June 1, 2017

Electronic Health Records Vendor Pays Big to Settle False Claims Act Charges

By the C|C Whistleblower Lawyer Team

Massachusetts-based eClinicalWorks, one of the country’s largest vendors of electronic health records software, agreed to pay $155 million to settle charges it violated the False Claims Act by misrepresenting the capabilities of its software and by paying kickbacks to certain customers in exchange for promoting the company’s product. It is the largest False Claims Act settlement in the electronic health records industry. In addition to the company, also settling are three of the company’s founders (Chief Executive Officer Girish Navani, Chief Medical Officer Rajesh Dharampuriya, M.D., and Chief Operating Officer Mahesh Navani) as well as Developer Jagan Vaithilingam and Project Managers Bryan Sequeira, and Robert Lynes. See DOJ Press Release.

As established under the American Recovery and Reinvestment Act, the Electronic Health Records Incentive Program offers payments to healthcare providers that adopt certified Electronic Health Records technology. But companies marketing the technology must attest that it satisfies applicable Health and Human Services criteria and pass independent testing by an HHS-approved testing company. According to the government, eClinicalWorks falsely obtained certification for its Electronic Health Records software when it concealed from its certifying entity that its software did not comply with the requirements for certification.

In announcing the settlement, the government stressed the importance of accurate electronic health records and its commitment to go after companies that misrepresent the integrity of their system:

Every day, millions of Americans rely on the accuracy of their electronic health records to record and transmit their vital health information. . . . 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. Those who engage in fraud that undermines the goals of EHR or puts patients at risk can expect a thorough investigation and strong remedial measures . . . .

The allegations leading to the settlement originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Brendan Delaney, a software technician formerly employed by the New York City Division of Health Care Access and Improvement. Mr. Delaney will receive a whistleblower award of roughly $30 million from the proceeds of the government’s recovery.

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