February 3, 2021 - Litigation, Regulatory, United States

EHR Vendor Settles Kickback Allegations to the Tune of $18.25 Million

On January 28, 2021, the United States’ Department of Justice (DOJ) announced an $18.25 million settlement with athenahealth Inc. (“Athena”) to resolve allegations that Athena violated the False Claims Act by paying impermissible kickbacks related to its electronic health records (EHR) product. At the center of the DOJ’s complaint was Athena’s use of three different marketing programs, which the DOJ alleges violated the False Claims Act and the Anti-Kickback Statute.

Marketing Programs

In its complaint, the DOJ highlighted three of Athena’s marketing programs, all of which allegedly incentivized the use of Athena’s EHR product in return for cash payments or other luxury amenities. In its “Concierge Events” program, Athena provided key decision-makers at current clients and potential new clients with tickets, travel, and luxury accommodations to events such as the Kentucky Derby and the Masters golf tournament. In a second marketing program, Athena implemented a “Lead Generation” program to find new customers, which provided existing customers with direct payments that varied based on the volume and value of business generated for Athena’s services. In a third marketing program, Athena entered into “Conversion Deals” with competitors that were going out of business. Athena paid these competitors based on the volume and value of the health care practices that the competitor was able to refer and convert from the competitor to Athena’s product.

Compliance Program

DOJ contended that Athena implemented these programs despite having policies and procedures in place that barred the payment of kickbacks and business payments, including a specific policy prohibiting gifts that were “likely or intended to influence a specific decision or deal.” The DOJ’s complaint also alleges that Athena’s internal documents acknowledged the issues with the Concierge Events program. In particular, internal documents referenced recruitment challenges because invitees’ compliance issues would prevent the invitees from accepting an invitation. Further, the DOJ alleges that due to its previous settlement with another EHR vendor due to that vendor’s impermissible referral program, Athena had actual knowledge that its referral program was also impermissible, given the substantial similarities.

The DOJ’s action here shows that it is not enough for companies to have policies and procedures in place, but rather a company’s actions must match what is set forth in its compliance program. Similarly, companies need to be aware of DOJ enforcement actions and adjust their practices in the event the DOJ finds that a similar program violates the Anti-Kickback Statute.

Alleged Anti-Kickback Statute and False Claims Act Violations

The DOJ alleges that the marketing programs described above constituted illegal remuneration under the Anti-Kickback Statute. In turn, these illegal payments caused Athena’s health care provider customers to submit millions of dollars of false claims for payment to Medicare and Medicaid under the Health Information Technology for Economic and Clinical Health Act’s (HITECH) electronic health record incentive program, later replaced by the Merit-based Incentive Payment System (MIPS).

Other EHR DOJ Settlements

This settlement comes on the heels of last year’s $145 million resolution with Practice Fusion, Inc., to resolve criminal and civil investigations related to its EHR software. In that arrangement, Practice Fusion received impermissible kickbacks from pharmaceutical companies in exchange for implementing clinical decision support alerts in its software that prompted health care providers to prescribe the pharmaceutical companies’ drug products. Together, these DOJ actions show that the DOJ will continue to crack down on the provision of incentives that influence health care providers’ decision-making.