Health Records Vendor Settles False-claims Lawsuit for $155M

Westborough-based eClinicalWorks, one of the country’s largest vendors of electronic health records will pay a $155 million settlement to resolve allegations it caused health care providers to submit false claims to the federal government, the U.S. Department of Justice and federal prosecutors in Vermont announced May 31.

The acting U.S. attorney for Vermont said eClinicalWorks, of Westborough, Massachusetts, and three executives will pay the settlement to resolve allegations the company misrepresented the abilities of its software and paid kickbacks to some customers in exchange for promoting its products. The company’s CEO is an Indian American executive, Girish Navani.

“Every day, millions of Americans rely on the accuracy of their electronic health records to record and transmit their vital health information,” Acting Assistant Attorney General Chad Readler, of the Department of Justice’s Civil Division, said in statement. “This resolution is a testament to our deep commitment to public health and our determination to hold accountable those whose conduct results in improper payments by the federal government.”
Most of the money will go into federal Medicare and Medicaid funds in Washington, said Eugenia Cowles, acting U.S. attorney for Vermont, who said it was the largest False Claims Act recovery in the district of Vermont.

The case began as a whistleblower lawsuit filed in Vermont by a former employee of the New York City Division of Health Care Access and Improvement. The employee, Brendan Delaney, was implementing the eClinicalWorks electronic health records system at the Rikers Island jail complex when he noticed numerous software problems he alleged put patients at risk, said the Phillips & Cohen law firm, which represented him.

Vermont is among many states that had providers that used the software, prosecutors said. An attorney representing Delaney said they chose to file the lawsuit in Vermont because of the talented team of lawyers in the federal prosecutor’s office. Delaney will receive $30 million from the settlement. Colette G. Matzzie, who represented Delaney, called the case “ground-breaking.”

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