Whistleblower lawsuit against Indian-American founded eClinicalWorks settles for $155 million

WESTBOROUGH, MA.– A whistleblower represented by law firm of Phillips & Cohen LLP provided key information to the government that led to eClinicalWorks (eCW ) settlement of civil fraud and kickback charges for $155 million, Phillips & Cohen LLP said in a statement.

eClinicalWorks, founded and headed by Girish Navani, is a privately held healthcare IT solutions firm. Based in Westborough, MA, the company is second largest in the country for e-prescribing.  eClinicalWorks has additional offices in Austin, New York City, Chicago, California, Georgia, London, India, and Dubai. Recently, eClinical was ranked 26th largest private companies in Massachusetts, with 2016 revenue of $444.17 million.

The government’s settlement agreement holds eCW and eCW’s founders and executives Girish Navani, Dr. Rajesh Dharampuriya, and Mahesh Navani liable for payment.  The government today also announced it has reached separate settlements with three eClinicalWorks employees, the statement said.

Girish Navani (Photo courtesy: New York Times)

Navani could not be reached for comment, but Politico reported that eCW  issued a news release in which it denied any wrongdoing. It said the claims settled by the agreement “are allegations only and there has been no determination of liability,” Politico reported. The company decided to settle only to avoid the cost and uncertainty of protracted litigation, it said.

“We are pleased to put this matter behind us and concentrate all of our efforts on our customers and continued innovations to enhance patient care delivery,” Politico quoted Chief Operating Officer Mahesh Navani as saying in the release.

“This is a ground-breaking case,” Colette G. Matzzie, a whistleblower attorney and partner at Phillips & Cohen said in the statement. “It is the first time that the government has held an electronic health records vendor accountable for failing to meet federal standards designed to ensure patient safety and quality patient care.”

The settlement is a “first” in two other ways: (1) An electronic health records (EHR) vendor is being held accountable for the truthfulness and accuracy of representations made when seeking government certification of its electronic health records system; and (2) The government applied the federal Anti-Kickback Statute (AKS) law to the promotion and sale of EHR systems, the statement said.

The whistleblower, Brendan Delaney, was a New York City employee implementing eClinicalWorks EHR system at Rikers Island for prisoner healthcare when he first became aware of numerous software problems that he alleged put patients at risk.

The government’s complaint joining the “qui tam” (whistleblower) lawsuit, which was filed in 2015, alleged that eClinicalWorks:

  • Falsely certified that its EHR met all government criteria
  • Failed to adequately test software before it was released
  • Failed to correct critical and urgent problems and bugs in the software “for months and even years.”
  • Failed to ensure data portability and audit log requirements
  • Failed to reliably record laboratory and diagnostic imaging orders
  • Paid kickbacks totaling at least $392,000 to influential customers to recommend eClinicalWorks products to prospective customers and other kickbacks in the form of “consulting” and “speaker” fees

“Accurate and reliable electronic health records are essential to good patient care and safety,” said Matzzie. “The most important outcome of the case is that multiple steps have been taken to alert eClinicalWorks customers, so patients now are better protected.”

Both the government and the whistleblower alleged that eClinicalWorks falsely represented to customers that its EHR system complied with federal requirements known as “Meaningful Use” rules.

During the government’s investigation of Delaney’s allegations, eClinicalWorks sent out in 2016 a series of advisories to customers, educating them on potential patient safety risks related to use of its HER

“Brendan Delaney worked tirelessly to document and track the EHR problems,” said Larry Zoglin, Of Counsel to Phillips & Cohen. “He felt a responsibility to the community at large to get the problems fixed.”

Delaney has worked as a consultant on EHR systems for various hospitals and healthcare providers since he left employment with the City of New York in 2011.

“I was profoundly saddened and disappointed by the indifference of senior health department officials and investigators for New York City when I provided detailed information about serious flaws in the EHR software that could endanger patients,” Delaney said. “I am grateful that Phillips & Cohen and federal government attorneys recognized the seriousness of my charges and dug into the matter quickly and thoroughly.”

“The government attorneys and investigators who worked on this case were single-minded in their efforts to protect patients and recover funds for taxpayers,” Matzzie said. “I want to commend the US Department of Justice, the US Attorney’s Office for the District of Vermont and the US Department of Health and Human Services.  Assistant US Attorney Owen Foster’s perseverance and efforts, in particular, were a big reason this case was successful.”

Former US Attorney Tristram J. Coffin and Eric Poehlmann of Downs Rachlin Martin PLLC served as local counsel in the case.

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