EHR Vendor athenahealth to Pay $18M in Kickback Settlement

The Watertown, Mass.-based electronic health record (EHR) vendor athenahealth has agreed to pay $18.25 million to resolve allegations that it violated the False Claims Act by paying unlawful kickbacks to generate sales of its EHR product, athenaClinicals, the Justice Department announced this week.

In a complaint filed in conjunction with the Jan. 28 settlement, the U.S. alleged that athenahealth violated the False Claims Act and the Anti-Kickback Statute through three marketing programs that played out over a period of six years, from 2014 through 2020.

According to the complaint, one of those programs involved athena entering into deals with competing vendors that were discontinuing their EHR technology offerings to refer their clients to athenahealth. Under such deals, Athena paid remuneration to the competitor based on the value and volume of practices that were successfully converted into athena clients.

What’s more, the health IT vendor invited prospective and existing customers to “concierge events,” providing free tickets to and amenities at sporting, entertainment, and recreational events, including trips to the Masters Tournament and the Kentucky Derby with complimentary travel and luxury accommodations, meals, and alcohol, according to the complaint.

And third, athenahealth paid kickbacks to its existing customers under a “lead generation” program designed to identify and refer new prospective clients to athenahealth. Under this program, the company paid up to $3,000 to existing customers for each new client that signed up for athena services, regardless of how much time, if any, the existing customer spent speaking to or meeting with the new client, according to the allegation.

The complaint’s language specifically read, “Athena knowingly submitted and caused its clients to submit false claims for EHR Incentive Program Payments resulting from athena’s payment of illegal remuneration to hundreds of clients and several EHR vendors throughout the United States, causing Medicare and Medicaid to pay millions of dollars in incentive payments that were not payable.” Indeed, healthcare provider end-users who used athenaClinicals and attested to using certified EHR technology to satisfy the requirements of the EHR Incentive Programs and MIPS (the Merit-based Incentive Payment System) received incentive payments and/or avoided payment reductions through these programs.

In a statement, an athenahealth spokesperson noted, “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.”

Nonetheless, Acting Assistant Attorney General Brian Boynton for the Department of Justice’s Civil Division said in a statement, “This resolution demonstrates the department’s continued commitment to hold EHR companies accountable for the payment of unlawful kickbacks in any form. EHR technology plays an important role in the provision of medical care, and it is critical that the selection of an EHR platform be made without the influence of improper financial inducements.”

U.S. Attorney Andrew E. Lelling for the District of Massachusetts, added, “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. We will aggressively pursue organizations that fail to play by the rules; EHR companies are no exception.”

Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, noted, “If the benefits of EHRs are to be fully realized, patients must be confident providers have selected the most effective system – not the one paying the largest kickbacks. Time and again, we’ve seen fraudulent activity undermine the integrity of medical decisions, subvert the health marketplace, and waste taxpayer dollars.”