EHR Vendor to Pay $18.25 Million to Resolve Kickback Allegations

The U.S. Department of Justice (DOJ) announced on January 28 that athenahealth Inc., a Massachusetts-based electronic health records (EHR) technology vendor, has agreed to pay $18.25 million to resolve allegations that it paid illegal kickbacks to generate sales of its EHR product, athenaClinicals. The settlement is the government’s latest reminder that marketing initiatives that are common in other industries may violate federal and state law when undertaken by companies in the healthcare field.

Athena implemented three marketing programs that allegedly violated the federal Anti-Kickback Statute and the False Claims Act: The company provided prospective and existing customers with free tickets to sporting, entertainment, and recreational events, including the Masters Tournament and the Kentucky Derby, and paid for their travel, luxury accommodations, meals, and alcohol; it paid kickbacks of up to $3,000 to existing customers for each referral of a new prospective client to Athena; and it made payments to competing EHR vendors who referred their clients to Athena. The programs were described in two separate qui tam lawsuits brought by whistleblowers on behalf of the federal government under the False Claims Act. The whistleblowers and their counsel will be awarded a to-be-determined share of the settlement.

A DOJ lawyer noted in the press release that “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.” A Boston FBI agent added, “It is illegal for companies to extend invitations to all-expense-paid sporting, entertainment, and recreational events, and other perk-filled offers to its prospective customers to win business and boost their bottom line through illegal kickback schemes.” The U.S. Department of Health and Human Services’ Office of Inspector General and other federal agencies assisted in the investigation.