Health Tech Vendor to Pay $31m After Kickback Allegations

A US provider of healthcare software has agreed to pay $31m to settle allegations it broke the False Claims Act and bribed customers to recommend its products.

NextGen Healthcare fraudulently obtained certification that its electronic health record (EHR) software met US Department of Health and Human Services (HHS) standards, the Justice Department (DoJ) alleged. Under the American Recovery and Reinvestment Act of 2009, the government made payments to healthcare providers to adopt certified EHR technology, in order to spur takeup.

Read more on healthcare prosecutions: Healthcare Company Owners Get Jail Time for $7m Fraud Scheme.

According to the DoJ, NextGen Healthcare’s software was falsely certified in 2014, meaning it was released without certain critical functionality, including the ability to record vital sign data, translate data into required medical vocabularies, and create complete clinical summaries.

The government also alleged in its complaint that the vendor violated the Anti-Kickback Statute by paying customers to make referrals for its products. Recommendations leading to a sale in some cases were rewarded by payments of up to $10,000 and in other cases tickets to sporting and entertainment events.

“Electronic health records play a pivotal role in the provision of safe, effective healthcare, 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 US attorney Nikolas 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.”

The case was built in part on claims made by two whistleblowers who worked at a facility that used NextGen’s software, the DoJ said. They will now jointly receive over $5.5m as a result.