NextGen Healthcare agreed to pay $31 million to settle allegations that the electronic health record software developer offered kickbacks to attract users, among other alleged False Claims Act violations.
The federal government intervened in a whistleblower lawsuit, originally filed in 2018 in a Vermont federal court, alleging NextGen gave customers tickets to shows and sporting events, as well as credits worth as much as $10,000, to induce purchases and referrals. In the complaint filed alongside the settlement, the government also alleges NextGen falsely certified some versions of its software that couldn’t record vital sign data, create adequate clinical summaries or translate data into medical terms, among other critical functions.
“With this settlement, our office has now resolved five investigations into misconduct by EHR companies, demonstrating our commitment to ensuring that EHR companies are held responsible for their misrepresentations,” U.S. Attorney for the District of Vermont Nikolas Kerest said in a news release.
A NextGen spokesperson said in a statement that the company denies that “any of its conduct that violated the law, and that the settlement agreement does not include any admissions of wrongdoing.”
The Justice Department alleges in the complaint that between January 2011 and July 2017, certain NextGen users purchased its EHR software as a result of kickbacks, and then unknowingly submitted tainted claims for incentive payments under the meaningful use program.
The $31 million settlement accounts for less than 5% of NextGen’s fiscal 2023 revenue of $653.2 million. The whistleblowers—nurses who use the EHR software as healthcare providers for the South Carolina Corrections Department—will receive roughly $5.6 million of the settlement.
The Justice Department continues to crack down on EHR companies that allegedly misrepresent the capabilities of their software or drum up business via kickbacks.
In November, the EHR software developer Modernizing Medicine agreed to pay $45 million to settle allegations that the company provided kickbacks in exchange for referrals and caused users to submit inaccurate claims for federal incentive payments. In January 2020, Practice Fusion agreed to pay $145 million to settle allegations that the company solicited and received kickbacks from a major opioid company in exchange for using its EHR software to boost opioid prescriptions.