March 29, 2024

Electronic Health Records

Sore point: Allegations of fraud in the Electronic Health Records market

The EHR market has been rife with abuse.

Amy Keller | 4/7/2020

Remedies

Aggressive enforcement and fines may help clean up the industry. Following its settlement with eClinicalWorks, the Department of Health and Human Service Office of Inspector General warned EHR vendors and others that it was cracking down on fraud. “We’re entering an entirely new era of health care fraud,” John O’Brien, OIG’s senior counsel, said in a 2017 video statement. “The message OIG wants to send to the health care community is that we take the certification process for EHR software very seriously. There is no room for manipulating this process and making false statements during the certification process. OIG will vigilantly along with its law enforcement partner investigate any conduct that places patient safety at risk and that causes losses to the federal health care program.”

EHR-Related Settlements

eClinicalWorks (May 2017)
The Massachusetts EHR vendor and three of its founders paid $155 million to settle allegations that it misrepresented the capabilities of its software, in part by cheating on national certification tests, and paid kickbacks to physicians to promote its products.

Practice Fusion (January 2020)
The Silicon Valley vendor (acquired in 2018 by Allscripts) paid $145 million to resolve civil and criminal charges that it solicited and received $1 million in kickbacks from an opioid manufacturer in exchange for creating prompts in its EHR software that encouraged doctors to prescribe the addictive pain medication. The company, which made a name for itself by offering free software to doctors, admitted to participating in the scheme as part of its “criminal resolution.”

Inform Diagnostics (January 2019)
The Texas-based pathology lab, formerly known as Miraca Life Sciences, paid $63.5 million to settle allegations (triggered by three whistleblower lawsuits) that it provided kickbacks to referring physicians by providing them with free or discounted EHR consulting services.

A 2016 complaint filed by the federal government and more than a dozen states, including Florida, alleged that Miraca engaged in a scheme using EHR software made by Boca Raton-based Modernizing Medicine to induce dermatologists to use Miraca’s pathology services. According to the complaint, Modernizing Medicine’s software provided “enhanced” features to doctors who used Miraca as their lab but did not make those features available if the providers used other laboratories.

Miraca also deployed employees nationwide to train doctors on Modernizing Medicine’s EHR software, “EMA,” and paid Modernizing Medicine a “per-click fee for each lab ordered via EMA,” according to the complaint. Miraca’s “dermatopathology” caseload grew to 650,000 in 2015 — a 32% growth over the prior year, according to the government.

Modernizing Medicine, which was originally named as a defendant in the case but was later dropped, declined to comment on the matter.

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