EHR Vendor to Pay $155 Million to Settle FCA Allegations

June 12th, 2017

EClinicalWorks (ECW), one of the nation’s largest vendors of electronic health records (EHRs), has agreed to pay $155 million dollars to settle False Claims Act (FCA) allegations. The Department of Justice (DOJ) alleged that ECW misrepresented the capabilities of its software, and paid kickbacks to certain customers in exchange for promoting its product.

The DOJ contended that ECW concealed from its certifying entity that its software did not comply with the applicable requirements of meaningful use certification. For example, ECW directly input into its software the 16 drug codes that it knew would be needed to pass the certification examination, while it left out the ability retrieve any drug code from the complete database. The software also allegedly did not accurately store user data logs and record certain laboratory orders. Additionally, according to the DOJ, ECW knew that its software did not allow for adequate portability, which ensures that data can be shared between different software packages.

Because ECW applied for federal incentive payments predicated on the results of these certification examinations, the requests for incentive payments were considered false claims under the FCA. The three founders of ECW agreed to be jointly and severally liable, along with ECW, for $154.92 million dollars. A software developer and two project managers also agreed to pay fines to the DOJ.

The settlement also includes a corporate integrity agreement to be executed with HHS. ECW agreed to oversight by an independent third party regarding software compliance, and a separate arrangement to monitor compliance with the Anti-Kickback Statute. ECW also must report known software issues to current and future customers and provide, free of charge, any software updates to bring it into compliance.