Investigations Newsletter: Health Information Technology Developer to Pay $145 Million to Resolve Kickback Allegations

Arent Fox

DOJ News

Health Information Technology Developer to Pay $145 Million to Resolve Kickback Allegations

In the DOJ’s first-ever criminal action against an electronic health records vendor, San Francisco-based Practice Fusion Inc. agreed to pay $145 million to resolve allegations that it received kickbacks from pharmaceutical companies in exchange for implementing clinical design support alerts in its electronic health records software to increase prescriptions for drugs manufactured by the pharmaceutical companies.

In separate civil settlements, Practice Fusion did not admit liability but agreed to pay a total of $118.6 million to resolve kickback allegations and allegations that it caused its users to submit false claims for federal incentive programs. Practice Fusion also executed a deferred prosecution agreement, agreed to pay over $26 million in criminal fines and forfeiture, and admitted that a major opioid manufacturer utilized its electronic health records software to influence physician prescribing opioid pain medications in exchange for kickbacks.

Under the deferred prosecution agreement, Practice Fusion will invest in an independent oversight organization to create a comprehensive compliance program.

Read the DOJ press release here.

Physician Agrees to Pay $285,000 to Resolve False Claims Act Allegations

A Tennessee family physician, Dr. Chang-Wen Chen, and his practice, Chang-Wen Chen, M.D., P.C., agreed to pay $285,000 to resolve False Claims Act allegations without admitting any liability. According to the government, the physician unlawfully billed Medicare, Medicaid, and TRICARE the physician’s rate for services actually provided by nurse practitioners from 2013-2019.

This case was initiated by a former nurse practitioner at the practice, who filed a lawsuit in 2015 under the qui tam provisions of the False Claims Act. As the whistleblower, the nurse practitioner is entitled to share in the recover, and will receive $51,300.

Read the DOJ press release here.

Our Analysis

Deputy Associate Attorney General Stephen Cox Sheds Light on DOJ’s FCA Priorities at Annual False Claims Act Conference

Deputy Cox emphasized that the FCA continues to be one of DOJ’s most important tools to fight healthcare, grant, financial, and government-contracting fraud.

Last fiscal year, DOJ recovered over $3 billion, $2.6 billion of which “came from suits involving the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.” Last year represented the tenth consecutive year that civil health care fraud settlements and judgments exceeded $2 billion.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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