Electronic Health Records Firm to Pay $45M for False Claims

The company allegedly violated the False Claims Act and the anti-kickback statute.

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BURLINGTON, Vt. (AP) — A Florida-based health records company has agreed to pay $45 million to resolve allegations that it improperly generated sales and caused users to report inaccurate information, the U.S. attorney's office in Vermont announced Tuesday.

The government alleges in the civil case that Modernizing Medicine Inc., of Boca Raton, violated the False Claims Act and the anti-kickback statute through three marketing programs that increased its business and that of a laboratory company it was working with.

"Electronic health records serve a critical role in informing physician decision making, and it is therefore essential that healthcare providers select such technology free from the influence of improper financial inducements," Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Department of Justice's Civil Division, said in a news release.

A lawyer for Modernizing Medicine did not immediately return an email seeking comment.

Modernizing Medicine solicited and received payments from the other company in exchange for recommending and arranging that its customers utilize the other company's laboratory services, prosecutors said.

Modernizing Medicine conspired with the other company to improperly donate its health electronic health records technology to health care providers to increase business for itself and the other company, prosecutors said.

Modernizing Medicine made payments to its current health care customers and to other influential sources in the industry to recommend its electronic records, prosecutors said.

The government alleged that Modernizing Medicine caused health care providers to submit false claims for reimbursement to the federal government for pathology services and for incentive payments from the Department of Health and Human Services "for the adoption and 'meaningful use'" of Modernizing Medicine's electronic health records technology.

The settlement resolves allegations filed in Vermont by a former Modernizing Medicine vice president under the whistleblower provisions of the False Claims Act. The former official will receive about $9 million.

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