Ground-breaking whistleblower case against EHR vendor eClinicalWorks settles for $155M

Whistleblower lawsuit against eClinicalWorks settles for $155 million in ground-breaking case against an electronic health records vendor

BURLINGTON, VERMONT, May 31, 2017 – A whistleblower represented by Phillips & Cohen LLP provided key information to the government that led to eClinicalWorks (eCW) settlement of civil fraud and kickback charges today for $155 million.

“This is a ground-breaking case,” said Colette G. Matzzie, a whistleblower attorney and partner at Phillips & Cohen. “It is the first time that the government has held an electronic health records vendor accountable for failing to meet federal standards designed to ensure patient safety and quality patient care.”

The settlement is a “first” in two other ways: (1) An electronic health records (EHR) vendor is being held accountable for the truthfulness and accuracy of representations made when seeking government certification of its electronic health records system; and (2) The government applied the federal Anti-Kickback Statute (AKS) law to the promotion and sale of EHR systems.

The government’s settlement agreement holds eCW and eCW’s founders and executives Girish Navani, Dr. Rajesh Dharampuriya, and Mahesh Navani liable for payment.  The government today also announced it has reached separate settlements with three eClinicalWorks employees who will pay a total of $80,000 to the government to settle civil allegations.

The whistleblower, Brendan Delaney, was a New York City government employee implementing eClinicalWorks EHR system at Rikers Island for prisoner healthcare when he first became aware of numerous software problems that he alleged put patients at risk.

The government’s complaint joining the “qui tam” (whistleblower) lawsuit alleged that eClinicalWorks:

·         Falsely certified that its EHR met all government criteria

·         Failed to adequately test software before it was released

·         Failed to correct critical and urgent problems and bugs in the software “for months and even years.”

·         Failed to ensure data portability and audit log requirements

·         Failed to reliably record laboratory and diagnostic imaging orders

·         Paid kickbacks totaling at least $392,000 to influential customers to recommend eClinicalWorks products to prospective customers as well as other kickbacks in the form of “consulting” and “speaker” fees

“Accurate and reliable electronic health records are essential to good patient care and safety,” said Matzzie. “The most important outcome of the case is that multiple steps have been taken to alert eClinicalWorks customers, so patients now are better protected.”

eClinicalWorks is the provider of one of the most popular electronic health records software. The privately held company, based in Westborough, MA, says on its website that over 70,000 medical facilities, 115,000 providers and 800,000 medical professionals use its EHR technology.

Both the government and the whistleblower alleged that eClinicalWorks falsely represented to customers that its EHR system complied with federal requirements known as “Meaningful Use” rules.

“Compliance with federal requirements is essential for EHR sales,” said Larry Zoglin, a whistleblower attorney who is Of Counsel to Phillips & Cohen. “Doctors and other healthcare providers can receive federal incentive payments for purchasing EHR technology only if the government certifies that the EHR product they buy meets government standards.”

The incentive program, created by Congress in 2009 to promote the use of EHR, provided payments of up to $43,720 over five years from Medicare to individual healthcare practitioners up until last year. Medicaid incentive payments to individual practitioners can total up to $63,750 over six years until 2021.

Problems that were caused by eClinicalWorks EHR, as alleged in the whistleblower complaint, include:

·         Failure to keep an accurate record of current medications administered to patients

·         Mistakenly Including in a patient’s medical record information from another patient’s record

·         Multiple errors with medication module, including failure to ensure proper dosages, errors with start/stop dates, failure to record changes to medications, duplicate orders for certain prescription drugs, and failure to display current medication at all in some instances

·         Inaccurate tracking of laboratory results

·         Software security problems that undermined the integrity of the medical record

During the government’s investigation of Delaney’s allegations, eClinicalWorks sent out in 2016 a series of advisories to customers, educating them on potential patient safety risks related to use of its EHR.  For instance, a December 2016 notice from eClinicalWorks highlighted a number of risks related to medication management, drug-allergy interactions and updating progress notes with use of its software.  (A list of eCW’s advisories is posted on the Phillips & Cohen website.)

“Brendan Delaney provided the government with information about eClinicalWorks software that became central aspects of the government’s case,” attorney Zoglin said. “He worked tirelessly to document and track the EHR problems, often working until late at night, after a full day at his job. He felt a responsibility to the community at large to get the problems fixed.”

Delaney has worked as a consultant on EHR systems for various hospitals and healthcare providers since he left employment with the City of New York in 2011.

“I was profoundly saddened and disappointed by the indifference of senior health department officials and investigators for New York City when I provided detailed information about serious flaws in the EHR software that could endanger patients,” Delaney said. “I am grateful that Phillips & Cohen and federal government attorneys recognized the seriousness of my charges and dug into the matter quickly and thoroughly.”

The case has been “under seal” – meaning it wasn’t publicly known – since Phillips & Cohen filed the qui tam lawsuit on behalf of Delaney in 2015 in federal district court in Burlington, Vermont.

“The government attorneys and investigators who worked on this case were single-minded in their efforts to protect patients and recover funds for taxpayers,” Matzzie said. “I want to commend the US Department of Justice, the US Attorney’s Office for the District of Vermont and the US Department of Health and Human Services.  Assistant US Attorney Owen Foster’s perseverance and efforts, in particular, were a big reason this case was successful.”

“Brendan Delaney, Phillips & Cohen and the government team collaborated very closely and effectively to build this case and bring it to a successful conclusion,” Matzzie noted.

Former US Attorney Tristram J. Coffin and Eric Poehlmann of Downs Rachlin Martin PLLC served as local counsel in the case.

For more information about the allegations and the settlement, see:

·         The whistleblower’s complaint against eClinicalWorks [US ex rel. Delaney v. eClinicalWorks, LLC, Case No. 15-CV-00095 (D. Vt.)]

·         The government’s complaint in intervention, filed May 12, 2017

·         The settlement agreement with eClinicalWorks

·         The Department of Justice Press release

·         US Attorney’s Office for the District of Vermont press release

About Phillips & Cohen LLP

Phillips & Cohen is the nation’s most successful law firm representing whistleblowers, with recoveries for governments totaling more than $12.1 billion in civil settlements and criminal fines. The firm represents whistleblowers in qui tam lawsuits as well as cases brought under the whistleblower reward programs of the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Internal Revenue Service.