Sigh. Yet another EHR vendor has been found to have engaged in illegal behavior to sell its products, and has agreed to pay millions to get itself off the hook.
This time, the vendor involved is Miami-based CareCloud Health, which agreed to pay $3.8 million to settle allegations that it paid out illegal kickbacks to generate sales.
According to the U.S. Department of Justice, between January 1, 2012, and March 31, 2017, CareCloud ran a marketing referral effort called the “Champions Program.” The DoJ alleged that the program provided existing clients not only cash-equivalent credits but also cash bonuses and percentage success payments to recommend CareCloud’s EHR products to potential clients. This violated the federal anti-kickback statute, the agency concluded.
The DoJ also contended that the vendor violated the False Claims Act given that the kickback payments invalidated the claims CareCloud submitted for federal incentives under Meaningful Use programs and MIPS.
The feds became aware of the kickbacks through a whistleblower lawsuit filed by Ada De La Vega. Under the terms of the False Claims Act, which allows private individuals to sue on behalf of the government and share in any financial recovery, De La Vega will receive $803K in connection with the settlement.
CareCloud was acquired by MTBC Inc. in January 2020. It has discontinued the prior version of the marketing referral program which served as the basis for the settlement.
This settlement is actually one of the smaller fines EHR vendors have faced in recent years.
In May 2017, eClinicalWorks agreed to pay $155 million to settle a whistleblower lawsuit contending that the vendor falsely obtained certification for its EHR platform by hiding the fact that its software didn’t certification requirements.
More recently, in March 2019, a pair of former employees filed a whistleblower suit against hospital operator Community Health Systems, contending that it improperly requested more than $450 million in federal incentive payments. The suit claims that the Medhost EHR software it used contained flaws, making it ineligible for certification under the Meaningful Use program.
In January of this year, EHR developer athenahealth agreed to pay $18.25 million to resolve allegations that it violated the federal False Claims Act by paying kickbacks to boost sales of its athenaClinicals product.
Looking back on the Meaningful Use years, it’s hardly surprising that vendors took shortcuts in selling their products and supporting their clients’ Meaningful Use efforts. In fact, I suspect that the majority of EHR developers engaged in at least mildly questionable marketing practices in an effort to take advantage in a mind-bogglingly competitive market.
The question is whether there are any other massive settlements likely to emerge in the future. My guess is that we still haven’t seen the last of these lawsuits. The fight to profit from HITECH was pretty brutal for a while.
