Deal Flow

Health IT vendor, eClinicalWorks, pays federal fine of $155 million

In payment to settle lawsuit that alleged its products were faulty and allegedly put patient lives at risk, eClinicalWorks denies any wrongdoing

Image courtesy of the U.S. Department of Justice website

A copy of second page of the original complaint filed in the lawsuit against eClinicalWorks. The case is captioned United States ex rel. Delaney v. eClinialWorks LLC, 2:15-CV-00095-WKS (D. Vt.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.

By Richard Asinof
Posted 6/5/17
In an under-reported news story, last week eClinicalWorks agreed to pay a $155 million federal fine to settle a lawsuit that alleged its software products were faulty, denying any wrongdoing, without admitting any liability. Could Deloitte face a similar kind of federal whistleblower lawsuit on alleged failure to deliver on the functionality of its software system, as advertised?
Do any of the other health IT software systems now in operation in Rhode Island have similar potential liabilities regarding performance? Would health systems in Rhode Island that use eClinicalWorks software products be targets of similar kinds of legal interventions? Is there anyone at the state level that is responsible for monitoring compliance of technology software products employed in Rhode Island? Would this be rolled into future plans to build out the state’s cybersecurity efforts, including protections against the release of personal information through health IT software products? What is the total amount of money invested by health care systems in Rhode Island for health IT software? How much is paid by the health system, and how much is paid by the consumer?
With the explosive growth in personal wearable devices in health IT, the question about who owns the data – and who controls the flow of that data – will become a potential legal issue that may demand new laws to protect the consumer and not just the corporation. When a health IT device is implanted in a knee or hip replacement by a physician, who controls how that data is shared, stored and protected? Will the patient have access to that data in real time, when it is being transmitted? Can the patient refuse to have the device implanted? Does the patient have any rights in terms of what data is transferred to the health insurer?
On the prevention side, imagine if there were a public health database that established all the residences in Rhode Island where children had been poisoned by lead paint in the last 10 years, by community, and that information was made transparent to potential homeowners, renters and city solicitors?

PROVIDENCE – The reality of health care reform in America, however misunderstood by the public, is that the effort to move from value to volume in reimbursements through better management of population health is being driven by the implementation of electronic health records.

In turn, each of the competing health IT vendors has attempted to leverage its ability to capture a greater share of health care marketplace:

Epic, a privately held company with headquarters in Verona, Wisc., says its software holds medical records for 54 percent of patients in the U.S. It is current software of choice for the two largest health systems in Rhode Island, Care New England, Lifespan, and the largest health system in Massachusetts, Partners Healthcare in Boston. It is also the health IT software used by Southcoast Health in New Bedford, Mass.

A competitor, athenahealth, a publicly traded company on NASDAQ, headquartered in Watertown, Mass., has developed a range of cloud-based services, including patient engagement services. In 2015, it purchased the EHR platform developed by Beth Israel Deaconess in Boston.

A third vendor in the competitive mix is eClinicalWorks, a privately held company based in Westborough, Mass., with revenues in 2016 of $440 million, according to the company’s website, which said that its software is used by more than 125,000 doctors and nurse practitioners and 850,000 medical professionals.

The recent $155 million settlement of a federal lawsuit paid by eClinicalWorks has raised questions about the potential liability of health IT software systems about promises that were allegedly not delivered.

Rhode Island, in turn, has its own particular history about a relationship with eClinicalWorks that did not work exactly as planned.

A bad romance
Once upon a time, more than a decade ago, health care leaders in Rhode Island decided to promote a potential health IT solution for physicians, opting to recommend a specific vendor, eClinicalWorks, a privately held firm based in Westborough, Mass., as a preferred choice.

That effort, however, was eventually abandoned a few years later. [See link to ConvergenceRI stories below.]

Fast forward to 2017. On May 31, as reported by Health Data Management, eClinicalWorks decided to pay the government $155 million to settle a False Claims Act lawsuit that contended that its products were faulty.

In its story, Health Data Management reported: “A major vendor of electronic health record systems for physicians, eClinicalWorks, will pay the federal government $155 million to settle a False Claims Act lawsuit contending that its products are faulty.

The settlement is the first of its kind for a health care information technology company facing formal charges that its systems did not help providers achieve objectives of the Meaningful Use program for EHRs and that usability shortcomings put patient lives at risk.

“In addition, the settlement contends that eClinicalWorks paid kickbacks in exchange for promoting its product, which had flaws that could expose patients to potential safety issues.

The plaintiff in the lawsuit, the story continued, was Brendan Delaney, an IT staff worker for New York City who was implementing the software at Rikers Island jail.

“[Delaney] encountered numerous problems with the EHR, its coding and functionality. The suit was filed under the False Claims Act, a federal law that allows people who are not affiliated with the government to file actions against federal contractors claiming fraud against the government. The act of filing such actions is informally called ‘whistleblowing.’ ”

The story continued: “The lawsuit alleged that eClinicalWorks falsely certified that the EHR met all government criteria; that the vendor failed to adequately test software before release; failed to correct critical and urgent problems and bugs for an extended period of time; failed to ensure data portability and audit log requirements; and failed to reliably record lab and diagnostic imaging orders.”

Firm denies any wrongdoing
The company denied any wrongdoing as part of its formal statement on the settlement; eClinicalWorks said it fully cooperated with the Department of Justice civil investigation, according the Health Data Management story.

The story continued: “The claims settled by the agreement are allegations only, and there has been no determination of liability,” the company statement said.

“Although eCW disputed the DOJ’s allegations, it decided to settle to avoid the cost and uncertainty inherent in protracted litigation.”

The company further contended that it consistently tested software prior to release to ensure it met EHR meaningful use requirements, that any certification issues were addressed in accordance with the government’s administrative processes, and it says its software remains certified for use by providers participating in the meaningful use program.

Opening the door to litigation
Fred Bazzoli, the editor in chief at Health Data Management, in an op-ed published  on June 2, called the legal settlement “a jolt to the system” for vendors of electronic health records.

Bazzoli wrote: Granted, the announcement [on June 1] just applied to the terms of the settlement between the federal agency and that one specific vendor. But the impact can be felt more widely, as developers of these systems now see they could be held similarly accountable.”

Further, Bazzoli continued, it was important to acknowledge that as part of the settlement, “eClinicalWorks has denied any wrongdoing in agreeing to the terms, and that the claims “settled by the agreement are allegations only, and there has been no determination of liability.”

Still, Bazzoli argued, “The path to this case and the way in which it was brought should be of concern for vendors. The landmark case perhaps may provide the impetus to ensure that vendors’ EHR functionality is ‘as advertised,’ and it lends significant credence to the importance of user experiences.”

Relevance to Rhode Island
At a time when the state of Rhode Island is still wrangling with Deloitte about problems with the botched rollout of its more than $400 million software system, the question is: does it open the door for similar kind of federal whistleblower lawsuit against Deloitte for alleged failure to deliver on the functionality of its software system, as advertised.


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