Repayment of Meaningful Use Incentive Payments Based on Fraudulent eClinical Works Certifications

 

On May 31, the U.S. Department of Justice announced the settlement of a False Claims Act complaint against eClinicalWorks, LLC (“ECW”), a developer of outpatient Electronic Medical Record (“EMR”) software used by many hospitals and other healthcare providers. The Complaint alleged that “ECW falsely represented to its certifying bodies and the United States that its software complied with the requirements for certification and for the payment of incentives under the Meaningful Use program,” officially known as the Medicare and Medicaid EHR Incentive Programs. Additionally, ECW entered into a Corporate Integrity Agreement (“CIA”) with the U.S. Department of Health and Human Services, Office of the Inspector General (“OIG”).

 

Of concern to healthcare providers who relied on ECW’s software to support Meaningful Use incentive payments, the Complaint alleges that ECW “caused its users to falsely attest to using a certified EHR technology, when ECW’s software could not support the applicable certification criteria in the field; and . . . caused its users to report inaccurate information regarding Meaningful Use objectives and measures in attestations to the Centers for Medicare & Medicaid Services (CMS).” Accordingly, ECW’s customers should not have been eligible for Meaningful Use incentive payments.

 

There are no indications to date that the U.S. Department of Justice intends to pursue ECW’s customers under the False Claims Act. The Complaint specifically acknowledges that healthcare providers relied on ECW’s certification to support their Meaningful Use incentive payments, and that ECW caused the “unknowing” submission of false Meaningful Use attestations. Nevertheless, related claims remain possible, including demands by CMS or OIG for recoupment of Meaningful Use incentive payments, or False Claims Act qui tam complaints.

 

Under the CIA, ECW must provide to all its existing customers, without charge (subject to certain limitations), the options of (i) an upgrade to their ECW software, or (ii) transfer of their data to another EMR platform. However, the CIA does not require ECW to hold its customers harmless for liabilities arising out of ECW’s actions, leaving in place the remedies and liability limitations contained in the existing software agreements. Accordingly, we recommend that any healthcare provider that relied upon ECW’s certification to support Meaningful Use incentive payments consider taking the following steps:

 

  • Assemble and review all ECW contracts and related documents that were in effect since the beginning of the Meaningful Use program, with particular attention to remedies and limitations of liability;

 

  • Review all requests for Meaningful Use incentive payments, and calculate the amount of such payments based on ECW’s false certifications;

 

  • Initiate a dialogue with CMS and/or OIG about repayment of Meaningful Use incentive payments received as a result of ECW’s false certifications; and

 

  • Consult with legal counsel as to the possibility of seeking indemnification from ECW.

 

It remains possible, of course, that CMS and OIG might announce their intent not to seek repayment from healthcare providers based on this issue; however, until and unless that happens, it would appear prudent to prepare for repayment. It is important to note that once a healthcare provider becomes aware of payments received from the federal government to which the provider was not entitled, failure to disclose and repay such payments can itself become a violation of the False Claims Act.

 

Further reading:

 

  • S. Department of Justice press release:

https://www.justice.gov/opa/pr/electronic-health-records-vendor-pay-155-million-settle-false-claims-act-allegations

https://oig.hhs.gov/fraud/cia/agreements/eclinicalworks_05302017.pdf

 

Should you have any questions about potential issues associated with this settlement, please contact Ben Townsend at (207) 621-4390 or btownsend@kozakgayer.com.