EHR Vendor Settles with Department of Justice
Background
The EHR Incentive Program was established under the American Recovery and Reinvestment Act of 2009, wherein healthcare providers have the ability, and are encouraged, to show meaningful use of their EHR technology. Under the Meaningful Use Program, healthcare providers are eligible to receive incentive payments from U.S Department of Health and Human Services (“HHS”) if they use certified EHR technology. In order to be eligible to receive incentive payments, EHR software vendors need to attest that their product meets HHS criteria and is accredited, through testing, by an independent entity that has been approved by HHS.
False Representation of Software Compliance
The allegations against ECW in this case were that ECW (1) falsely represented its software compliance to the certifying entity and misused its incentive payments received under the Meaningful Use Program; and (2) provided kickbacks to customers. ECW was also alleged to have “covered up” defects in its software. ECW hardcoded the 16 drug codes required for testing rather than programming the capability of its software to retrieve a drug code from the RxNorm standardized database. ECW’s software did not correctly perform drug interaction checks or record diagnostic imaging orders, thereby failing to accurately record actions in an audit check log. The ECW software also failed to meet portability requirements enabling the proper transfer of patient data between ECW’s software and other vendor software. This resulted in false claims being submitted by ECW’s healthcare customers by not meeting the meaningful use standards under the Medicare and Medicaid EHR Incentive Programs.
ECW also paid kickbacks to influential customers for the promotion of its software to healthcare providers. ECW was alleged to pay as much as $500 for referrals that resulted in a contract with ECW and up to $250 for additional references and introductions to and with potential prospects.
Whistleblower and Settlement
The whistleblower complaint was filed in District of Vermont under the provisions of the False Claims Act, by a former project manager software technician for various healthcare institutions that used ECW’s EHR software from April, 2010 through March, 2014.
The case was settled for $155 million – ECW and three of its founders were held jointly and severally liable for payment of $154.92 million. In addition, a software developer and two project managers were also required to make settlement payments under the settlement. For the next five years, under a Corporate Integrity Agreement (“CIA”), ECW, among other things, must provide its current customers with a free software upgrade to the certified version which is compliant with the drug database. Under the CIA, ECW is also required to offer its existing customers free data transfer to the customer’s successor vendor, if any. In addition, ECW will also need to appoint and implement a compliance committee with written compliance policies and procedures, and a compliance hotline.
Conclusion
Digital health providers, as well as other healthcare providers, should be cognizant of and understand the importance compliance with the Meaningful Use Program under the Medicare and Medicaid EHR incentive programs. This case is an eye-opener for all healthcare related information technology firms and the providers that retain and utilize their services. ECW’s software caused providers to submit fraudulent claims and its payments to its customers violated the federal; Anti-Kickback statute. The settlement is a significant example of what could result for a failure to comply, in appropriate fashion, with providers that participate in the Meaningful Use Program.
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