Kansas Hospital Settles Whistleblower-Based False Attestation Claims

Late last week, a Kansas hospital settled a lawsuit initiated by two whistleblowers alleging that it had falsely attested that it satisfied the requirements for incentive payments under the Medicare and Medicaid Electronic Health Records Incentive Programs. The Incentive Programs—also referred to as “Meaningful Use” programs—provide financial incentives to eligible professionals that show “meaningful use” of certified Electronic Health Records technology. Participants in the programs are required to conduct or review a security risk analysis each reporting period to ensure the privacy and security of their patients’ protected health information. The purposes of the program include improving the quality and coordination of care, while also ensuring adequate privacy protection. Two former employees at Coffey Health System in Burlington, Kansas—its former Chief Information Officer Bashar Awad and compliance officer Cynthia McKerrigan—alleged that the hospital improperly received incentive payments under the program. Specifically, the whistleblowers alleged, the hospital falsely attested that it had satisfied the security risk analysis requirement, when it actually had not. According to a Justice Department press release, Coffey Health System has agreed to pay $250,000 to settle the False Claims Act suit. United States Attorney Stephen McAllister emphasized that his office “remains committed to protecting the federal health programs and to hold accountable those whose conduct results in improper payments.”

The government has pursued similar cases, and in 2017 the Department of Health and Human Services Office of Inspector General reported that “Medicare paid hundreds of millions in electronic health record incentive payments that did not comply with federal requirements.”  

In 2015, the government prosecuted the former Chief Financial Officer of Shelby Regional Medical Center for making false statements to receive Meaningful Use finds.  In that case—U.S. v. White, 6:14-cr-005 (E.D. Tex)—the defendant pleaded guilty, was sentenced to 23 months in prison, and was ordered to pay over $4 million in restitution.

The government investigated and in 2017 entered into a settlement with eClinicalWorks—a large Electronic Health Records software company—in connection with a whistleblower complaint alleging the company had misrepresented its product’s capabilities to Health and Human Services and falsely certified their software’s compliance with statutory requirements. In that case—U.S. ex rel. Delaney v. eClinicalWorks LLC, 2:15-cv-0095 (D. Vt.)—eClinicalWorks agreed to pay $155 million to resolve the claims.

And in 2019, another Electronic Health Records software company—Greenway Health—agreed to pay a $57.25 million to settle False Claims Act allegations. That case—U.S. v. Greenway Health, LLC, 2:19-cv-0020 (D. Vt.)—involved allegations that the company misrepresented its software’s capabilities to the government, and induced new customers to use its software through “unlawful remunerations” in violation of the Anti-Kickback statute. 

In light of these cases, participants in the Electronic Health Incentive Program should actively ensure that:

• They are actually engaging in the “meaningful use” of Electronic Health Records;
• They implement internal procedures to collect and maintain appropriate records;
• Their electronic health records are maintained in HIPAA-compliant privacy systems; 
• Their chosen software is certified by Health and Human Services, and its past performance demonstrates reliability.  

June 5, 2019