Multiple DOJ Settlements Relating to Electronic Health Records Systems—What Does This Mean for Health Care Entities Today?

11 June 2019 Health Care Law Today Blog
Authors: Myla R. Reizen Kelly A. Thompson

This article originally appeared in The RAP Sheet, A Publication of the American Health Lawyers Association
(Regulation, Accreditation, and Payment Practice Group).
Copyright 2019, American Health Lawyers Association, Washington, DC. Reprint permission granted.

Over the past few years, there have been a number of Department of Justice (DOJ) settlements involving the False Claims Act (FCA) pertaining to electronic health records (EHR). The combined settlements total more than $275 million and cover a range of entities, including a pathology laboratory company and a vendor of health records software. This article provides an overview of three of the main cases in this area: eClinicalWorks, Greenway Health LLC, and Inform Diagnostics. This enforcement trend highlights the importance of complying with EHR requirements, particularly in the context of the receipt of incentive payments and fraud and abuse concerns.

In 2011, the Centers for Medicare & Medicaid Services (CMS) established the Medicare and Medicaid EHR Incentive Program “to encourage clinicians, eligible hospitals, and CAHs to adopt, implement, upgrade and demonstrate meaningful use of certified EHR technology (CEHRT).” To receive an incentive payment from CMS, an eligible provider must, among other things, adopt CEHRT and satisfy the CMS objectives for use of the technology.

Independent certification bodies are used to review and determine if the EHR system submitted by the EHR vendor meets certain requirements. In April 2018, CMS changed the name of the EHR Incentive Program to Promoting Interoperability Programs (PI). The impact of this change is to “move the programs beyond the existing requirements of meaningful use to a new phase of EHR measurement with an increased focus on interoperability and improving patient access to health information.” PI requirements include certifications, certification criteria, and use parameters. As incentive payments for EHR continue, the government scrutiny on entities receiving these payments does as well.

On May 31, 2017, DOJ announced a groundbreaking settlement agreement with eClinicalWorks (ECW), a vendor of EHR software, wherein ECW and certain of its employees agreed to pay $155 million and enter into a five-year Corporate Integrity Agreement (CIA). Under the terms of the settlement, ECW and three of its founders are jointly and severally liable for the payment of the $154.92 million settlement. Separately, developer and project managers are liable for payment as well. DOJ’s Complaint in Intervention (Complaint) alleged that ECW’s conduct caused the submission of false claims and false statements to the government.

There were two facets of the allegations in the Complaint. The first and most detailed allegations surrounded the EHR. The government alleged that to ensure the software was certified and customers received incentive payments under the incentive programs, ECW falsely attested that it met certain criteria to the certification body and prepared its software to pass such testing without actually meeting the criteria. ECW also allegedly caused its users to report inaccurate information, such as using certified EHR technology and satisfying meaningful use requirements, in the users’ attestations when requesting incentive payments from CMS.

The second aspect of the Complaint related to alleged improper payments under the Anti-Kickback Statute (AKS) under a “referral program,” “site visit program,” and “reference program.” A DOJ press release stated that the settlement also resolved allegations that “ECW paid kickbacks to certain customers in exchange for promoting its product.” The CIA that ECW was required to enter into as part of the settlement contains a number of provisions newly tailored to these issues. For instance, ECW is required to retain an Independent Software Quality Oversight Organization. ECW also must hire an Independent Review Organization (IRO) to monitor AKS compliance.

Since the start of 2019, DOJ has entered into two additional settlements involving EHR arrangements. The first involved Inform Diagnostics (Inform), a pathology laboratory company. On January 30, 2019, DOJ announced a $63.5 million FCA settlement arising from alleged claims that Inform violated the AKS and the Stark Law. The allegations stemmed from Inform allegedly providing referring physicians subsidies for EHR and free or discounted technology-related consultation services to physicians in violation of the fraud and abuse laws. More specifically, according to the settlement agreement, the United States contended that “[Inform] provided EHR donations to physicians and other health care providers that did not comply with the requirements of the AKS and the Stark Law because the donation decisions took into account the volume or value of referrals of laboratory tests or other business between EHR donation recipients and [Inform] or otherwise meet the requirements of the AKS safe harbor and Stark law exception applicable to EHR donations.” The settlement agreement included similar language concerning Inform providing free or discounted technology-related consulting services.

On February 6, 2019, DOJ announced a $57.25 million settlement with Greenway Health LLC (Greenway). According to the press release, DOJ alleged “that Greenway caused its users to submit false claims to the government by misrepresenting the capabilities of its EHR product ‘Prime Suite’ and providing unlawful remuneration to users to induce them to recommend Prime Suite.” The complaint further alleged that Greenway falsely obtained certification by modifying its test-run software to appear compliant with certification standards by running “test scripts,” which Greenway obtained in advance of testing, rather than programming Prime Suite to meet the full scope of certification criteria. By virtue of that conduct, Greenway allegedly caused Prime Suite users to falsely attest that users met the requirements for receipt of incentive payments. As with ECW, there was also an alleged violation of the AKS because of remuneration and incentives paid from Greenway to its clients to recommend Prime Suit to prospective new customers. The Greenway settlement resulted in a five-year CIA covering the company’s EHR software. Among other requirements, the CIA involves the retention of an IRO and the provision of certain benefits to Greenway customers, including free upgrades or the transfer of their data to another EHR vendor without any penalty or charge.

The above settlements clearly show an increased trend in government enforcement surrounding EHR compliance, as do recent comments from DOJ. Derrick Jackson, a Special Agent in Charge for the Department of Health and Human Services Office of Inspector General (OIG), stated “Electronic Health Records can be key to an integrated health system providing improved care,” and “putting patients at risk will result in intensive investigation and compliance obligations such as those in OIG’s comprehensive five-year Corporate Integrity Agreement.” As such, it is important that any organization that is involved with the PI Program be familiar with the standards and incorporate such requirements into its compliance program. For instance, with respect to such standards, entities should draft appropriate policies and proce-dures, train workforce members, and conduct risk assessments to identify certain vulnerabilities, among other requirements. The above CIAs and settlements can be used as valuable tools for identifying risks an entity may face when an incentive payment is received from the government. Organizations also should evaluate the necessary contract language to address the EHR concerns.

Notably, these enforcement trends are not limited to the EHR space, as CMS provides incentive payments in many other contexts as well. Fraud and abuse concerns should also be factored into EHR arrangements. Different entities are vulnerable to varying fraud and abuse concerns, and as such, should remain aware of the enforcement trends in the current health care environment with a particular focus on the issues unique to its organization. In conclusion, EHR arrangements have and will continue to be an area that should be taken into account in the health care space.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights