Ambulatory technology company NextGen Healthcare will pay $31 million to the federal government to settle a whistleblower lawsuit alleging that it violated the False Claims Act.
The Department of Justice alleged that NextGen violated the False Claims Act (FCA) by misrepresenting the capabilities of certain versions of its EHR software and providing illegal incentives to induce referrals to its software, according to a complaint made public the same day the settlement was announced.
The government contends that NextGen falsely obtained certification for its software in connection with the 2014 Edition certification criteria. Specifically, the DOJ claimed that the health tech company relied on an auxiliary product designed only to perform the certification test scripts, which concealed from the certifying entity that NextGen’s EHR lacked critical functionality. The government alleges that, consequently, the EHR that NextGen ultimately released to its users lacked certain required functionalities, including the ability to record vital sign data, translate data into required medical vocabularies, and create complete clinical summaries.
NextGen is a cloud-based technology provider serving medical practices and provides solutions spanning EHRs, patient engagement, revenue cycle management, data analytics and tools to support value-based care. The company brought in $653 million in revenue in 2022, up 9.% from $596 million in 2021.
In a statement provided to Fierce Healthcare, NextGen denied that any of its conduct violated the law and noted that the settlement agreement does not include any admissions of wrongdoing.
"This agreement relates to claims from more than a decade ago. The settlement resolves the matter without monitoring or changes to NextGen Healthcare’s products or compliance policies. To avoid the distraction and expense of litigation, we believe it is in the best interest of the company to put this historical matter behind us and keep our attention focused on innovating solutions that enable better healthcare outcomes for all," a NextGen Healthcare spokesperson said.
The settlement resolves allegations filed in Vermont in 2018 by two healthcare professionals who worked at a facility that used NextGen's software under the whistleblower provisions of the False Claims Act.
The whistleblowers, or “relators,” in question were Toby Markowitz and Elizabeth Ringold. Under the qui tam or whistleblower provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Markowitz and Ringold will receive $5.58 million as part of the settlement.
“Electronic health records are an essential part of our health care system,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department's Civil Division, in a statement. “Every day, millions of patients and health care providers across the country rely on such records to accurately identify and transmit vital health information. The Civil Division is committed to protecting the integrity of the electronic health records software that is available to providers and the process by which they decide which software to select.”
The American Recovery and Reinvestment Act of 2009 established the Medicare and Medicaid EHR Incentive Program to encourage healthcare providers to adopt and demonstrate their “meaningful use” of EHR technology. Under the program, the U.S. Department of Health and Human Services (HHS) made incentive payments to eligible healthcare providers that adopted certified EHR technology and met certain requirements relating to their use of the technology. To obtain certification for their product, companies that develop and market EHR technology are required to demonstrate that their product satisfies all applicable HHS-adopted certification criteria; the company must also identify any software components on which their EHR relies to perform the criteria. Developers must first pass testing performed by an independent, accredited testing laboratory authorized by HHS, and then obtain and maintain certification by an independent, accredited certification body authorized by HHS.
In its complaint, the government also alleges that NextGen violated the Anti-Kickback Statute, which prohibits anyone from offering or paying, directly or indirectly, any remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.
In its complaint, the government contends that between January 2011 and July 2017 NextGen knowingly gave credits, often worth as much as $10,000, to current customers whose recommendation of its EHR software led to a new sale. The government alleges that other remuneration, including tickets to sporting events and entertainment, was also provided to induce purchases and referrals.
As a result, the DOJ claims that NextGen users that purchased the company's product pursuant to these recommendations submitted tainted claims for incentive payments under the Meaningful Use Program.
“Electronic health records play a pivotal role in the provision of safe, effective health care, and the testing and certification process of the EHR Incentive Program was intended to provide assurances to providers that their EHR can perform certain important functions,” said U.S. Attorney Nikolas P. Kerest for the District of Vermont in a statement. “With this settlement, our office has now resolved five investigations into misconduct by EHR companies, demonstrating our commitment to ensuring that EHR companies are held responsible for their misrepresentations.”