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What are the Potential Ripple Effects of the eClinicalWorks Settlement?

June 14, 2017
by Heather Landi
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This is Part One of a two-part article that examines the potential impact of the eClinicalWorks settlement on health IT policy and the vendor market
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The recent settlement of a False Claims Act lawsuit against electronic health records software vendor eClinicalWorks should serve as a wake-up call to both health IT vendors, and the healthcare providers who are the end-users of these technologies, according to many healthcare IT industry leaders.

On May 31, the U.S. Department of Justice announced a settlement that holds eClinicalWorks, and the company’s founders and executives—Chief Executive Officer Girish Navani, Chief Medical Officer Rajesh Dharampuriya, M.D., and Chief Operating Officer Mahesh Navani—liable for payment of $155 million to resolve a False Claims Act lawsuit. The company allegedly violated federal law by misrepresenting the capabilities of its software and for allegedly paying kickbacks to certain customers in exchange for promoting its product, according to the Justice Department.

The complaint alleges eClinicalWorks falsely attested to its certifying body that it met certification requirements under the Meaningful Use program, and in turn caused its healthcare provider customers to make false claims for incentive payments under the Meaningful Use program. The U.S. Department of Health and Human Services (HHS) established the Meaningful Use program, pursuant to the HITECH Act, and it provides incentive payments to healthcare providers who demonstrate meaningful use of certified EHR technology.

It is important to note that the Westborough, Mass.-based EHR vendor has not admitted any fault or wrongdoing and its software remains fully certified under the Meaningful Use program.

In response to a media request for an interview about the settlement, an eClinicalWorks spokesperson sent a letter that was sent to the company’s customers. In that letter, eClinicalWorks stated that it would, in addition to paying $155 million, bolster its compliance program. “The inquiry leading to the settlement primarily centered on technical aspects of the Meaningful Use program and allegations that eClinicalWorks software had technical non-conformities related to some of the criteria, all of which have since been addressed,” eClinicalWorks’ CEO Girish Navani stated in the letter.

Regarding the allegations that its customer referral program violated the federal Anti-Kickback statute, Navani wrote in the letter, “While referral programs like this are common in the industry, and while HHS-OIG (Department of Health and Human Services Office of the Inspector General) has provided no guidance regarding them, the government took the position that the payments were improper. We disagreed but have nevertheless discontinued the program.”

Jeffrey Smith, vice president of public policy at the Washington, D.C.-based American Medical Informatics Association (AMIA), says, on the surface, the settlement is about the federal government holding an electronic health records vendor accountable for allegedly failing to meet federal standards designed to ensure patient safety and quality patient care. “When you peel back the layers of the onion a little bit, what you find is that this case sheds light on genuine deficiencies in the current health IT certification program, and it details the many ways that risks to patient safety can arise when software is not developed properly or when it’s not implemented or used properly,” he says.

“This case really highlights how benign glitches can have far-reaching impacts to patient safety. I imagine every single CIO out there understands this notion very well, because while we all suffer through computer glitches and little hiccups on smartphones—in healthcare, a glitch can be the difference between life and death,” Smith says. “I think if you are a CIO trying to figure out what is that you want to do as a result of this, you should probably go and have a conversation with your vendor to make sure that they understand the implications of this $155 million settlement. And, I anticipate that the $155 million that the government is getting is only the beginning.”

Drilling Down into the Case

The Justice Department’s settlement with eClinicalWorks resolves allegations in a lawsuit filed in the District of Vermont by Brendan Delaney, a software technician formerly employed by the New York City Division of Health Care Access and Improvement. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. As a result of the resolution, Delaney will receive approximately $30 million.

According to a press release issued by a law firm representing Delaney, Phillips & Cohen, Delaney was, at the time, a New York City government employee implementing the eClinicalWorks EHR system at Rikers Island for prisoner healthcare when he first became aware of numerous software problems that he alleged put patients at risk.

In its complaint-in-intervention, the Justice Department accused the vendor of "gaming" the certification test, by, for example, modifying its software by “hardcoding” only the drug codes required for testing. “In other words, rather than programming the capability to retrieve any drug code from a complete database, ECW simply typed the 16 codes necessary for certification testing directly into its software. ECW’s software also did not accurately record user actions in an audit log and in certain situations did not reliably record diagnostic imaging orders or perform drug interaction checks,” the Justice Department stated in a press release about the settlement.

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