June 1, 2017

eClinicalWorks to pay $155M in settlement

File Photo
eClinicalWorks is headquartered in Westborough.

Westborough electronic health records software vendor eClinicalWorks and some of its employees will pay a total of $155 million to settle a lawsuit alleging the company misrepresented its software's capabilities and paid $392,000 in kickbacks to certain influential customers in exchange for promotion.

eClinicalWorks and three of its founders, including CEO Girish Navani, are responsible for paying the settlement, according to a Wednesday announcement from the U.S. Department of Justice (DOJ). It is the largest False Claims Act recovery ever in the district of Vermont, said Eugenia Cowles, acting U.S. attorney for Vermont. The company denied any wrongdoing Wednesday.

The case was initially filed as a whistleblower suit in Vermont in May 2015, according to court documents. Brendan Delaney, a former New York City government employee, was implementing an eClinicalWorks electronic health records system for prisoner health care at Rikers Island when he realized the software he was using had some glitches that he thought put patients at risk, according to Phillips & Cohen, the law firm that represented him.

One of his attorneys, Larry Zoglin, said Delaney would often work into the night, documenting problems he came across with the software. He will receive $30 million in the settlement, according to the DOJ.

The federal government and Delaney allege eClinicalWorks falsely obtained a government certification for its electronic health records software so it could be sold to healthcare providers for a lower cost through federal subsidies.

The case represents the first time the government has held an electronic health records vendor accountable for failure to meet federal standards, said Colette Matzzie, a Phillips & Cohen attorney.

"This is a ground-breaking case," said Matzzie.

eClinicalWorks decided to settle to avoid the cost and uncertainty surrounding litigation, according to a press release. The company discontinued its customer referral program, according to the release.

"Today's settlement recognizes that we have addressed the issues raised, and have taken significant measures to promote compliance and transparency," said Girish Navani, CEO and co-founder of eClinicalWorks. "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."

In addition to the money, eClinicalWorks will also have to hire an oversight organization to track its quality control systems and provide written semi-annual reports to the Office of Inspector General at the U.S. Department of Health and Human Services and to the company itself.

The company's software remains certified under the federal program, according to the eClinicalWorks release.

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