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eCW (eClinicalWorks) Settles Whistleblower Lawsuit for $155 Million

Posted on May 31, 2017 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In many of my press panels and other discussions at the Healthcare IT Marketing and PR Conference, I’ve argued that there’s very little “Breaking News” when it comes to healthcare IT. Today is an example where this is not true. The news just broke that EHR vendor, eCW (eClinicalWorks), has settled a whistleblower lawsuit against them for $155 million.

The suit was filed by Brendan Delaney, a software technician formerly employed by the New York City Division of Health Care Access and Improvement, by his law firm Phillips & Cohen LLP against eClinicalWorks. eClinicalWworks and three of its founders (Chief Executive Officer Girish Navani, Chief Medical Officer Rajesh Dharampuriya, M.D., and Chief Operating Officer Mahesh Navani) are jointly liable for the payment of $154.92 million. Separately, Developer Jagan Vaithilingam will pay $50,000, and Project Managers Bryan Sequeira, and Robert Lynes will each pay $15,000. As a whistleblower, Delaney stands to receive $30 million of the settlement.

Here’s the summary of the complaints against eCW from the Justice Department’s press release about the settlement:

In its complaint-in-intervention, the government contends that ECW falsely obtained that certification for its EHR software when it concealed from its certifying entity that its software did not comply with the requirements for certification. For example, in order to pass certification testing without meeting the certification criteria for standardized drug codes, the company modified its software by “hardcoding” only the drug codes required for testing. In other words, rather than programming the capability to retrieve any drug code from a complete database, ECW simply typed the 16 codes necessary for certification testing directly into its software. ECW’s software also did not accurately record user actions in an audit log and in certain situations did not reliably record diagnostic imaging orders or perform drug interaction checks. In addition, ECW’s software failed to satisfy data portability requirements intended to permit healthcare providers to transfer patient data from ECW’s software to the software of other vendors. As a result of these and other deficiencies in its software, ECW caused the submission of false claims for federal incentive payments based on the use of ECW’s software.

Most people are writing about how eCW didn’t fully integrate the RxNorm codes, but instead hard coded the 16 codes that the certification process used. That’s embarrassing so it’s not a surprise that so many people are sharing that part of the story. However, I think the bigger part of the violation is probably around the data portability requirements. I bet a lot of EHR vendors are sweating right now as they look at the way they implemented those requirements. Not to mention the EHR audit logs which are poor in many EHR. Plus, the scariest claim is eClinicalWork’s inability to reliably record diagnostic imagine orders or perform drug interaction checks. Those are patient safety issues and exist in many EHR software.

If you want to dig into the weeds like I did, then you can see the government complaint against eClinicalWorks that was filed May 12, 2017 and the final settlement agreement with eClinicalWorks. Even more insightful was looking at the original complaint from Delaney against eClinicalWorks. Comparing the original whistleblower complaint to the government complaint against eClinicalWorks is very interesting. You’ll see that the government didn’t grab on to everything that was originally filed by Delaney. I imagine that’s a standard legal practice to file as many areas as possible and see what the government decides to use. It seems like Phillips & Cohen have represented a number of whistleblowers so I’m sure they were expert at this.

Girish Navani, CEO and Co-Founder or eClinicalWorks, offered this statement about the settlement:

“Today’s settlement recognizes that we have addressed the issues raised, and have taken significant measures to promote compliance and transparency. We are pleased to put this matter behind us and concentrate all of our efforts on our customers and continued innovations to enhance patient care delivery.”

Looking at the bigger picture, I’m certain that every EHR vendor is going through their EHR certification process and looking at all the statements they’ve made to make sure they’re not going to be in a similar situation. Not to mention the anti-kick back laws that were mentioned in the settlement. I’m sure there are other EHR vendors that are in violation of both of these items just as much as eCW.

Former ONC National Coordinator, Farrzad Mostashari seems to agree with me. Farzad tweeted, “Wow!! I hope this changes the attitude of the EHR vendor space more broadly.” Then, he later tweeted, “Let me be plain-spoken. eClinicalWorks is not the only EHR vendor who flouted certification /misled customers
Other vendors better clean up.”

Farzad then nailed it when he tweeted “There are a LOT of doctor’s office staff looking at their EHR today and wondering if there’s $30M worth of false promises hidden there”

I do wonder if Farzad Mostashari feels a little guilty of the role he played in this process since he oversaw such a porous EHR certification process. I’ve been against EHR certification for a long time because I thought it provided so little value to providers. The fact that it can be gamed by 16 codes being hard coded is a perfect example of why EHR Certification is a waste. Although, one could argue that without EHR certification, this suit would have never happened and maybe eClinicalWorks could still be selling the same product today.

I do find this quote from the US Attorney’s Office for the District of Vermont press release a little over the top (which I think is common on these things):

“Electronic health records have the potential to improve the care provided to Medicare and Medicaid beneficiaries, but only if the information is accurate and accessible,” said Special Agent in Charge Phillip Coyne of HHS-OIG. “Those who engage in fraud that undermines the goals of EHR or puts patients at risk can expect a thorough investigation and strong remedial measures such as those in the novel and innovative Corporate Integrity Agreement in this case.”

Another topic I haven’t seen anyone else cover is the impact that this settlement will have on eCW’s customers that used eCW to attest to meaningful use. Technically it shows that eCW wasn’t appropriately certified, so that means that they weren’t using a certified EHR and therefore shouldn’t have been eligible for meaningful use incentives. I asked one friend about this and he suggested that CMS had previously said that it would not hold eligible providers and eligible hospitals responsible for EHRs that calculated the meaningful use measures the wrong way. So, we’ll probably see this same approach with eCW users that got EHR incentive money on what we now know was not appropriately certified.

I was also intrigued by the Corporate Integrity Agreement (CIA) that eClinicalWorks entered into with HHS-OIG. There are a lot of details and oversight that eCW will get from OIG, but it also required eClinicalWorks to “allow customers to obtain updated versions of their software free of charge and to give customers the option to have ECW transfer their data to another EHR software provider without penalties or service charges. [emphasis added]”

Free updates is pretty clear and ironic since not wanting to update all their clients is one possible hypothesis for why they didn’t really push the proper upgrades. Hopefully all eCW users will do it now or they might be facing their own violations for using outdated software that has known clinical issues. However, the kicker in the CIA detail above is that eClinicalWorks has to give customers the option to have eClinicalWorks transfer their data to another EHR without penalty or service charges. I wonder how many will take them up on this requirement and what the details will be. I still wish this was required of all EHR vendors, but that’s a story for another day.

How many EHR vendor marketing groups are putting together their eClinicalWorks Rescue Plan to take in the downtrodden eCW users? I’m not sure these will be as successful as other EHR switching marketing efforts like those we see when an EHR is being shut down.

I’m sorry to say that I think this is likely only the beginning of such lawsuits. In fact, it’s probably already woken up a lot of potential whistle blowers. Hopefully it’s woken up a lot of EHR vendors as well.

Never Sell Your EHR Company – According to eCW Founder

Posted on January 16, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I recently came across an interesting article in Entrepreneur magazine authored by Girish Navani, CEO and Co-founder of eClinicalWorks. If you read this site, you know doubt are familiar with the quite popular eCW EHR software. In this article Girish gives some interesting insight into the future of eCW as a company:

After grad school, I set out to create my own version of my father’s bridge. After working many odd jobs developing software, I created credit check software for an acquaintance’s business. This made him a lot of money, which prompted me to ask (perhaps naively) for a share of the profit. I had developed a very successful facet of the company – didn’t I deserve it? His response surprised me, but I will never forget it. He said, “If you build something you like, don’t sell it.”

Twenty years later, I still remember my acquaintance’s advice. For that reason, my company, eClinicalWorks is, and always will be, a privately-held company. I have no interest in selling it, regardless of any offer I may get. In addition, we don’t use investor cash or spend money we don’t have.

This is not a philosophy that is unique to eCW. #1 on Epic’s list of principles is “Do not go public.” I imagine that Judy Faulkner (CEO of Epic) has a somewhat similar philosophy to Girish. There are certainly a lot of advantages to not going public and most of them get down to control. I’ll never forget when I heard one of the Marriott children talk about their decision to stay a private company. He said that Marriott would likely be a lot bigger if they had become a public company, but they would have lost a lot of the company culture if they’d chose to do so.

I imagine this is a similar feeling that Epic and eCW share. However, there’s also some accountability that comes with being a public company as well. It’s not easy for an organization to assess the financial well being of a private company. During the golden age of EHR which we just experienced, that hasn’t been an issue for either eCW or Epic. However, as we exit this golden age of EHR that was propped up by $36 billion in government stimulus money, the financial future may be quite different.

As in most things in life, there are pros and cons to staying private or going public. It’s interesting that two of the major EHR players (eCW and Epic) have made it clear that they have no interest in ever going public. We’ll see how that plays out long term.