ModMed pays the DOJ $45 million to resolve FCA and kickback claims

The Department of Justice (DOJ) said Tuesday that an electronic health records (EHR) software company had agreed to pay $45 million to resolve false claims allegations that it had received kickbacks and improperly paid providers in an effort to grow its business.

The federal False Claims Act (FCA) and Anti-Kickback Statute were broken by Modern Medicine (ModMed) through three undertakings, according to the DOJ's complaint. The whistleblower, a former vice president at ModMed, will be compensated with a portion of the total amount paid to the federal government, said the DOJ.

According to the complaint, ModMed and Miraca Life Sciences planned to improperly donate ModMed's EHR product to healthcare professionals in order to boost orders.

The DOJ claimed that ModMed users sought and received kickbacks in return for referring Miraca's lab services to their customers.

According to the DOJ, ModMed additionally paid bribes to key individuals in the healthcare sector and professionals who recommended ModMed's products to new clients.

The DOJ claims that illegal bribes and referrals artificially increased sales of ModMed's inferior product.

Hospitals and physicians have been urged by the Department of Health and Human Services (HHS) to switch from paper to EHR systems, and it has offered incentive payments for them to do so if they comply with specific requirements.

According to the DOJ, ModMed knew its device did not meet the requirements even though it was certified.

Despite the ModMed product not truly meeting the criteria for certification, according to the DOJ, it led to healthcare professionals receiving incentives from HHS for using it.

According to the settlement deal, Amanda Long, the former vice president of product management at ModMed, would get $9 million for bringing the lawsuit against the company in Vermont in 2017.

In 2019 Miraca paid $63.5 million to the DOJ to resolve similar claims.

In a statement that was part of the announcement, U.S. Attorney Nikolas Kerest for the District of Vermont claimed that "for too long electronic health record vendors have prioritized only sales."

"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," Kerest said. This resolution, according to Kerest, "reflects the seriousness of the government’s allegations and the determination of the Department of Justice to restore integrity to the (ERH)".

In response, ModMed stated on its website that "the company denies that any of the conduct violated the law and the settlement agreement does not include any admissions of wrongdoing."

According to the business, ModMed decided to settle in order to put an end to it.

"The settlement fully resolves this matter and does not require any changes to ModMed’s products, EHR certifications, existing programs, or compliance policies, and will not require any government monitoring. We have historically made substantial investments in our compliance programs and training and will continue to do so," the business added.

By fLEXI tEAM