EHR Companies Increasingly the Focus of DOJ Fraud Investigators

A Massachusetts-based electronic health records (EHR) company will pay more than $18 million to resolve allegations that it paid illegal kickbacks to generate sales through its marketing programs. It is the latest in a number of EHR companies under investigation by the U.S. Department of Justice.

The complaint alleges that athenahealth Inc. (Athena), violated the False Claims Act and the Anti-Kickback statute in a number of ways. It did so by providing all-expense-paid invitations to sporting, entertainment and recreational events to prospective and existing customers who attended their “concierge events.†These included trips to the Masters Tournament and Kentucky Derby.

The government also alleged it did so by paying $3,000 in kickbacks to existing customers who helped the company identify and refer new prospective clients, regardless of how much time that existing customer spent on generating new client leads.

Finally, it was alleged that Athena cut deals with competing vendors that were doing away with their own EHR technology to refer those clients to Athena. Under these deals, Athena paid the competitor based on the value and number of practices that became Athena clients.

“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. Time and again, we’ve seen fraudulent activity undermine the integrity of medical decisions, subvert the health marketplace, and waste taxpayer dollars,†said Phillip M. Coyne, special agent in charge for the Office of Inspector General of the U.S. Department of Health and Human Services, in a news release. “We will continue to hold accountable those who provide illegal incentives in order to influence the decision-making of health care providers.â€

The use of electronic health records is on the rise and fraud schemes continue to be a focus of fraud investigations. In a December 2020 speech to the American Bar Association Civil False Claims Act and Qui Tam Enforcement Institute, Deputy Assistant Attorney General Michael D. Granston noted that a focal point of the Justice Department’s future enforcement efforts would be fraud pertaining to EHRs.

“Providers increasingly rely on electronic health records to provide vital and unbiased information to improve treatment outcomes for patients. While electronic software is intended to reduce errors and improve the delivery of care, the transition to a digital format has also introduced new opportunities for fraud and abuse,†Granston stated. “Given the critical and growing role that electronic health records play in our health care system today, and CMS’ continued use of incentive payments to encourage the use of such records, we expect to see more of these cases.â€

Last August, a New Jersey-based electronic health records company agreed to pay $500,000 to resolve allegations that a former subsidiary caused users to file false claims with the government by misrepresenting the capabilities of its software.

In January 2020, the Department of Justice announced another EHR company, Practice Fusion, paid $145 million to resolve allegations it engaged in a kickback scheme designed to increase opioid prescriptions.

And, in February 2019, Greenway Health LLC, a Florida-based developer of EHR software agreed to pay $57.25 million to settle False Claims Act allegations.

The Health Law Offices of Anthony C. Vitale can assist clients facing allegations Anti-Kickback and False Claims Act violations. For more information contact us at  305-358-4500 or email info@vitalehealthlaw.com.