The Department of Health and Human Services’ Office of Inspector General is sending a strong warning to electronic health record vendors: it will not tolerate representations that their software has certain functionality if their products actually can’t do it.

In May, eClinicalWorks—one of the nation’s largest EHR vendors—and three of its founding executives agreed to pay $155 million as part of a settlement with the Department of Justice that the company allegedly violated the False Claims Act by misrepresenting the capabilities of its software.

According to OIG Senior Counsel John O’Brien, based on the DOJ allegation, eClinicalWorks caused providers using its software—which did not meet Meaningful Use certification requirements—to unknowingly submit false claims to the Medicare and Medicaid EHR Incentive Program.

In settling the case, eClinicalWorks denied any wrongdoing and said it fully cooperated with DOJ’s civil investigation. OIG noted that the case was never adjudicated in a court, but resolved in a False Claims Act resolution to expedite the process.

“We’re entering an entirely new area of healthcare fraud,” says O’Brien. The action against eClinicalWorks is “the first-ever civil settlement that we’ve had with an EHR vendor.”

Along with its partners in law enforcement, he adds that OIG will vigilantly investigate any such alleged misconduct that potentially puts patient safety at risk and results in financial losses to the federal government.

“We take the certification process for EHR software very seriously—there’s no room for manipulating this process and making false statements during the certification process,” warns O’Brien. “When there are allegations of manipulation of the certification process, OIG takes those allegation very seriously.”

O’Brien will not comment on whether OIG has any open investigations of other EHR vendors. However, he says that the agency does accept these kinds of complaints from providers via OIG’s website and hotline for reporting fraud.

Asked whether eClinicalWorks was an anomaly, O’Brien concludes that with “all conduct that comes to our attention there’s usually not just one actor,” adding that OIG’s “ground-breaking” corporate integrity agreement in this particular case “will likely be used in future cases.”

Also See: Why the eClinicalWorks settlement may rattle the industry

DOJ contends that eClinicalWorks falsely obtained certification for its EHR software when it concealed from its certifying entity that its software did not comply with the requirements for certification. Specifically, in order to pass certification testing without meeting the certification criteria for standardized drug codes, the vendor allegedly modified its software by “hardcoding” only the drug codes required for testing.

However, eClinicalWorks denied any wrongdoing in its formal statement on the settlement, adding that it fully cooperated with DOJ’s civil investigation. “The claims settled by the agreement are allegations only, and there has been no determination of liability,” according to the company statement. “Although eCW disputed the DOJ’s allegations, it decided to settle to avoid the cost and uncertainty inherent in protracted litigation.”

O’Brien emphasizes that “what was resolved here are allegations—the facts were not adjudicated in a court.” At the same, however, he adds that the allegations “involved alleged conduct that OIG and DOJ determined was of a nature that needed to be addressed by a False Claims Act resolution with a corporate integrity agreement.”

A five-year corporate integrity agreement, signed by eClinicalWorks as part of the settlement and crafted in part by O’Brien, requires the company to take several corrective steps to continue to participate in federal healthcare programs. “It has specific requirements related to the quality of EHR software,” he observes.

Under the extensive agreement, eClinicalWorks must retain an independent software quality oversight organization approved by OIG to assess its software quality control systems and provide written semi-annual reports to the agency documenting its reviews and recommendations.

“Every six months, this oversight organization will be responsible for assessing eClinicalWorks’ quality control systems for its EHR software,” says O’Brien.

In addition, the company must notify and provide its customers the opportunity—free of charge— to obtain the latest versions of their software, according to O’Brien, as well as give customers the option of having eClinicalWorks transfer their data to another EHR vendor without penalties or service charges.

The corporate integrity agreement also prohibits eClinicalWorks from restricting its customers from discussing—in any forum—problems that they might be experiencing with the vendor’s software, he points out.

“These are unique provisions that I think will reduce any patient safety risks associated with the use of eClinicalWorks’ software, because customers will have easier access to the most updated software—or be able to switch easily to other EHR vendors—and will not be prevented from openly communicating with each other about any problems,” contends O’Brien.

However, so far, eClinicalWorks appears to have weathered the settlement unscathed. The company on July 28 reported its strongest sales month of 2017, with more than 1,000 providers selecting its EHR solution in June, while second quarter of 2017 showed excellent results resulting in more than 3,000 providers being added to its customer base and revenues of $120 million. Also, in the first six months of 2017, 70 percent of eClinicalWorks’ new providers switched from different EHRs, according to the vendor.

Nonetheless, providers are well aware of the company’s settlement with the government, which has increased concerns in the marketplace. A new survey of healthcare professionals conducted by Reaction Data’s Research Cloud shows that 27 percent of respondents indicated they have decreased confidence in their EHR vendor as a result of the eClinicalWorks settlement, while 35 percent are now significantly more suspicious of other EHR vendors.

“A big takeaway from this research is the unfortunate increase in the level of distrust that providers generally feel toward all EHR suppliers (including their own suppliers in many cases), because of the actions of a few,” states the report.

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