DOJ Announces New Settlement with EHR Company for Payment of Kickbacks

The U.S. Department of Justice (DOJ) announced an $18.25 million settlement with athenahealth, Inc. (Athena), a developer of electronic health records (EHR) systems, to resolve allegations that it paid illegal kickbacks to promote sales of its EHR software, athenaClinicals.

EHR software is a digital version of a patient’s medical history rather than a paper chart that contains the patient’s information, test results, and health information.

DOJ alleged that Athena violated the False Claims Act and the Anti-Kickback Statute through three of its marketing programs.

First, Athena invited its potential customers to lavish, all-expense-paid sporting, entertainment and recreational events. These events included trips to events such as the Masters Tournament and the Kentucky Derby, and included complimentary travel along with luxury accommodations, meals and alcohol.

Second, Athena operated a sham “Lead Generation” program which paid customers up to $3,000 per physician that signed up for Athena services. The payments were not linked to how much time (if any) the client spent meeting with the lead.

Third, Athena used “Conversion Deals” to get referrals from competitors who discontinued their EHR products. The Conversion Deals, however, were solely based on the value and volume of practices that were successfully converted into Athena customers.

DOJ alleged that these programs resulted in improperly generated sales for Athena while causing healthcare providers to submit false claims to the federal government related to incentive payments for adoption and “meaningful use” of Athena’s EHR technology.

In statements, DOJ officials stressed the dangers associated with corrupting the healthcare market through illegal kickbacks as well as the DOJ’s commitment to pursuing these sorts of EHR fraud cases. “Across the country, physicians rely on electronic health records software to provide vital patient data. Kickbacks corrupt the market for health care services and risk jeopardizing patient safety,” said United States Attorney Andrew E. Lelling. “We will aggressively pursue organizations that fail to play by the rules; EHR companies are no exception.”

“This resolution demonstrates the department’s continued commitment to holding EHR companies accountable for the payment of unlawful kickbacks in any form,” said Acting Assistant Attorney General Brian Boynton for the Department of Justice’s Civil Division. “EHR technology plays an important role in the provision of medical care, and it is critical that the selection of an EHR platform be made without the influence of improper financial inducements.”

The Athena settlement is another example of EHR companies being prosecuted for paying illegal kickbacks. Most notably, an EHR company, Practice Fusion, admitted that it solicited and received kickbacks of nearly $1 million from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications.

Other notable FCA settlements involving EHR companies have included kickback allegations as well. For example, eClinicalWorks had a number of schemes where it either paid providers directly to recommend its software or disguised the kickbacks as speaker fees or referral fees. eClinicalWorks settled the case for $155 million. Similarly, Greenway Health settled with DOJ for $57.25 million to resolve allegations that involved, in part, Greenway’s payment of kickbacks to increase sales of its EHR software.

It is clear that illegal kickbacks are common in the EHR industry and DOJ is interested in investigating the illegal, fraudulent conduct. These EHR kickback cases are important because kickbacks result not only in increased costs to patients and the government but also corrupt medical decision-making that can result in potential patient harm.

How You Can Help

Healthcare providers, IT professionals, coders, and other hospital employees are essential in combating EHR fraud and kickback schemes. If you are aware of electronic healthcare record (EHR) fraud or have been approached with a proposal to commit fraud, you may qualify to serve as a whistleblower. Whistleblowers are protected by the law and can receive a portion of the recovery.

Baron & Budd’s experienced whistleblower representation team has helped numerous whistleblowers achieve a successful resolution in a wide variety of cases under state and federal law. Please call (866) 401-5971 or visit if you want to report EHR fraud.


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