Phillips & Cohen partner Colette Matzzie writes in HIStalk about the key takeaways from Phillips & Cohen’s ground-breaking whistleblower lawsuit against electronic health records vendor eClinicalWorks, which settled for $155 million earlier this year. Matzzie highlights several unique aspects of the $155 million settlement, including an innovative Corporate Integrity Agreement and the revelation that the Anti-Kickback Statute forbids EHR vendors from paying or rewarding users to promote or refer others as customers.
1. The federal False Claims Act provides an effective way to hold EHR vendors accountable for failing to meet Meaningful Use standards.
Many customers had complained to EClinicalWorks about major problems with its software, but little changed. It took a knowledgeable healthcare IT implementation specialist and the might of the US government to get the software problems fixed. They used a powerful whistleblower law known as the False Claims Act, which encourages whistleblowers to fight fraud by filing “qui tam” lawsuits, to force ECW to take action. Anyone who “causes” false claims to be submitted to the government is liable under the False Claims Act. Customers of ECW relied on representations that ECW’s EHR technology was properly certified and therefore, unknowingly submitted tens of thousands of claims for government incentive payments that falsely attested MU requirements had been met.
2. The federal Anti-Kickback Statute forbids EHR vendors from paying or rewarding users to promote or refer others as customers.
Many healthcare providers, pharmaceutical companies, and medical device manufacturers have been penalized for violating the Anti-Kickback Statute, but the ECW case is the first time it has been applied in the EHR industry. The government cited payments totaling almost $300,000 through ECW’s “referral program,” “site visit program,” and “reference program,” in addition to unknown amounts for consulting and speaker fees paid to influential users, as evidence of alleged violations of the Anti-Kickback Statute. The law prohibits providing money, gifts, or other remuneration intended to get referrals for services or items paid for by federal healthcare dollars except under very limited circumstances.