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eClinicalWorks is a software company with a cloud-based EHR for physician practices. On May 31, 2017, the U.S. Department of Justice announced a $155M settlement with the Westborough, Massachusetts company over allegations regarding improper payments to referral sources in violation of the Anti-Kickback Statute.

According to Christine Cohn, a partner with Cohn Health Law, Inc. in Tarzana, California, the government's complaint had to do with asking current customers to recommend its products to prospective customers. Cohn wrote:

"In Paragraph 4 of the Complaint in Intervention, the government alleges that 'ECW provided remuneration to certain customers to recommend its products to prospective customers in violation of the Anti-Kickback Statute.' More details about ECW's 'incentive' programs are provided in Part VI of the Complaint (Paragraphs 79-85).

"The Anti-Kickback Statute prohibits a manufacturer of products paid for in whole or in part by federal healthcare programs, such as Medicare and Medicaid, from offering or paying any remuneration, in cash or in kind, directly or indirectly, to induce physicians, hospitals or others to order or recommend the manufacturer's products paid for in whole or in part by such federal healthcare programs.

"With its 'referral program,' 'site visit program' and 'reference program,' ECW supposedly paid (or offered to pay) various incentives to current users and others for referring customers to ECW or for promoting the software. The government's payment of Meaningful Use incentives to users made ECW's EHR product a government-funded product paid for in whole or in part by a federal health care program. In the government's view, ECW's incentive program amounted to nothing more than an illegal kickback scheme."

More than just kickbacks

Ms. Cohn's comments were in response to a specific question but an examination of the government's "complaint-in-intervention" reveals that the DOJ believes there were additional violations.

"The American Recovery and Reinvestment Act of 2009 established the Electronic Health Records (EHR) Incentive Program to encourage healthcare providers to adopt and demonstrate their “meaningful use” of EHR technology. Under the program, the U.S. Department of Health and Human Services (HHS) offers incentive payments to healthcare providers that adopt certified EHR technology and meet certain requirements relating to their use of the technology. To obtain certification for their product, companies that develop and market EHR software must attest that their product satisfies applicable HHS-adopted criteria and pass testing by an accredited independent certifying entity approved by HHS.

"In its complaint-in-intervention, the government contends that ECW falsely obtained that certification for its EHR software when it concealed from its certifying entity that its software did not comply with the requirements for certification. For example, in order to pass certification testing without meeting the certification criteria for standardized drug codes, the company modified its software by 'hardcoding' only the drug codes required for testing. In other words, rather than programming the capability to retrieve any drug code from a complete database, ECW simply typed the 16 codes necessary for certification testing directly into its software. ECW’s software also did not accurately record user actions in an audit log and in certain situations did not reliably record diagnostic imaging orders or perform drug interaction checks. In addition, ECW’s software failed to satisfy data portability requirements intended to permit healthcare providers to transfer patient data from ECW’s software to the software of other vendors. As a result of these and other deficiencies in its software, ECW caused the submission of false claims for federal incentive payments based on the use of ECW’s software."


©2018 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. One copy may be printed for personal use; further reproduction by permission only.