Friday Enforcement Wrap: Electronic Health Records Company Settles FCA Allegations for $57.25 Million

Headlines that Matter for Companies and Executives in Regulated Industries

DOJ News

Electronic Health Records Company Settles FCA Allegations for $57.25 Million

Greenway Health LLC will pay $57.25 million to settle allegations that it caused users of its software to submit false claims to the government. The American Recovery and Reinvestment Act of 2009 established an incentive program to encourage healthcare providers to adopt electronic health records technology. As part of the program, incentive payments were made available to providers that adopted certified EHR technology and met specific requirements with regard to use of that technology. The government contended that Greenway falsely obtained certification of its 2014 “Prime Suite” product by concealing that the software did not fully comply with the requirements for certification. The government also alleged that Greenway knew its software did not correctly calculate certain provider statistics on patient office visits and thereby caused providers to falsely attest that they were eligible for EHR incentive payments. Greenway was also accused of violating the Anti-Kickback Statute by making payments to client providers to recommend its product to potential new customers. In addition to the $57.25 million payment, Greenway entered into a Corporate Integrity Agreement with the HHS Office of the Inspector General.

Read the press release here.

Pentec Health, Inc. Settles FCA Allegations for $17 Million

DOJ alleged that for more than ten years Pentec Health, Inc. (“Pentec”), a provider of renal and specialized pharmacy compounding services, billed excessive amounts to Medicare and other federal health care programs. The government also alleged that Pentec routinely waived patient copayments and deductibles to induce the prescription and use of the drug Proplete. The settlement not only includes a payment of $17 million, but also required Pentec to enter into a Corporate Integrity Agreement (“CIA”) with the HHS Office of Inspector General. A material breach of the CIA could cause the company to be excluded from federal health care programs. 

Read the press release here.

Falsification of Medical Records Leads to 75-Month Prison Sentence for Physician

Following a conviction by a federal jury on one count of conspiracy to make false statements in connection with federal health care benefits programs and two counts of making false statements, a New England–area physician was sentenced to 75 months in prison and ordered to pay restitution totaling over $1.8 million. The physician and his co-conspirator allegedly conspired to falsify medical records and test results to provide support for claims to Medicare and other insurers for services not actually provided. The falsification of records allegedly included the creation of detailed patient encounter notes for patient visits that never actually occurred. The physician’s co-conspirator was separately sentenced to eight years in prison. 

Read the press release here.

Litigation News

Former Pharmacy Manager Pleads Guilty to Defrauding Hospital of $4.6 Million

The former director of pharmacy services for Children’s Hospital and Medical Center in Omaha, Nebraska pled guilty to submitting false invoices over an eight year period. The former director set up a fraudulent business called RxSynergy and submitted invoices to the hospital for pharmaceuticals and supplies supposedly coming from RxSynergy when no such products were actually provided. The former director submitted at least 227 fraudulent invoices. Some of the invoices were even for a fake drug identified as Broxcilam. Sentencing is set for April and the former director faces the possibility of up to 20 years in prison. She will be ordered to pay restitution of over $4.6 million. The case is U.S. v. Kwapniowski, case number 8:18-cr-00360, in the U.S. District Court for the District of Nebraska.

Judge Rules that Omni Healthcare’s False Claims Act Allegations Against McKesson May Proceed

Omni Healthcare Inc.’s (“Omni”) False Claims Act complaint against McKesson Corp. (“McKesson”) will proceed after a federal judge rejected McKesson’s attempt to dismiss the complaint under the FCA’s first to file bar. The judge ruled that the existence of a similar lawsuit did not bar Omni’s claims because McKesson was not named as a defendant and no facts were alleged that might associate McKesson with the conduct described. At issue in the litigation is a particular cancer drug that drug makers intentionally ship with some excess of the drug in each vial, to ensure that doctors will have the full amount needed for each patient. Omni alleges that McKesson used syringes to remove the excess from each FDA approved vial and then sold that excess separately for a profit. The case is U.S. et al. v. McKesson Corp. et al., case number 1:12-cv-06440, in the U.S. District Court for the Eastern District of New York.


Continue Reading