Readers Write: Five Lessons from the Five Years Since the EClinicalWorks Settlement

Five Lessons from the Five Years Since the EClinicalWorks Settlement
By Colette Matzzie, JD

Colette Matzzie, JD is an attorney and partner with Phillips & Cohen, LLP of Washington, DC.

The June 2017 announcement by the Department of Justice of a $155 million settlement with EClinicalWorks for alleged misrepresentation of the capabilities of its electronic medical record software heralded the start of a new area for health fraud enforcement. Both DOJ and the HHS – Office of Inspector General announced that investigations of alleged fraud involving electronic health records systems would be a top enforcement priority. Enforcement has continued at a steady clip, with DOJ bringing actions against six additional electronic health records vendors. There is every reason to think more will be forthcoming.

Most actions have been initiated by whistleblowers using the False Claims Act, but, at least two actions, including one resulting in a $145 million settlement, were initiated by the government.

Five lessons can be drawn from this period of robust enforcement.

DOJ and HHS-OIG have made good on their promise to investigate allegations of fraud in the development and implementation of electronic health records.

Since June 2017, five settlements and one additional intervention have been announced:

• February 2019 settlement with Greenway for $57.25 million.
• January 2020 settlement with Practice Fusion for $145 million.
• August 2020 settlement with Konica Minolta for $500,000.
• January 2021 settlement with Athenahealth for $18.25 million.
• April 2021 settlement with CareCloud for $3.8 million.
• March 2022 intervention in a pending qui tam against Modernizing Medicine.

The US Attorney in Vermont has led the way, but with US attorneys in Northern Georgia, Northern California, New Jersey, Southern Florida, and Massachusetts joining in. Five of the cases were initiated by whistleblowers. Three settlements (EClinicalWorks, Greenway, and Practice Fusion) required Corporate Integrity Agreements (CIAs) with OIG with ongoing federal oversight of software development, relationships with customers, and financial arrangements.

Financial relationships between electronic medical record companies and providers have been a major enforcement focus.

All but one settlement allege violations of the federal Anti-Kickback statute, which prohibits the payment of remuneration to induce referrals for items or services paid for by federal health programs. For example, DOJ alleged that CareCloud provided customers with credits, cash bonuses, and other payments to recommend the software and not to say anything negative. We can expect vigorous enforcement of the Anti-Kickback statute for health IT vendors where federal payments, whether under the Meaningful Use or Promoting Interoperability programs or otherwise, provide the necessary federal funding hook for allegations.

Kickbacks paid to EMR vendors by pharmaceutical companies and other third-party medical providers to influence clinical decisions are also ripe for enforcement.

Of major significance is the January 2020 resolution of criminal and civil charges with Practice Fusion for soliciting and receiving kickbacks from a major opioid company for utilizing its EMR to influence physician prescribing of opioid pain medication. Clinical decision support is an essential requirement for EMRs to deliver their promise of evidence-based clinical care. The Practice Fusion settlement brought scrutiny on EHRs leveraging their power to influence clinical decisions and extracting payments from pharmaceutical companies to implement CDS tools to increase prescribing of the sponsor’s drugs. This practice threatens to undermine the promise of EMRs to improve patient health in favor of profits for the EHR vendor.

Individual accountability has been an important feature of EMR enforcement actions.

DOJ’s interest in holding individuals accountable for corporate wrongdoing has peaked in the last five years and can be seen in a wide variety of industries. No less with EMR enforcement, DOJ has held accountable individuals for their participation in alleged misconduct involving EMR software. In EClinicalWorks, three of the company founders were held jointly and severally liable for payment of nearly $155 million, with three others responsible for smaller payments for their role. Health IT companies can expect continued scrutiny of the knowing decisions of individuals.

Future enforcement actions will include recovery of funds spent as part of the Merit-Based Incentive Payment System or MIPS.

Damages in the EClinicalWorks settlement recovered payments made under the Meaningful Use program. But recent settlements have also referenced recovery of payments under MIPS. There is every reason to think that DOJ will continue to seek recoupment from vendors of the portion of payments allocated for compliance with Promoting Interoperability requirements. Likewise, one should anticipate that DOJ and OIG will turn to enforcement of the Cures Act, including compliance with interoperability and information blocking mandates.