Defective EHRs suffer little in fraud probes: 'They're almost too big to fail'

EHR software vendors and healthcare providers have consistently overstated the abilities of their medical records software in order to receive undeserved millions in government subsidies, according to an investigation by Fortune and Kaiser Health News.

Here are nine takeaways from the investigation:

1. Government incentives were set aside as part of 2009's HITECH Act, which encouraged the implementation of EHR systems to improve efficiency, make patients' health records more easily accessible and foster data-sharing between healthcare organizations. As of September 2018, CMS had paid out subsidies collectively totaling around $38 billion.

2. Subsidies were awarded based on specific meaningful use criteria outlined to vendors and providers ahead of time, government reviewers told Fortune and KHN, so they were able to "game" the system by superficially programming software to seemingly meet those criteria without actually being operational. Three vendors have struck settlement deals, totaling $357 million, with the U.S. Department of Justice over allegations of these fraudulent practices, and at least two others are currently under investigation.

3. John Halamka, MD, newly named president of Rochester, Minn.-based Mayo Clinic's digital health and analytics efforts and former chair of the ONC standards committee behind the certification rules, defended the process. "The only problem [with certification] is that it presupposed that the product the vendor certified would be the same product they sold," Dr. Halamka told the news outlets. "It presupposes that people will go into the certification process and participate in good faith."

4. The ONC also said in a statement that it takes steps to ensure medical software systems "are safe for patients and usable by providers."

5. Beyond barely meeting mandated criteria, some software had even deeper and more potentially dangerous flaws, the investigation found. One EHR specialist-turned-whistleblower from Franklin, Tenn.-based Community Health Systems told the outlets physicians worried their Medhost-developed EHR system failed to track some drug prescriptions and dosages properly, presenting a "huge safety concern."

6. Several meaningful use lawsuits have subsequently been filed by whistleblowers, physicians and hospitals against their organizations and software vendors. One such 2018 suit alleges that CHS covered up dangerous software flaws in more than 120 hospitals, resulting in its receiving millions of dollars in federal subsidies, and that Medhost also concealed defects during government safety reviews. CHS has since said the allegations are "without merit"; DOJ lawyers reportedly wrote in November court filings that the matter is still under investigation.

7. Furthermore, Fortune and KHN found that hundreds of millions of dollars in subsidies went to hospitals and physicians that did not show any evidence at all of meeting the required criteria: Almost 28 percent of physicians and 5 percent of hospitals that attested to having met government standards ultimately failed audits.

8. The government has rescinded approximately $941 million in improper subsidies, officials told the outlets. Additionally, the ONC has revoked certification from about 100 pieces of previously approved software products, and another 132 have reportedly been flagged for corrective action due to "non-conformities." 

9. However, much of the technology that was allegedly certified fraudulently is still used by healthcare organizations around the U.S., due in large part to the immense cost and effort required to switch EHR vendors. "ONC does seem to have a stance that removing some of these players from the market would be very disruptive," Brad Ulrich, a Tennessee-based health IT expert, told the outlets. "They are almost too big to fail."

Read Fortune and KHN's full investigation here.

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