CASE OF THE MONTH

The eClinicalWorks EHR Settlement—Big Fines & Unprecedented CIA Obligations

With all the money it generates, it was only a matter of time before Electronic Health Records (EHR) technology got caught up in the False Claims Act dragnet. (See the related story on EHR overpayments by the CMS on page 11.) A significant new case came down on May 31 when eClinicalWorks (ECW), one of the country’s biggest EHR software vendors agreed to pay $155 million to settle false claims charges for allegedly misrepresenting the capabilities of its product.

The Justice Department claims that ECW cheated its way to certification by not telling the certifying entity that its EHR software didn’t meet HHS criteria for accurate recording of user actions in audit logs, drug interaction checking and data portability.

EHR Certification, 101
Starting in 2009, HHS began making incentive payments to providers for demonstrating their "meaningful use" of certified EHR technology. To get their products certified, EHR vendors had to:

  • Attest that the product meets HHS EHR criteria; and
  • Pass testing by an independent, HHS-approved certifying entity.

The ECW Case
The Justice Department claims that ECW cheated its way to certification by not telling the certifying entity that its EHR software didn’t meet HHS criteria for accurate recording of user actions in audit logs, drug interaction checking and data portability. To further the deception, ECW allegedly used "hardcoding" to modify its software before certification testing to ensure it would pass.

Result: The software was falsely certified. And because of that, provider claims for "meaningful use" incentives based on ECW’s EHR software constituted false claims for which ECW was responsible.

Although it denies the charges, ECW has decided that settlement is wiser than resistance. At $154.92 million, the settlement is the largest False Claims Act recovery in the District of Vermont and may even be the largest financial recovery in the history of the State of Vermont, according to the DOJ press release. Here is how the bill will be divvied up:

  • Three of ECW’s founding members, including its CEO and medical director are jointly and severally liable for all $154.92 million;
  • One of the software developers will pay a separate $50,000 out of his own pocket; and
  • Two of the software’s project managers will pay $15,000 apiece.

The Corporate Integrity Agreement
The damages are only part of the story. Arguably, the most significant and groundbreaking aspect of the settlement is the Corporate Integrity Agreement. Five-year CIAs are par for the course in settlements of these cases. But the ECW includes some innovative elements designed to clean up the mess and ensure it does not happen again, including ECW’s obligation to:

  • Retain an Independent Software Quality Oversight Organization to assess the firm’s software quality control systems and issue written semi-annual reports to the OIG;
  • Provide prompt notice to its customers of any patient safety issues that may result from not telling the truth about its EHR software;
  • Maintain a comprehensive list of such safety issues and steps mitigate them on its customer portal;
  • Offer customers updated versions of the EHR software free of charge;
  • Offer customers the option of having ECW transfer their data to another EHR software vendor without penalties or service charges; and
  • Retain an Independent Review Organization to ensure that its provider arrangements comply with the Anti-Kickback Statute.

[For more details about the ECW case, see United States ex rel. Delaney v. eClinialWorks LLC, 2:15-CV-00095-WKS (D. Vt.)]

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