Health IT

eClinicalWorks to pay $155 million to settle false claims suit

eClinicalWorks and some of its employees will pay $155 million to settle claims that the EHR vendor misrepresented the capabilities of its software and paid kickbacks to certain customers in exchange for promoting its product.

gavel and cash money

Westborough, Massachusetts-based EHR vendor eClinicalWorks and some of its employees will pay $155 million to resolve a False Claims Act lawsuit, which claims the vendor falsely said its software met Meaningful Use requirements.

The suit allegations are severe: eClinicalWorks misrepresented the abilities of its software and paid kickbacks of at least $392,000 to specific customers in exchange for promoting its product, according to the U.S. Department of Justice.

In its complaint, the DOJ alleges that eClinicalWorks had an incomplete drug code database and that its software was unable to reliably document diagnostic imaging orders or perform drug interaction tests. The government also cites the vendor’s alleged inability to transfer data from its system to that of other EHR vendors.

eClinicalWorks and three of its founders — CEO Girish Navani, CMO Rajesh Dharampuriya and COO Mahesh Navani — are jointly and severally liable for paying $154,920,000. Additionally, developer Jagan Vaithilingam will pay $50,000 and project managers Bryan Sequeira and Robert Lynes will each pay $15,000.

The lawsuit was filed under the whistleblower provisions of the False Claims Act, but the original whistleblower suit was filed in 2015. Whistleblower Brendan Delaney, a New York City employee, helped install the eClinicalWorks system at Rikers Island.

“I was profoundly saddened and disappointed by the indifference of senior health department officials and investigators for New York City when I provided detailed information about serious flaws in the EHR software that could endanger patients,” Delaney said in a statement.

Delaney, who was represented by Phillips & Cohen, will receive approximately $30 million.

For its part, eClinicalWorks said it did no wrong. In a statement sent to MedCity, the vendor said it chose to settle to avoid the costs and uncertainty that accompany a lengthy litigation.

“Today’s settlement recognizes that we have addressed the issues raised, and have taken significant measures to promote compliance and transparency,” Navani said in a statement. “We are pleased to put this matter behind us and concentrate all of our efforts on our customers and continued innovations to enhance patient care delivery.”

eClinicalWorks’ decision to pay up brings the situation to a close, but the fact remains that this suit is notable.

“This is a ground-breaking case,” Colette G. Matzzie, a partner at Phillips & Cohen, said in a statement. “It is the first time that the government has held an electronic health records vendor accountable for failing to meet federal standards designed to ensure patient safety and quality patient care.”

And it might be a shoutout to other EHR vendors, too. As former ONC head Farzad Mostashari pointed out on Twitter:

Photo: zimmytws, Getty Images