taken against an EHR vendor, according to the Justice Department.
A spokesperson for Athenahealth during a phone call with Modern Healthcare said Athenahealth agreed to settle to avoid costly and prolonged litigation, but that the company had admitted no wrongdoing. She stressed that the settlement with the Justice Department didn't involve claims related to patient safety, software functionality or certification.
She added that Athenahealth had already discontinued two of the marketing programs before the Justice Department began investigating; the third program on lead generation is being wound down.
"Athenahealth places the highest priority on compliance with all laws and regulations governing our industry," she wrote in an emailed statement. "While we have full confidence in our robust compliance policies and programs, we agreed to this settlement—under which we admit no wrongdoing—to put this matter behind us and move forward with our critical work on behalf of patients and healthcare providers."