An electronic health records vendor, eClinicalWorks, or ECW, has agreed to pay approximately $155 million dollars to settle allegations from a contractor fraud whistleblower lawsuit that it violated the False Claims Act. The lawsuit alleged the company had paid kickbacks to customers for promoting its products and additionally misrepresented its software capabilities, according to the U.S. Department of Justice.

According to the statement made by the Acting Assistant Attorney General of the DOJ’s Civil Division Department, emerging from the contractor fraud whistleblower lawsuit, “every day, millions of American rely on the accuracy of their electronic health records to record and transmit their vital health information.” Moreover, “this resolution is a testament to our deep commitment to public health and our determination to hold accountable those whose conduct results in improper payments by the federal government.”

In the settlement announced by the federal government on May 31, the defendants will pay roughly $154.92 million dollars. Individual company employees will be required to pay approximately $80,000.

The whistleblower who also brought the False Clams Act lawsuit is personally set to receive $30 million out of the settlement, as an incentive award.

ECW is one of the largest electronic health records vendors in the United States.

The Electronic Health Records Incentive Program was created and designed to provide incentive payments to eligible hospitals and medical professionals who demonstrate the understanding, implementation and adoption of EHR technology.

Healthcare providers are offered these incentive payments by the U.S. Department of Health and Human Services (HHS). Certain requirements that must be met regarding their use and for certification of their products include passing testing provided by an HHS-approved certifying entity and demonstrating that the product meets HHS guidelines and criteria.

Allegations made in the contractor fraud whistleblower lawsuit include that ECW had misrepresented its software capabilities and falsely obtained certification for the product by concealing from the HHS-approved certifying entity that its software did not meet criteria and guidelines for product certification.

Specifically, the health records vendor, instead of enabling their software product to access necessary drug codes from a complete and comprehensive database, the company opted to hardcode 16 drug codes required for testing into its software.

The company, according to the DOJ, had also purportedly failed to “accurately record user actions in an audit log and in certain situations did not reliably record diagnostic imaging orders or perform drug interaction checks. In addition, ECW’s software failed to satisfy data portability requirements intended to permit healthcare providers to transfer patient data from ECW’s software to the software of other vendors.”

The DOJ states that “[a]s a result of these and other deficiencies in its software, ECW caused the submission of false claims for federal incentive payments based on the use of ECW’s software.”

According to the allegations made in the contractor fraud whistleblower lawsuit, violations of the federal Anti-Kickback Statute also included ECW paying its customers “$500 each to recommend its software to potential customers.”

eClinicalWorks challenged the allegations that it misrepresented its software program but says it opted to settle to evade a lengthy and expensive litigation process.

The Contractor Fraud Whistleblower Lawsuit is United States ex rel. Delaney v. eClinialWorks LLC, Case No. 2:15-CV-00095-WKS, in the U.S. District Court for the District of Vermont.