According to a press release issued earlier this week, EHR provider NextGen Healthcare, Inc., has accrued approximately $35 million to settle a Department of Justice matter. According to NextGen’s prior SEC filings, the company has been under investigation by the United States Attorney’s Office in Vermont since at least 2017 in connection with the certification NextGen obtained for its software under the United States Department of Health and Human Services’ EHR Incentive Program. NextGen previously disclosed that the investigation concerned, “among other things: (a) data used to determine objectives and measures under the Meaningful Use (MU) and the Physician Quality Reporting System (PQRS) programs, (b) our EHR product and its performance, including defects that relate to patient safety or meaningful use certifications, (c) the software code used in certifying our EHR software and information, and (d) marketing programs and payments provided for the referral of EHR business.” According to NextGen, the investigation arose from a False Claims Act qui tam lawsuit filed by a whistleblower.
If the settlement is completed, it will be the fifth significant EHR settlement to come out of the U.S. Attorney’s Office in Vermont. The others are: ECW for $155 million in 2017, Greenway for $57.25 million in 2019, Practice Fusion for $145 million in 2020, and Modernizing Medicine for $45 million in 2022. Three other U.S. Attorney’s Offices also have reached settlements, albeit smaller ones, with EHR vendors.
The stream of EHR settlements suggests that this remains a fruitful area for whistleblower activity. While most of the prior cases have involved certification fraud, some, including apparently the NextGen case, also have involved kickbacks. These kickbacks may include both kickbacks from the EHR vendors to get business from medical providers, and kickbacks to the EHR vendors to get referrals. Kickbacks to the EHR vendors are particularly pernicious, since the physicians and patients who rely on EHR software often don’t realize that outside financial interests may be influencing how private electronic health record information is used and shared, and how the EHR software makes clinical recommendations through so-called Clinical Decision Support (CDS).