On July 14, the Department of Justice announced that NextGen Healthcare Inc. agreed to pay $31 million to resolve allegations that the company violated the False Claims Act (FCA). The government alleges that NextGen misrepresented the capabilities of its electronic health record software while simultaneously paying for referrals. Paying to induce referrals for services that are covered by any federally funded healthcare program violates the Anti-Kickback Statute. The government’s allegations include that NextGen gave credits, sometimes worth $10,000, to customers who could generate new sales for NextGen’s health care software. The alleged unlawful payments also came in the form of tickets to sporting and entertainment events to incentivize clients.
The allegations came to light from two whistleblowers, Toby Markowitz and Elizabeth Ringold who were health care professionals at a facility that used NextGen’s software. The whistleblowers filed a civil suit under the qui tam provision of the FCA. Qui tam claims enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery. According to the settlement, Markowtiz and Ringold will receive $5.5 million in this case.
“Electronic health records are an essential part of our health care system” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Every day, millions of patients and health care providers across the country rely on such records to accurately identify and transmit vital health information. The Civil Division is committed to protecting the integrity of the electronic health records software that is available to providers and the process by which they decide which software to select.”
“Electronic health records play a pivotal role in the provision of safe, effective health care, and the testing and certification process of the EHR Incentive Program was intended to provide assurances to providers that their EHR can perform certain important functions,” said U.S. Attorney Nikolas P. Kerest for the District of Vermont. “With this settlement, our office has now resolved five investigations into misconduct by EHR companies, demonstrating our commitment to ensuring that EHR companies are held responsible for their misrepresentations.”
“Medical providers must be able to rely on electronic health records systems to correctly document and process important health data for continuity of patient care,” said Special Agent in Charge Maureen R. Dixon for the HHS, Office of the Inspector General (HHS-OIG). “We will continue to work with our valuable law enforcement partners to evaluate allegations brought under the False Claims Act and ensure the integrity of Medicare programs.”
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA.