- Electronic health record vendor NextGen Healthcare on Friday agreed to pay $31 million to settle allegations that it violated the False Claims Act by misrepresenting versions of its product and providing illegal incentives to induce referrals to its software, according to the Department of Justice.
- In a complaint filed along with the settlement, the DOJ contends that NextGen improperly sought HHS certification for its software by using an “auxiliary product” designed only to perform the certification, thereby concealing that its product lacked “critical functionality.”
- NextGen also violated the Anti-Kickback Statute by providing “remuneration” to clients — with tickets to sporting events and credits worth up to $10,000 — to incentivize purchases and referrals of NextGen’s software, according to the DOJ.
Despite its agreement to pay the settlement, NextGen denies the charges, according to a company spokesperson.
“The Company denies that any of its conduct violated the law, and the settlement agreement does not include any admissions of wrongdoing,” a NextGen spokesperson wrote in a statement to Healthcare Dive. “This agreement relates to claims from more than a decade ago.”
The FCA is a tool federal prosecutors use to fight healthcare fraud, especially schemes involving improper billing of federal healthcare programs. Insurers, telemedicine companies and providers have been subject to FCA allegations, particularly pandemic-related fraud after government money flowed into the sector during the COVID-19 pandemic.
But interpretation of the FCA has been contentious and the subject of numerous court battles.
Organizations like the American Hospital Association and AHIP have pushed back on the government’s interpretation and enforcement of the FCA, writing in a March joint amicus brief to the Supreme Court that the FCA could threaten “legitimate business activities of every government contractor, hospital, healthcare provider, health insurance provider and grant recipient in the nation.”
In June, SCOTUS ruled that liability under the FCA depends on a defendant’s belief as to whether a healthcare claim was false, rather than what an objective person may have believed.
The ruling settled the standard for determining liability in FCA cases. Now, defendants are liable for claims that they suspect or knowingly believe are false.
Maureen Dixon, special agent in charge for the HHS’ Office of the Inspector General, says the government will continue to protect Medicare programs and ensure that EHR systems correctly document health data.
“Medical providers must be able to rely on electronic health records systems to correctly document and process important health data for continuity of patient care,” Dixon said in a statement. “We will continue to work with our valuable law enforcement partners to evaluate allegations brought under the False Claims Act and ensure the integrity of Medicare programs.”
Other healthcare companies have recently paid the government to settle FCA allegations. Last month, Tenet Healthcare, agreed to pay $29.7 million to the government to settle allegations that it had paid kickbacks to physicians to refer Medicare patients to Detroit Medical Center facilities.
Although rewarding people for referrals in exchange for “remuneration” such as cash, free rent and hotel stays is acceptable in other industries, it’s a crime in federal healthcare programs. The Anti-Kickback Statute prohibits people from “offering or paying, directly or indirectly, any remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.”