EHR Vendor Hit With $155 Million Fine in Whistleblower Suit

Ken Terry

June 02, 2017

eClinicalWorks (ECW), one of the largest developers of electronic health record (EHR) systems, will pay $155 million to settle a False Claims Act lawsuit alleging that the vendor misrepresented the capabilities of its software and paid kickbacks to certain customers to promote its product, according to the US Department of Justice (DOJ).

Observers say that this case may prompt other developers to pay more attention to their customers' complaints and perhaps to improve the safety of their software.

The federal suit against ECW was brought in the District of Vermont by Brendan Delaney, a software technician formerly employed by the New York City Division of Health Care Access and Improvement. Under the whistleblower provision of the False Claims Act, Delaney will receive $30 million.

The suit alleges that ECW falsely obtained certification for its EHR when it concealed from the certifying body that its software did not comply with the certification requirements. For example, to meet the criteria for the inclusion of standardized drug codes, the company programmed only the 16 drug codes needed for certification, the suit said. In addition, ECW's software did not accurately record user actions in an audit log and in some cases did not reliably record imaging orders or perform drug interaction checks. Moreover, the software did not satisfy data portability requirements to allow healthcare providers to transfer patient data from ECW's EHR to the systems of other developers, the Justice Department said.

In a statement provided to Medscape Medical News, ECW denied any wrongdoing and said it had settled the suit to avoid further litigation. The company said it had conducted appropriate testing to make sure its software met the requirements of the meaningful use EHR incentive program. ECW also noted that its EHR remains certified for use in that program. Finally, it stated that its "customer referral program" was not unlawful but has been discontinued.

As part of the settlement, ECW entered into a 5-year corporate integrity agreement with the Office of Inspector General (OIG) of the Department of Health and Human Services. The agreement requires ECW to hire an outside firm to assess its software quality control systems and to report semi-annually to OIG. In addition, ECW must provide updated versions of its EHR to customers free of charge and must allow customers to have ECW transfer their data to another vendor's EHR without penalties or service charges.

Widespread Problems

The kinds of issues revealed in the ECW case are not unique to that developer but are widespread in the industry, according to some observers.

With regard to the data portability issue, for example, Jeff Smith, vice president of public policy for the American Medical Informatics Association (AMIA), said, "I'd be surprised if ECW was a laggard behind other products." Overall, he told Medscape Medical News, the ECW case "will cause developers and providers alike to revisit the ways in which their systems might be malfunctioning."

Michelle Holmes, an Atlanta-based principal with ECG Management Consultants, told Medscape Medical News that, especially in the first stage of meaningful use, the certification process was rushed because the vendors had little time to rewrite their software and get it certified. "It was inevitable that things would get messed up and the testing that was done wouldn't necessarily uncover some of these issues. In most cases, the issues were unintentional."

In working with certified vendors on client testing and documentation, she noted, "There were times we came across calculations that were incorrect, and documentation that incorrectly described how the calculation was supposed to work. There was a lot of iterative work happening after the vendor was certified to make sure that things were correct and compliant."

AMIA's Smith blamed the EHR certification program itself for some of the issues that led the ECRI Institute to list "information management in EHRs" as its top patient safety concern this year. "It's become clear just how easy it is to game the system of certification," he said.

Holmes acknowledged there are problems with how EHRs are certified. But she noted that certification was never supposed to guarantee that EHRs would function the way they are supposed to. "Providers should never assume that there's not going to be safety errors or other types of issues that are present in the software, regardless of the vendor," she said.

Within the industry, she said, there hasn't been a perception that ECW's product is more error-prone than any other EHR. There have been allegations about ECW having poor quality assurance and testing and "pushing things out that weren't ready for prime time yet," she said. "But those types of characteristics are not unique to ECW."

The Justice Department's decision to settle the ECW case and impose a corporate integrity agreement on the company rather than decertifying its EHR, Smith said, "shows the government wants to work with the industry." On the other hand, as a result of having shown that it plans to enforce the law against EHR developers, the government has created a new system of oversight that didn't exist before, he said.

In Holmes' view, the ECW case should make developers more responsive to their customers' complaints because the providers now know they can take those complaints to the government.

She doesn't foresee that many current ECW clients will switch to another EHR "just because of this DOJ settlement if they're otherwise happy with the software." The corporate integrity agreement should give comfort to its current customers, despite the settlement, she said. But, she added, "ECW will probably have an uphill battle in securing new business."

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