EHR programmer NextGen Healthcare fined $31M for false claims, paid references

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Electronic health record (EHR) vendor NextGen Healthcare Inc. will pay $31 million to settle allegations it misrepresented its software capabilities and paid users for recommendations.

The U.S. Department of Justice (DOJ) announced the settlement with the Nashville, Tennessee-based company, which describes itself as “a leading provider of innovative health care technology solutions.” DOJ claimed the company violated the federal False Claims Act and the Anti-Kickback Statute.

“Electronic health records are an essential part of our health care system,” Principal Deputy Assistant Attorney General Brian M. Boynton said in a news release. Boynton is head of DOJ'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,” Boynton said. “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.”

Allegations

The DOJ complaint claimed the company falsely obtained certification for software, based on the 2014 criteria published by the Office of the National Coordinator of the U.S. Department of Health and Human Services (HHS). That department requires independent testing and certification by laboratories authorized by HHS. NextGen allegedly obtained certification for software by using “an auxiliary product designed only to perform the certification test scripts,” concealing that its EHR “lacked critical functionality.”

When NextGen released that EHR to users, the company “knowingly caused eligible health care providers … to falsely attest to compliance” with requirements of the U.S. Centers for Medicare & Medicaid Services, which made incentive payments to the providers, according to the complaint.

NextGen also allegedly gave credits up to $10,000 to current customers whose recommendations of the software led to new sales. The company also gave other incentives, including tickets to sporting events and entertainment, to induce purchases and references, according to DOJ.

The federal announcement and complaint did not indicate any patients were harmed due to the software use. The time of the allegations was January 2011 to July 2017.

NextGen responds

NextGen Healthcare denied any doing anything illegal in its business operations.

“The company denies that any of its conduct violated the law, and the settlement agreement does not include any admissions of wrongdoing,” said a company statement sent to Medical Economics. “This agreement relates to claims from more than a decade ago. The settlement resolves the matter without monitoring or changes to NextGen Healthcare’s products or compliance policies. To avoid the distraction and expense of litigation, we believe it is in the best interest of the Company to put this historical matter behind us and keep our attention focused on innovating solutions that enable better healthcare outcomes for all.”

Whistleblower provisions

The case originated due to whistleblower provisions of the False Claims Act. Elizabeth Ringold, a nurse practitioner, and Toby Markowitz, a registered nurse, filed the case in November 2018 after using NextGen’s EHR as health workers in the South Carolina Department of Corrections, the complaint said.

Whistleblowers may share in DOJ’s recovery, and in this case Ringold and Markowitz will receive $5.58 million.

The DOJ announcement noted tips and complaints about potential fraud, waste, abuse, and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).