In February 2021, CG attorneys wrote about an electronic health record (“EHR”) vendor, Athenahealth, Inc., agreeing to pay $18.25 million to resolve False Claims Act (“FCA”) allegations related to its marketing programs and alleged kickbacks. CG attorneys cautioned readers about the government’s continued focus on EHR companies and marketing programs. Approximately three months later, the U.S. Department of Justice (“DOJ”) announced a second multi-million-dollar settlement with an EHR company regarding allegations of FCA violations involving alleged kickbacks.
On April 30, 2021, the DOJ announced that CareCloud Health, Inc. agreed to pay $3,806,96.70 to settle allegations that it paid illegal kickbacks in exchange for sales of its electronic health record products in violation of the federal Anti-Kickback Statute and the FCA.
According to the DOJ’s press release, CareCloud operated a referral program called the “Champions Program” between January 1, 2012, and March 31, 2017. Through the Champions Program, CareCloud offered and paid clients to recommend CareCloud’s products. Participants in the Champions Program were prohibited from providing negative information about CareCloud’s products to prospective CareCloud clients. CareCloud also paid Champions Program participants cash equivalent credits, cash bonuses, and percentage success payments for recommendations that participants made. Neither CareCloud nor Champions Program participants informed prospective CareCloud clients of the kickback arrangement between CareCloud and Champions Program participants.
According to the press release, the underlying alleged kickbacks rendered false or tainted the claims submitted to the federal government for payment under Medicare and Medicaid Electronic Health Records Incentive Programs.
CareCloud’s settlement resolves a federal lawsuit filed in Florida under the qui tam provisions of the FCA. The FCA’s qui tam provisions provide financial incentives and a procedural structure to whistleblowers – known as relators – so that individuals may bring FCA cases on behalf of the government. If successful, whistleblowers are entitled to 15% to 30% of the money the government recovers based on various factors, such as government intervention. In this case, the whistleblower stands to earn $803,269.97.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and qui tam litigation. If you need assistance with such a matter, please contact us today.