CareCloud to Pay $3.8M to Settle Whistleblower Case Alleging Kickbacks

What You Should Know:

– Miami-based EHR company CareCloud has agreed to pay $3.8 million to the federal government to settle a “qui tam” lawsuit filed on behalf of a whistleblower by Phillips & Cohen LLP that alleged CareCloud paid kickbacks to healthcare providers to boost sales of its EHR products.

– The “relator” (whistleblower) in the qui tam lawsuit, Ada de la Vega, was a senior manager at CareCloud who has since left the company and was awarded de la Vega approximately 21% of the settlement, or $803,269.

The whistleblower lawsuit against CareCloud alleged the company violated the Anti-Kickback Statute and the False Claims Act. The False Claims Act prohibits entities from causing the submission of false claims for payment to the federal government.

Alleged EHR Kickback Scheme

The qui tam complaint also alleged that CareCloud’s EHR software had flaws “that not only rendered the system unreliable and unable to meet Meaningful Use [federal] standards, but the flaws also created a risk to patient health and safety.” DOJ did not intervene in those particular claims.

According to the qui tam complaint, CareCloud paid kickbacks to customers who participated in its so-called “Champions Program.” Existing customers signed written agreements with CareCloud to recommend its EHR products to potential customers in exchange for cash payments and cash credits and were expressly prohibited from saying anything negative about CareCloud’s EHR products.

“I filed the qui tam lawsuit because I was hearing concerns from doctors, so I wanted the government to investigate,” de la Vega said. “I was worried about patient safety and believe it is important that companies follow the rules.”

She said she learned that qui tam lawsuits are an effective way to report concerns about EHR systems to the government after she read news stories about a whistleblower lawsuit against eClinicalWorks, another EHR vendor that paid $155 million to the federal government to settle in 2017.

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