Earlier this year, the United States Department of Justice (DOJ) announced an $18.25 million settlement with athenahealth, Inc. (Athena), a Massachusetts-based electronic health records (EHR) vendor. The settlement resolves allegations that athenahealth paid illegal kickbacks to generate sales of its EHR product, athenaClinicals.
According to the DOJ and two qui tam lawsuits brought against the company, Athena was responsible for three different marketing programs that violated the federal Anti-Kickback Statute and the False Claims Act.
Concierge Events Program
Under the first alleged program, from June 2014 to April 2018, Athena gave prospective and existing customers free tickets to sporting, entertainment, and other recreational events – including paying for their travel, accommodations, meals and alcohol. Some of the events Athena sent executives, physicians, and other decision makers on were the Masters golf tournament, the Kentucky Derby, the NCAA Final Four games, the Indy 500, and New York Fashion Week. The cost or level of luxury involved in the “Concierge Events” varied depending on the value of the prospect or client. According to the DOJ, Athena tracked wins and losses of practices that attended the Masters and attributed sales to various other events. In internal documents and communications, Athena touted the usefulness of the Masters and other concierge events in its efforts to generate EHR business.
Not only did Athena’s own policies prohibit the payment of kickbacks and other improper business payments/gifts, but some of those who were invited to the Masters and Kentucky Derby told the company they could not attend because the “events did not have a legitimate educational or business purpose.”
Lead Generation Program
From January 2014 to September 2020, Athena also allegedly paid kickbacks of up to $3,000 to existing customers for new client referrals in a “Lead Generation” program. Under the program, current clients classified as “Lead Identifiers” were paid $200 for each meeting Athena held with a prospective client that was referred by them. If the prospective client signed up for athenaClinics, Athena would pay the Lead Identifier an additional payment of $3,000 per doctor for the first ten physicians in the practice, $1,000 per doctor for the next 10 physicians, and $750 per doctor for physicians beyond the first twenty. Athena paid different kickback amounts for ambulatory practices without physicians and inpatient hospital programs as well.
According to the DOJ, Athena closed hundreds of new practices under this program.
Conversion Deals
Under the third program, Athena allegedly entered into agreements and made payments to competing EHR vendors who were discontinuing their EHR technology offerings and referred clients to Athena – a technique the company referred to as “Conversion Deals.” Under the third program, Athena would pay remuneration to the company based on the value of the practices that were converted to paying clients.
DOJ Intervention
By offering and paying the aforementioned remuneration in both cash and in-kind payments in violation of the Anti-Kickback Statute, Athena submitted – and caused EHR clients to submit – false or fraudulent claims to federal health care programs.
When the United States intervened in the case, it combined both qui tam suits into one, alleging that Athena engaged in the above behavior from January 1, 2014, through September 22, 2020.
“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 E. Lelling for the District of Massachusetts. “We will aggressively pursue organizations that fail to play by the rules; EHR companies are no exception.”
Athena Response
According to a spokesperson for AthenaHealth “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. While we have full confidence in our robust compliance policies and programs, we agreed to this settlement—under which we admit no wrongdoing—to put this matter behind us and move forward with our critical work on behalf of patients and healthcare providers.”