EHR vendor, executives to pay $155M for allegedly misrepresenting software’s capabilities

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Westborough, Mass.-based eClinicalWorks, an EHR vendor, and some of its executives and employees have agreed to pay $155 million to resolve allegations it violated the False Claims Act, according to the Department of Justice.

HHS offers incentive payments to healthcare provider organizations that demonstrate meaningful use of certified EHR technology. Companies that develop and market EHR software must attest that their software meets certain criteria adopted by HHS and also pass testing by an HHS-approved entity.

The government alleged eClinicalWorks falsely obtained certification for its EHR software by withholding information from its certifying entity. For example, the company allegedly concealed that its software wasn’t able to meet certain criteria for standardized drug codes. Software must be able to retrieve any drug code from a complete database for certification. Instead of disclosing that its software didn’t meet this requirement, eClinicalWorks allegedly hardcoded only the 16 drug codes required for testing directly into its software.

Due to eClinicalWorks’ alleged misrepresentations, healthcare organizations using the company’s software submitted false claims for federal incentive payments, according to the DOJ.

The government also alleged the company paid kickbacks to certain customers in exchange for promoting its product.

Under the settlement agreement, eClinicalWorks and three of its founders — CEO Girish Navani, CMO Rajesh Dharampuriya, MD, and COO Mahesh Navani — will pay $154.92 million to the federal government. A software developer will pay an additional $50,000 and two project managers will each pay $15,000, according to the DOJ.

In addition to the monetary settlement, eClinicalWorks entered into a corporate integrity agreement with HHS’ Office of Inspector General that covers the company’s EHR software.

The allegations against eClinicalWorks were originally brought under the qui tam, or whistle-blower, provisions of the False Claims Act.

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