NextGen Healthcare agrees to pay USD 31M to settle fraud claims

Electronic health records company NextGen Healthcare Inc has agreed to pay $31 million to settle claims that it misrepresented the capabilities of its software and paid users kickbacks to get them to recommend it, U.S. authorities announced Friday.

The settlement is the latest in a series of similar deals between electronic health records companies and Vermont U.S. Attorney Nikolas Kerest, which have recovered a total of more than $400 million.

It stems from a whistleblower lawsuit brought against the company by Elizabeth Ringold and Toby Markowitz, two clinicians who used NextGen’s software while working for the South Carolina Department of Corrections. The whistleblowers will receive $5,580,000 from the settlement, according to Kerest’s office.

“The company denies that any of its conduct violated the law, and the settlement agreement does not include any admissions of wrongdoing,” a NextGen spokesperson said in an email.

Ringold and Markowitz filed their lawsuit under seal in 2018. Federal prosecutors filed their complaint joining the case this week along with the settlement.

Prosecutors said that NextGen in 2014 fraudulently obtained a certification that allowed providers to receive incentive payments from the government if they used NextGen software. The company falsely represented that its software had certain capabilities required for the certification, including the ability to record vital signs and generate clinical summaries, according to the complaints.

Prosecutors also alleged that NextGen offered customers incentives of up to $10,000 to recommend the product to others, violating the federal Anti-Kickback Statute.

Previous, similar cases in Vermont have resulted in a $155 million settlement with eClinicalWorks; a $145 million deal with Allscripts Healthcare Solutions Inc’s Practice Fusion Inc; a $57.5 million settlement with Greenway Health; and a $45 million deal with Modernizing Medicine Inc.

The case is United States ex rel Markowitz et al v. NextGen Healthcare Inc, Case No. 2:18-cv-195, U.S. District Court, District of Vermont. Reuters