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What is Electronic Healthcare Records Fraud?
Monday, March 20, 2023

Electronic healthcare records fraud is a serious crossover area of IT and healthcare fraud. Electronic Healthcare Records (EHR), also known as Electronic Medical Records (EMR), can cause serious issues for patients and the healthcare system at large when they malfunction. Just as concerning is a rise in cases involving EHR fraud and misuse of data-driven medical technology.

What Are EHR Systems?

An EHR, or EMR, is a digitized version of a patient's medical chart. In theory, an EHR system offers enormous potential to synchronize medical record keeping and allow patients access to their own data. EHR systems can help medical providers spot patterns that might otherwise go unnoticed and thereby prompt future clinical decision-making. In an ideal world, EHR systems could help streamline medical records and keep people healthier by allowing for an aggregation of sensitive healthcare data.

EHRs and Our Healthcare System

In recent years, at least 94% of American hospitals utilize an EHR or EMR system. EHR systems are most commonly deployed for the following practices:

  • 82% of hospitals report using EHRs to support quality improvement.

  • 81% of hospitals report using EHRs to monitor patient safety.

  • 77% of hospitals use their EHR technology to keep track of their organization's performance over time.

High-risk patients and those at risk of experiencing care gaps can especially benefit from medical institutions that utilize EHR systems.

Why Does the Government Help Fund EHR Systems?

If you've ever changed doctor's offices, lost track of an eyeglasses prescription, or wondered when your last tetanus shot was, electronic health records were designed with your concerns, as well as more serious ones, in mind. However, rural area hospitals and smaller hospitals (characterized as having less than 100 beds) may struggle to afford access to potentially life-saving EHR technology. For this reason, as well as in the interest of improving and streamlining national health, the government helps offset the costs of EHR systems for certain providers.

To date, more than $36 billion of government funding has been invested in helping hospitals and doctors access EHR technology. These "incentive payments" are designed to help offset the initial investment cost of EHR technology. In order to qualify for government-backed incentive payments, hospitals and medical providers must certify that they:

1. Have invested in qualifying EHR technology that meets certain standards

2. Meaningfully use their certified EHR technology

Understanding EHR Fraud, Glitches, and Other Concerns

Non-certified or malfunctioning EHR software pose a serious risk to patients. EHR technology has been criticized in recent years for a series of worrisome glitches that have even led to the deaths of patients. In the worst cases, testing orders have gone astray; prescriptions were mysteriously lost, changed, or subject to non-stop auto-renewal; and endless software bugs meant that meaningful alerts, such as dangerous drug interactions, simply stopped occurring. Proprietary designs by individual EHR vendors have meant that systems may struggle to communicate with each other or fail to allow patients access to their own information. Meanwhile, system errors have proliferated without lasting solutions, leading to a worrying loss of crucial testing results, adverse prescription reaction records, and other critical healthcare data.

Electronic health record providers can be held accountable for providing ineffective, glitchy software if they obtain a fraudulent certification. Knowingly selling faulty EHR technology constitutes fraud if the hospital that purchases it then receives government-backed incentive payments to cover its cost. In this way, EHR scam artists can be brought to justice for the harm they have caused to the American taxpayer, who bankrolled the software's expansion, and the patients whose health depended upon the technology working as intended.

Both medical providers and EHR vendors can be held accountable if they certify for incentive payments from the government in support of EHR technology that does not meet certain minimum standards. Additionally, giving or receiving kickbacks or financial incentive by vendors or medical providers is prohibited in the field of healthcare when it concerns the treatment of patients whose care is wholly or partly covered by government funding, such as Medicare, Medicaid, the VA, and more. One notable 2020 settlement with Practice Fusion Inc involved the push of controlled addictive substances such as opioids to patients via EHR technology. The case ended in an $145 million fraud settlement with the Department of Justice and the company admitting to soliciting and receiving kickbacks from pharmaceutical companies in exchange for using its EHR software to influence physician prescribing.

EHR Fraud and the False Claims Act

Kickbacks, false certifications, and faulty design are not the only concerns around EHR fraud. Additionally, instances of false billing and Medicare/Medicaid fraud have been on the rise as EHR systems are being adopted more widely. Critics assert that the difficult-to-understand and harder-to- use technology has allowed for increased cases of upcoding, unbundling, and other kinds of false or fraudulent billing. When EHR system errors themselves do not result in billing errors, unscrupulous users may be able to conceal fraudulent submissions in the complexity of the software.

The False Claims Act is one of the most powerful tools for blowing the whistle on instances of healthcare fraud and EHR scams. Under this federal law, any entity that makes false claims to the government may be held liable for treble damages (or three times the amount of damages) per false claim, as well as individual penalties assessed according to the rate of inflation. In this way, false EHR certifications can form the basis of successful financial and healthcare fraud claims brought under the False Claims Act.

What to Do if You Suspect EHR Fraud

If you work in the field of healthcare and have information about faulty EHR technology, you may be able to report your concerns to a qui tam attorney. They can escalate your claim and see if you may qualify for a whistleblower reward for your information, as well as substantial protections. Under the federal False Claims Act, whistleblowers cannot be retaliated against by their employers and may also be eligible to receive up to 30% of the overall recovery in the event of a successful lawsuit involving EHR fraud. Further laws such as the Anti-Kickbacks Statute as well as state False Claims Acts may also come into play in cases involving EHR fraud.

If you suspect EHR fraud, whether it involves faulty software, kickbacks, or wrongful billing disguised by the healthcare technology, the right thing to do is to report it. By speaking up, you can protect your own best interests as a whistleblower as well as protect patients who rely upon healthcare IT for their well-being.

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