Major EHR Vendor Settles False Claims Act Allegations

Written by: Brittany H. Cone, Esq. and Jordan Johnson, Esq.

Health IT company Athenahealth, a major developer and vendor of electronic health record (EHR) services, agreed to pay over $18 million to settle federal False Claims Act allegations related to purported kickbacks from 2014 to 2020, per a press release from the Department of Justice (DOJ). Specifically, the DOJ alleged that Athenahealth utilized three marketing programs to pay illegal kickbacks to generate sales of its EHR product. The marketing program with the most focus involved invitations to prospective customers and current customers to all-expense-paid sporting, entertainment, and recreational events, often including complimentary travel, luxury accommodations, meals, and alcohol. Such sporting events included the Masters Tournament and the Kentucky Derby. The second marketing program involved the payment of fees to customers through its “lead generation” program in which Athenahealth paid up to $3,000 per physician that signed up for its services, regardless of the amount of time spent speaking or meeting with the lead. The third marketing program in question featured Athenahealth entering into deals with competing companies who were discontinuing their health IT products. In these deals, the other companies agreed to refer their clients to Athenahealth, which then allegedly paid competitors based on the value and volume of practices that were successfully converted into customers.

Of the settlement amount, approximately $9 million is for restitution to the U.S. government. Per the DOJ, by paying illegal remunerations in cash and in kind, Athenahealth both submitted and caused its clients to submit false or fraudulent claims in violation of the Anti-Kickback Statute to federal health care programs. As a part of the settlement, Athenahealth admitted no wrongdoing. Nevertheless, in reaching this settlement, the DOJ could be indicating its focus on the health IT industry going forward due to the possible impact on healthcare services and patient safety.