Software Vendor for Healthcare Providers Settles with Government for $155 Million FCA and Anti-Kickback Violations

In this issue, our False Claims Act (“FCA”) whistleblower attorneys report one of the largest FCA settlements in history.  This special type of settlement involved an Electronic Health Record (“EHR”) company by the name of eClinicalWorks.  This E.H.R. company provided software to health care providers.  The providers, in turn, would then submit certifications to the government that they have E.H.R. programs to digitize their health records.  By so doing, the health care providers would then receive “meaningful use” incentive payments.  Without a timely certification, the health care providers would lose out on millions of dollars of the Department of Health and Human Services (“HHS”) incentive payments.

Here, eClinicalWorks falsely reported that the E.H.R. software that it sold to the health care providers met the certification criteria created by HHS.  Further, eClinicalWorks defrauded the government by intentionally showing that its E.H.R. software would pass the tests while in actuality it did not pass the certification test.  Although no real billing or claim was submitted for payment, by falsely attesting that its products were sufficient for the health care providers to pass the meaningful use certification, eClinicalWorks cause the health care providers to attest and certify to HHS that they met the requirements and receive the millions of dollars in incentive payments.

Therefore, companies like eClinicalWorks who act as vendors for health care providers may not offer services or products that purport to meet government incentives.  These goods and services may then cause the government to pay millions, or billions of dollars in health care fraudulent payments to providers when they were not legitimate.  These are then in violation of the FCA and Anti-Kickback Statute.  The providers, this may also implicate the Stark Law.

As part of the settlement, eClinicalWorks would have to enter into a Corporate Integrity Agreement (“CIA”) and ensure that its software quality is monitored by an independent third party.  It will also allow its customers to transfer their data to other vendors and take other serious steps to assure its users that it has mitigated any change of other FCA violations.

Under the FCA, the Judge is entitled to order the defendant to pay triple the actual damages that the jury finds.  In addition, the FCA also permits statutory penalties from $5,500 to $11,000 for each false claim submitted by the defendant.  As result, the whistleblower will receive approximately 15 to 25 percent of the total FCA recovery plus attorney’s fees.

As the main enforcement arm of the federal government, the Justice Department reviews all cases filed under the FCA.   Then, once the whistleblower case is assessed, the government decides whether it will prosecute or allow the whistleblower to bring the complaint on the government’s behalf.

The FCA is used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame.  See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.