One of the nation’s largest vendors of health record software, eClinicalWorks (ECW), has agreed to pay the government $155 million to settle claims that it misrepresented the capabilities of its software to its nearly 850,000 subscribers and that it paid kickbacks to certain customers in exchange for promoting its product. The case, initially filed by a whistleblower, represents the first time that the government has held a health records vendor to account for a failure to meet federal standards for the certification of health record software—in this instance by “gaming the system” to purposely mislead the certifying entity as to the capabilities of its software.

Under the American Recovery and Reinvestment Act of 2009, healthcare providers who adopt certified Electronic Health Records (EHR) technology are offered incentive payments by the U.S. Department of Health and Human Services (HHS). In order to obtain the certification, companies that develop EHR software must verify that their software meets HHS criteria and pass testing by an accredited, independent, and HHS-approved certifying entity.

The government intervened in the whistleblower’s case and developed evidence demonstrating that ECW falsely obtained its software certification by purposely misleading the outside certification team during the course of its certification testing. For instance, ECW modified its software by hardcoding into its software only those drug codes that it knew were required for testing, instead of programming in the ability to retrieve any drug code needed from a complete database. The software also failed to record user actions in an audit log, failed to satisfy data portability requirements, and failed to perform drug interaction checks. As a result of these failures, ECW caused the submission of false claims for federal incentive payments by the health care entities that utilized its software.

While not admitting guilt, the settlement agreement requires ECW and three of its founders to pay nearly $154 million to the government. The company also agreed to a Corporate Integrity Agreement (CIA) that provides for several very strict terms, including a requirement that ECW allow existing customers to obtain updated versions of its software for free and that it give customers the option to have ECW transfer their data to another EHR software provider—also free of charge. So, in addition to the monetary settlement, ECW stands to lose substantial sums in the provision of free software updates and lost business.

Should you have questions regarding this alert, please do not hesitate to contact any of the FisherBroyles Health and Pharmacy Law attorneys listed below.

Brian E. Dickerson

Anthony Calamunci

Nicole Hughes Waid

Amy Butler

Katy Wane