EHR vendor athenahealth to pay $18M+ to settle illegal kickback allegations

EHR company athenahealth will pay nearly $18.3 million to resolve allegations that it violated the False Claims Act, though the company denies any wrongdoing.

The vendor engaged in an illegal kickback scheme to increase sales for its EHR platform, athenaClinicals, the Department of Justice said on Thursday. Though athenahealth denies any wrongdoing, it agreed to settle.

The Justice Department claims the company conducted three marketing programs between 2014 and 2020 that violated the False Claims Act and the Anti-Kickback Statute. 

The first involved providing free tickets and amenities to prospective and existing customers for sporting, entertainment and recreational events. These included tickets to the Masters Tournament and the Kentucky Derby. The company also provided luxury accommodations, meals and alcohol, alleges the Justice Department.

Further, athenahealth allegedly paid kickbacks to existing customers through a “lead generation” program. Customers were paid when they referred new prospective clients to the company, the Justice Department claims. They received up to $3,000 for each new client that signed up for athenahealth services.

The Justice Department’s final allegation is that athenahealth entered into deals with vendors that were discontinuing their EHR technology offerings. These deals involved the vendors referring their clients to athenahealth and getting reimbursed based on the value and volume of practices that were converted into athenahealth clients.

The settlement also resolves allegations in two whistleblowers lawsuits. The share to be awarded to the whistleblowers has not yet been determined.

“Across the country, physicians rely on electronic health records software to provide vital patient data. Kickbacks corrupt the market for healthcare services and risk jeopardizing patient safety,” said U.S. Attorney Andrew E. Lelling, in the news release. “We will aggressively pursue organizations that fail to play by the rules; EHR companies are no exception.”

The EHR vendor maintains it is not guilty of the allegations.

“[The company] places the highest priority on compliance with all laws and regulations governing our industry,” said a company spokesperson, who declined to be named, in an email. “While we have full confidence in our robust compliance policies and programs, we agreed to this settlement — under which we admit no wrongdoing — to put this matter behind us and move forward with our critical work on behalf of patients and healthcare providers.”

Further, two of the marketing programs were discontinued before the Justice Department investigation took place because they were not efficient or cost-effective, and the third is in the process of being shut down, she said in a phone interview. The company claims that all three programs complied with guidance from the Department of Health and Human Services.

In 2020, the Justice Department said it collected $1.8 billion from healthcare companies under the False Claims Act, down from $2.6 billion in 2019. One of the largest recoveries last year pertained to health IT developer Practice Fusion Inc., which Allscripts, a competitor of anthenahealth’s, purchased in 2018. Practice Fusion paid the Justice Department $145 million to settle allegations that Purdue Pharma paid it to tweak its EHR software to increase opioid prescriptions.

Photo: Sarinyapinngam, Getty Images 

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