The Justice Department alleges Athenahealth provided customers and prospects free tickets to big sporting events, such as the Kentucky Derby and the Masters Tournament, to generate sales. (Getty/designer491)

Health IT company Athenahealth will pay $18.25 million to settle federal False Claims Act (FCA) allegations that it paid sales kickbacks from 2014 to 2020.

The Watertown, Massachusetts-based developer of electronic health record (EHR) services was accused of violating the FCA and the Anti-Kickback Statute through three marketing programs, including providing customers and prospects free tickets to big sporting events, such as the Kentucky Derby and the Master’s golf tournament, the Department of Justice (DOJ) announced in a press release Thursday.

In a complaint filed in conjunction with today’s settlement, the DOJ alleged the company paid illegal kickbacks to generate sales of its EHR product, athenaClinicals, from January 2014 to September 2020.

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The settlement (PDF) with Athenahealth also resolves allegations in two whistleblowers lawsuits. Under the qui tam provisions of the FCA, private individuals, known as relators, can sue on behalf of the government for false claims and share in any recovery.

Of the settlement amount, $9.1 million is restitution to the U.S. government, according to the settlement.

Athenahealth allegedly invited prospects and customers to all-expenses-paid sporting, entertainment and recreational events. The most lavish of these events included complimentary travel along with luxury accommodations, meals and alcohol, the DOJ complaint (PDF) said.

The company also allegedly paid illegal fees to its customers through its “lead generation” program designed to identify new prospective customers. Under this program, Athenahealth paid up to $3,000 per physician that signed up for its services, regardless of how much time (if any) the client spent speaking or meeting with the lead, officials said.

The third program involved Athenahealth entering into deals with competing companies that had decided to discontinue their health IT products, according to the DOJ. Pursuant to those agreements, known as “conversion deals,” the other companies agreed to refer their clients to Athenahealth, which then allegedly paid competitors based on the value and volume of practices that were successfully converted into customers, according to the DOJ press release.

As a result of these kickbacks, the company improperly generated sales for itself while causing healthcare providers to submit false claims to the federal government related to incentive payments for adoption and “meaningful use” of its EHR technology, the DOJ alleges.

“It is illegal for companies to extend invitations to all-expense-paid sporting, entertainment, and recreational events, and other perk-filled offers to its prospective customers to win business and boost their bottom line through illegal kickback schemes,” said Joseph Bonavolonta, special agent in charge of the FBI Boston Division, in a statement. “Today’s agreement by Athena to pay $18.25 million should send a strong message to anyone thinking about engaging in this type of illegal activity. The FBI will continue to work with our law enforcement partners to do everything in our power to safeguard our government health care programs and the taxpayers picking up the bill.”

In a statement provided by an Athenahealth spokesperson, the company said it admitted no wrongdoing.

The company said it has full confidence in its robust compliance policies and programs but decided to “put this matter behind us and move forward with our critical work on behalf of patients and healthcare providers.”

“Athenahealth places the highest priority on compliance with all laws and regulations governing our industry. Our dedicated employees work every day to create a thriving ecosystem that delivers accessible, high quality, and sustainable healthcare for all, through innovative products and services on an interconnected network of more than 160,000 healthcare providers and 100 million patients. We do so ethically and with integrity—values that are integral to our company’s culture,” the company said in a statement.

“Across the country, physicians rely on electronic health records software to provide vital patient data. Kickbacks corrupt the market for health care services and risk jeopardizing patient safety,” said U.S. Attorney Andrew Lelling in a statement. “We will aggressively pursue organizations that fail to play by the rules; EHR companies are no exception.”

The case was handled by assistant U.S. attorneys Jessica Weber, David Derusha and Gregg Shapiro of Lelling’s Affirmative Civil Enforcement Unit along with trial attorneys Nicholas Perros and Andrew Jaco of the DOJ’s Civil Division.

Athenahealth

Source: Athenahealth to pay $18M to settle claims it provided kickbacks to generate EHR sales

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