EHR Software Company Caught in Illegal Kickback Scheme

Healthcare providers across the country have adopted Electronic Health Record (EHR) technology in their offices in an effort to provide better service to their patients. EHR technology makes it easier to access patients’ records and history, share information between providers, and provide overall better care.

Recently, CareCloud Health, Inc., an EHR software developer, agreed to pay $3.8 million to resolve allegations that it paid illegal kickbacks to generate sales of its EHR software products. The U.S. Department of Justice alleged that CareCloud violated the Anti-Kickback Statute of the False Claims Act by offering kickbacks to currents clients in exchange for new client referrals.

The alleged activity in this case occurred over a five-year period and was reported to authorities when a whistleblower, who worked at the company, came forward and provided details of the scheme. DOJ alleged that CareCloud provided existing clients cash equivalent credits, cash bonuses and percentage success payments to recommend CareCloud’s EHR products to prospective clients. Existing clients who participated in the Champions Program (“participants”) executed written agreements prohibiting them from providing negative information about CareCloud’s EHR products to prospective CareCloud clients. The whistleblower in this case was concerned about patient safety and wanted the government to investigate the potential misconduct by the company. As DOJ said about the settlement, “Product functionality, reliability, and safety should drive a medical software company’s success, not illegal kickbacks paid to promote its products.”

EHR fraud can be dangerous. Doctors and healthcare workers rely on safe, quality EHR software in order to effectively do their jobs. When EHR companies cheat the system and misrepresent the capabilities of their products, patients may be at risk of harm or even death, which is why the Department of Justice has taken a hard stance on holding EHR companies accountable.

Whistleblowers are essential in the discovery and investigation of healthcare fraud. Whistleblowers are protected from retaliation under the False Claims Act and can receive a portion of the recovery as an award for coming forward to report fraud. It is recommended that whistleblowers seek the guidance of an attorney when reporting EHR fraud.

Contact Baron & Budd

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. 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 if you want to report EHR fraud.

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