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EHR vendor NextGen Healthcare paying $31 million in False Claims Act settlement

The U.S. contends that NextGen falsely obtained certification for its software and that its EHR lacked required functionality.

Jeff Lagasse, Associate Editor

Photo: Al David Sacks/Getty Images

Electronic health record vendor NextGen Healthcare has agreed to pay $31 million to resolve allegations that it violated the False Claims Act by misrepresenting the capabilities of certain versions of its EHR software, and providing unlawful payment to its users to induce them to recommend NextGen's software, according to the Department of Justice.

In a complaint filed in conjunction with the settlement, the U.S. contends that NextGen falsely obtained certification for its software in connection with the 2014 Edition certification criteria published by the Department of Health and Human Services' Office of the National Coordinator. 

Specifically, the government alleges that NextGen relied on an auxiliary product designed only to perform the certification test scripts, which concealed from the certifying entity that NextGen's EHR lacked critical functionality.

As a result, the government alleges that the EHR NextGen ultimately released to its users lacked certain required functionalities, including the ability to record vital sign data, translate data into required medical vocabularies, and create complete clinical summaries.


The American Recovery and Reinvestment Act of 2009 established the Medicare and Medicaid EHR Incentive Program to encourage healthcare providers to adopt and demonstrate their "meaningful use" of EHR technology. 

Under the program, HHS made incentive payments to eligible healthcare providers that adopted certified EHR technology and met certain requirements relating to their use of the technology. To obtain certification for their product, companies that develop and market EHR technology are required to demonstrate that their product satisfies all applicable HHS-adopted certification criteria; the company must also identify any software components on which their EHR relies to perform the criteria.

Developers must first pass testing performed by an independent, accredited testing laboratory authorized by HHS, and then obtain and maintain certification by an independent, accredited certification body authorized by HHS.

In its complaint, the government also alleges that NextGen violated the Anti-Kickback Statute, which prohibits anyone 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.

The government's complaint contends that, notwithstanding this prohibition, NextGen knowingly gave credits, often worth as much as $10,000, to current customers whose recommendation of NextGen's EHR software led to a new sale. The government alleges that other remuneration, including tickets to sporting events and entertainment, was also provided to induce purchases and referrals.


The civil settlement includes the resolution of claims brought under the qui tam, or whistleblower, provisions of the False Claims Act by Toby Markowitz and Elizabeth Ringold, healthcare professionals at a facility that used NextGen's software. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.  

The whistleblowers in this case will receive $5,580,000.

Twitter: @JELagasse
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