EHR vendor settles misconduct lawsuit for $45M

ModMed, a cloud-based EHR vendor for specialty practices, settled a lawsuit from the U.S. Justice Department for $45 million. 

The company was accused of violating the False Claims Act through giving illegal kickbacks to physicians, receiving kickbacks from pathology company Miraca Life Sciences for recommending its lab services, and donating its EHR to providers to generate more lab orders for Miraca and customers for itself. The lawsuit also alleged that ModMed's EHR did not meet HHS' meaningful use standards and caused some users to submit false claims for incentive payments. The Justice Department joined the lawsuit in March.

Law firm Phillips & Cohen first filed the lawsuit in 2017 on behalf of Amanda Long; Ms. Long had resigned as ModMed's vice president of product management that year. The company continues to deny allegations of misconduct, according to a Nov. 1 ModMed news release.

"It is imperative that medical providers be able to trust the health record systems with which they document important and sensitive patient information, and for too long electronic health record vendors have prioritized only sales," U.S. Attorney Nikolas Kerest for the District of Vermont said in a Nov. 1 Justice Department news release. "The government alleges that for years, ModMed, through a variety of schemes, engaged in illegal kickbacks that distorted both the EHR and pathology lab markets, in addition to providing its users with a deficient product. This resolution reflects the seriousness of the government's allegations and the determination of the Department of Justice to restore integrity to the electronic health record field."

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