eClinicalWorks (ECW), a major player in the electronic health records (EHR) software industry, has agreed to pay $155 million to settle a False Claims Act lawsuit. The lawsuit claims that ECW misrepresented the capabilities of its software and paid kickbacks to certain customers to promote its product. This settlement, announced by the Justice Department, also involves several ECW employees.
Acting Assistant Attorney General Chad A. Readler emphasized the importance of accurate electronic health records for millions of Americans. He stated that the resolution underscores the Justice Department’s commitment to public health and holding accountable those who cause improper federal payments.
The American Recovery and Reinvestment Act of 2009 introduced the EHR Incentive Program to encourage healthcare providers to adopt certified EHR technology. To qualify for certification, EHR software companies must meet specific criteria set by the U.S. Department of Health and Human Services (HHS) and pass testing by an accredited entity.
The government alleges that ECW falsely obtained certification for its EHR software by concealing non-compliance with certification requirements. For instance, ECW allegedly “hardcoded” only the drug codes needed for certification testing, rather than programming the software to retrieve any drug code from a complete database. Additionally, the software reportedly failed to accurately record user actions, diagnostic imaging orders, and drug interaction checks. It also did not meet data portability requirements, which are crucial for transferring patient data between different EHR systems. These deficiencies led to the submission of false claims for federal incentive payments.
Acting U.S. Attorney Eugenia A.P. Cowles for the District of Vermont highlighted the significance of this settlement, noting it as the largest False Claims Act recovery in Vermont’s history. She praised the collaborative efforts of her office, the Civil Division’s Commercial Litigation Branch, and HHS.
Under the settlement terms, ECW and its founders—CEO Girish Navani, Chief Medical Officer Rajesh Dharampuriya, M.D., and COO Mahesh Navani—are jointly liable for $154.92 million. Additionally, Developer Jagan Vaithilingam will pay $50,000, and Project Managers Bryan Sequeira and Robert Lynes will each pay $15,000.
As part of the settlement, ECW entered into a Corporate Integrity Agreement (CIA) with the HHS Office of Inspector General (HHS-OIG). This five-year CIA mandates that ECW retain an Independent Software Quality Oversight Organization to assess its software quality control systems and provide semi-annual reports. ECW must also notify customers of any safety-related issues and maintain a comprehensive list of such issues on its customer portal. The CIA requires ECW to offer updated software versions free of charge and allow customers to transfer their data to another EHR provider without penalties. Additionally, an Independent Review Organization will review ECW’s arrangements with healthcare providers to ensure compliance with the Anti-Kickback Statute.
Special Agent in Charge Phillip Coyne of HHS-OIG emphasized the potential of EHRs to improve care for Medicare and Medicaid beneficiaries, provided the information is accurate and accessible. He warned that those engaging in fraud that undermines EHR goals or endangers patients can expect thorough investigations and strong remedial measures.
The settlement resolves allegations in a lawsuit filed by Brendan Delaney, a former software technician for the New York City Division of Health Care Access and Improvement. Filed under the qui tam provisions of the False Claims Act, the lawsuit allows private individuals to sue on behalf of the government and share in any recovery. Delaney will receive approximately $30 million as part of the resolution.
This case was jointly handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Vermont, the HHS Office of Inspector General, and various HHS agencies.
The case is titled United States ex rel. Delaney v. eClinicalWorks LLC, 2:15-CV-00095-WKS (D. Vt.). The claims resolved by the settlement are allegations only, with no determination of liability.
