Konica Minolta settles electronic health records whistleblower case for $500,000

NEWARK, NJ, Aug. 27, 2020 – Konica Minolta Healthcare Americas has agreed to pay $500,000 to the federal government to settle a whistleblower case filed by Phillips & Cohen LLP that alleged an electronic health records company it acquired had cheated on certification tests to hide safety and quality issues with its software.

The Department of Justice investigated the allegations, then joined the “qui tam” (whistleblower) lawsuit against Konica Minolta and the EHR vendor, Viztek, which Konica Minolta acquired.

The lawsuit, brought by Leighsa Wilson, a former Viztek employee, was filed under seal in 2017 in federal district court in New Jersey and became public today. Konica Minolta Healthcare is based in Wayne, New Jersey.

“Our client was concerned about possible patient harm that can occur if EHR software isn’t properly certified, so she stepped forward to inform the government about what she had witnessed,” said Colette Matzzie, a partner and whistleblower attorney with Phillips & Cohen. “Ensuring that EHR software meets all governmental requirements is important to safeguard both patient care and federal funds.”

The federal government has given billions of dollars to healthcare providers as incentives to buy properly certified electronic healthcare records systems.

The complaint says Viztek violated the False Claims Act by:

  • Falsely representing to InfoGard, an EHR certifying authority, that its software met the certification criteria.
  • Hard-coding its software to pass certification requirements during the test and fraudulently obtaining certification.
  • Causing providers to falsely attest that they were using a certified EHR technology, as needed to get federal funds, when Viztek’s software could not support the applicable certification criteria.

“Certification of EHR software is crucial for sales,” Matzzie said. “Doctors and other healthcare providers qualify for incentive payments from the government for “meaningful use” of certified EHR software.”

As Viztek began certification testing in mid-2015, Konica Minolta was nearing completion of negotiations to purchase the privately held company. Mindful of this deal, Viztek executives pressured employees to ensure the software passed certification tests, according to the qui tam lawsuit.

The complaint says Viztek founder and President Joe Cermin told employees, “I don’t care if you have to lie, beg, cheat, steal, or kill” to get the software certified and indicated Viztek would otherwise lose millions of dollars. Konica Minolta’s acquisition of Viztek was announced in October 2015.

The qui tam complaint describes a mad scramble by Viztek employees during the remote certification tests conducted by InfoGard, so that its EHR software seemingly complied with federal requirements known as “Meaningful Use” rules.

Whenever Viztek’s software failed to successfully perform a test script, the company requested breaks. Each time, the complaint alleges, Viztek software developers – some working remotely from India –adjusted the software, making it appear to perform the required functions.

In at least one instance during the test, the qui tam complaint says, the development team hard-coded the EHR software with XML code that it took directly from a competitor and even left the competitor’s name in the code accidentally.

Another fix during testing wrongly caused the test scripts to output the data of real patients whose providers already were using Vitzek’s product, according to the complaint.

“The lives of patients depend upon the information processed by electronic health records,” said Wilson, a former project manager for Viztek. “Functionality testing and subsequent certification must be performed and obtained through a reliable, measurable process.”

Phillips & Cohen also represented the whistleblower in the ground-breaking case against eClinicalWorks. The whistleblower and government alleged that eClinicalWorks falsely represented to customers that its EHR system complied with Meaningful Use rules, failed to correct critical and urgent problems in the software, and paid kickbacks to boost sales.

eClinicalWorks paid $155 million to the government in 2017 to settle the whistleblower case and government charges. Since the 2017 eClinicalWorks settlement, the government has continued to pursue False Claims Act cases against EHR vendors, resulting in an additional $202 million returned to the US treasury from settlements with Practice Fusion Inc. ($145 million) and Greenway Health LLC ($57 million).

“Filing a qui tam lawsuit is a powerful and effective way to report problems with EHR software purchased with federal funds and get the problems fixed when they are ignored,” said Luke Diamond, an associate at Phillips & Cohen. “The False Claims Act protects whistleblowers from job retaliation and offers rewards if the government recovers funds as a result of the qui tam case.”

Wilson and her attorneys thanked the team at the US Attorney’s Office in New Jersey for their work on the case, particularly Assistant US Attorney Marihug Cedeño and Assistant US Attorney Nicole Mastropieri. Local counsel was Begelman & Orlow.

The qui tam complaint, captioned United States ex rel. Leighsa Wilson v. Viztek Inc. et al, is posted here.

The settlement agreement is posted here.


About Phillips & Cohen

Phillips & Cohen has represented whistleblowers for over 30 years and is the nation’s most successful law firm in that field, with more than $12.3 billion in civil settlements and criminal fines collected as a result of their whistleblower cases. Phillips & Cohen represents whistleblowers in qui tam lawsuits as well as cases brought under the whistleblower programs of the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Internal Revenue Service. www.phillipsandcohen.com

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