eClinicalWorks Faces Additional Fine For Violating Terms Of Fraud Settlement

Posted on August 10, 2018 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

In mid-2017, the news broke that EHR vendor eClinicalWorks had agreed to pay $155 million to settle a whistleblower lawsuit brought by a former employee. The government had accused the company of doctoring its code to cover the fact that its platform couldn’t pass certification testing,

Following the agreement with the government, eCW was hit with two class-action lawsuits related to the certification fraud, one filed by a group of clinicians over funds lost due to the certification and another by patients who say that data display errors may have affected their care.

Unfortunately for eCW, its legal troubles aren’t over. The vendor is now on the hook for a fine it incurred for failing to comply with the Corporate Integrity Agreement it signed as part of its settlement deal. The $132,500 fine probably won’t have a massive impact on the company, but it’s a reminder of how much trouble the certification problem continues to cause.

In signing the CIA, which will be in place for five years, eCW agreed to a number of things, including that it would adhere to software standards and practices, identify and address patient safety and certification issues and meet obligations to existing and future customers. eCW also promised to report patient safety issues in a timely manner.

Apparently, it didn’t do so, and that triggered the penalty stipulated in the CIA. Among the terms buried in the hefty CIA document is that the vendor would be fined $2,500 for each day eCW failed to establish and implement patient safety issues as reportable events. Somehow, the vendor let this go for almost two months. Bummer.

Of course, eCW leaders must be reeling. This has to have been the most painful year in the company’s history, without a doubt. Customers are understandably quite angry with eCW, and some of them are suing. Patients are suing. Its reputation has taken a major hit.

The financial implications of the settlement are staggering too. Very few companies could cover a $155 million payout without a struggle, and even if a business liability insurer is covering the loss, the settlement can’t be good for its relationships with financial institutions. It’s a mess I’d wish on no one.

On the other hand, am I being too harsh when I suggest that under the circumstances, letting a reporting problem go for 53 days doesn’t speak well of eCW’s recovery? Yes, I’m sure that keeping up with CIA requirements has been pretty burdensome, but we’re talking about survival here.

I’m not going to hazard a guess as to whether eCW is on the skids or just struggling to recover from a massive blow to its fundament. But geez, folks. Let’s hope you get on top of these issues soon. Violating the terms of the CIA within year two of the five-year agreement doesn’t exactly inspire confidence.