Electronic health records vendor eClinicalWorks (ECW) has agreed to a $155 million settlement to resolve a massive whistleblower kickback lawsuit. By agreeing to the settlement terms, the company will effectively settlement numerous allegations of False Claims Act (FCA) violations that were named in the whistleblower kickback lawsuit.

According to the whistleblower kickback lawsuit, eClinicalWorks did not honestly represent the company’s EHR software capabilities to the government. The U.S. Department of Justice also alleged the company did not sufficiently explain their paid kickback system that was used to promote the company’s product. The whistleblower lawsuit alleged that eClinicalWorks had falsely certified their software as EHR Incentive Program compliant.

Under the terms of whistleblower settlement, ECW itself and three of the company’s officers will be jointly responsible for the $154.92 million payment. Separate settlement agreements result in a bill of $50,000 for developer Jagan Vaithilingam and $15,000 each for project managers Bryan Sequeira and Robert Lynes.

Furthermore, ECW agreed to a five year corporate integrity agreement with the U.S. Department of Health and Human Service Office of Inspector General. Under this agreement, the company will be required to submit relevant documents to independent software quality oversight and to provide customers with updated to software among other clauses.

Overview of Whistleblower Kickback Lawsuit

The EHR Incentive Program was established by the 2009 American Recovery and Reinvestment Act, which is meant to help healthcare providers to implement “meaningfully use” EHR technology. According to the EHR Incentive Program, healthcare providers receive incentives based on meeting certain standards in using EHR software.

EHR programs are required to meet HHS standards, with compliance verified by an independent third party. As one of the country’s largest EHR software vendors, eClinicalWorks had high standards to meet to receive the program’s kickbacks.

The whistleblower kickback lawsuit alleges eClinicalWorks used software that did not meet these standards and had allegedly concealed the software’s limitations from the third party auditor in charge of certifying ECW.

In particular, ECW software did not meet HHS standards regarding drug code requirements that had resulted in the software “hardcoding” only in drug codes that were required to pass certification requirements. The Department of Justice also claimed the software failed to accurately log user actions, did not reliably perform required tasks, and lacked easy data transfer programs.

The whistleblower kickback lawsuit was filed by software technician Brandan Delaney, who will receive $30 million for his part in the whistleblower claim. Delaney filed the whistleblower kickback lawsuit in May 2015, after becoming aware of issues of ECW’s software.

Delaney reportedly discovered these programs when trying to input data on a prisoner healthcare system at the Rikers Island prison complex. Experts that this whistleblower settlement was the largest FCA recovery in Vermont, as well as potentially being the largest financial recovery reward in the state’s history.

This Whistleblower Kickback Lawsuit is U.S. ex rel. Delaney v. eClinicalWorks LLC, Case No. 2:15-cv-00095, in the U.S. District Court for the District of Vermont.