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Better Luck Next Time, NextGen: Whistleblowers Rewarded Almost $5.6 Million for Reporting EHR Fraud

Date Published
Jul 20, 2023

20 July 2023.  Healthcare technology is supposed to simplify the work of health practitioners. It should be efficient, helpful, and valuable to both the patient and doctor. However, sometimes technology companies go too far in the race for profits, and in doing so, manipulate their products and existing customers. This was the case with NextGen Healthcare Inc., which recently settled a False Claims Act lawsuit with the U.S. Department of Justice for $31 million for electronic healthcare record (EHR) fraud. The two whistleblowers who filed a qui tam lawsuit were healthcare providers working at the South Carolina Department of Corrections. The whistleblowers will receive $5,580,000 or 18% of the government’s recovery.

NextGen allegedly misrepresented the capabilities of certain versions of its EHR software to certification authorities. According to the complaint, the software company allegedly gamed the system by improperly obtaining certification for versions of its software that did not actually meet the requirements of the 2014 Edition certification from the Office of the National Coordinator’s Health IT Certification Program. Specifically, one part of the software fulfilled testing requirements, but the version of the software sold to healthcare providers did not include this compliant portion. The software allegedly lacked the functionality: to collect a patient’s family health history in a standardized way, to create a referral summary, or to electronically record a patient’s vital signs. The snowball effect of this lack of functionality, the government alleged, was that healthcare providers using NextGen’s EHR system falsely certified compliance with the Medicare and Medicaid EHR Incentive Program. The American Recovery and Reinvestment Act of 2009 established the Medicare and Medicaid EHR Incentive Program to encourage health care providers to adopt certified EHR technology, which must be tested and certified by an independent, accredited body. As the U.S. Attorney for the District of Vermont remarked, “Electronic health records play a pivotal role in the provision of safe, effective health care, and the testing and certification process of the EHR Incentive Program was intended to provide assurances to providers that their EHR can perform certain important functions.”

NextGen also allegedly violated the Anti-Kickback Statute by providing credits of up to $10,000, as well as tickets to sporting events and other entertainment, to current customers whose recommendation for the EHR software led to a new sale. This type of arrangement is illegal because it is a bribe to induce customers to encourage others to purchase NextGen’s EHR software, in violation of the Anti-Kickback Statute. When healthcare providers receive remuneration for recommending a certain product or service, their claims for reimbursement from government-funded healthcare programs such as Medicare and Medicaid are considered tainted. Patients’ trust in such providers is also shaken.

The settlement of $31 million is a significant sum, but it should be a lesson for technology companies that they cannot manipulate their products, certification processes, or customers for profits. Healthcare technology may impact patient care and should be treated. This type of fraudulent behavior should be deterred, and whistleblowers who expose it can obtain a financial reward.

If you would like to report EHR fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at

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