31, 2017, eClinicalWorks and individual executives and employees agreed to pay
$155 million to settle allegations of False Claims Act (FCA) and “kickback”
violations. The U.S. Department of
Justice (DOJ) joined a whistleblower’s lawsuit against eClinicalWorks, one of
the nation’s largest vendors of electronic health records (EHR) software,
signaling the government’s willingness to pursue a variety of bad actors for
healthcare fraud, including individual executives and employees of
alleges that eClinicalWorks misled its users by falsely certifying that its EHR
software met U.S. Department of Health and Human Services (HHS) requirements.
Providers who adopt certified EHR technology are eligible for incentive
payments from HHS in return for “meaningful use” of EHR technology. The DOJ
alleged that eClinicalWorks concealed that the drug codes programmed into its
EHR software and the EHR software’s data portability did not meet HHS
standards. The DOJ also alleged that eClinicalWorks violated the Anti-Kickback
Statute by paying customers to recommend its EHR software. As part of the settlement, eClinicalWorks
entered into a five-year Corporate Integrity Agreement (CIA) with the
government, requiring the company to retain an independent firm to oversee its
software quality control systems, provide customers with free updated software,
and, if customers choose, transfer data to a competitor’s system for free.
addition, eClinicalWorks and three of its lead executives were found to be
jointly and severally liable for restitution payments to the government
totaling $155 million. Three
eClinicalWorks employees were also found to be individually responsible for
restitution payments between $15,000 and $50,000.
allegations against eClinicalWorks were originally brought under the FCA’s qui
tam provision, which allows private citizens to file complaints on behalf of
the government against those suspected of defrauding federal programs. A
whistleblower is entitled to between 15 and 30 percent of moneys recovered.
Here, the whistleblower, a software technician, will receive approximately $30
The DOJ’s pursuit of FCA cases extends beyond healthcare
providers to healthcare-related companies. This is the first case in which the
government has held an EHR software vendor accountable for failing to meet
federal standards for patient safety and quality of care.
This case demonstrates the DOJ’s willingness to pursue
individuals at all levels of the company in addition to the company
itself. All individuals working in
fields that support Federal healthcare should know the applicable laws and
regulations, and speak up if they suspect fraudulent activity.
While the settlement has raised further questions about how
the government should certify and monitor EHR software, subverting government
requirements is a costly proposition. EHR software vendors and other similarly
situated healthcare-related vendors should carefully assess their compliance
review processes and ensure that information sent to the government, whether
for certification or for payment, meet all applicable requirements.
health care practice group at Plews Shadley Racher & Braun LLP regularly
works with physicians, dentists, nurses, physician assistants, and other health
care providers to counsel on FCA and other regulatory issues. Additional information about Plews Shadley
Racher & Braun LLP and its health care practice is available at
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