News & Insights


February 8, 2021

Health Headlines – February 8, 2021

Athenahealth Agrees to Pay $18.25 Million to Resolve Allegations of FCA Violations –On Thursday, January 28, 2021, the DOJ announced that electronic health record (EHR) vendor athenahealth, Inc. (Athenahealth) agreed to pay $18.25 million to resolve allegations that it violated the False Claims Act (FCA).  In a complaint filed in conjunction with the settlement announcement, the government alleged Athenahealth employed marketing programs that involved paying illegal kickbacks to push sales of its EHR product, athenaClinicals.

The complaint alleges that Athenahealth ran three problematic marketing programs to generate sales that violated the FCA and Anti-Kickback Statute.  First, according to DOJ, Athenahealth marketers invited customers to all-expense paid events, such as the Masters Tournament and Kentucky Derby, that included travel, accommodations, meals and alcohol.  Second, DOJ alleged that Athenahealth paid fees to existing clients under a “lead generation program” designed to identify new prospective customers, paying up to $3,000 per physician that signed up for its services regardless of how much time the client spent speaking with the “lead.”  Third, the complaint stated that Athenahealth entered into “conversion deals” with competing companies that had discontinued their health information technology products, whereby Athenahealth would pay those competing companies for client referrals based on the value and volume of successfully converted practices.

According to the complaint, Athenahealth improperly generated sales for itself while causing healthcare providers using its EHR product to submit false claims to the federal government when they attested to using a certified EHR product to receive “meaningful use” incentive payments or avoided payment reductions under the HITECH Act incentive programs. 

This is the latest in what has been an ongoing action taken by the Department against EHR vendors, and the Department made a point in its press release to state that EHR vendors would continue to be a focus of FCA and Anti-Kickback enforcement.  Acting Assistant Attorney General for the DOJ’s Civil Division Brian Boynton referred to the settlement as part of “the department’s continued commitment to holding EHR companies accountable for the payment of unlawful kickbacks in any form.”

The release further stresses that “physicians rely on electronic health records software to provide vital patient data.  Kickbacks corrupt the market for health care services and risk jeopardizing patient safety,” quoting U.S. Attorney Andrew E. Lelling.  “If the benefits of Electronic Health Records are to be fully realized, patients must be confident providers have selected the most effective system – not the one paying the largest kickbacks,” said Phillip M. Coyne, Special Agent in Charge for the OIG of the HHS.

Athenahealth has released a statement saying that it admitted no wrongdoing through the settlement. 

The DOJ’s press release can be found on its website here.  A copy of the complaint filed by the U.S. in U.S. v. Athenahealth, Inc., U.S. District Court, District of Massachusetts, Case Nos. 17-cv-12125-ADB and 17-cv-12543-ADB, can be downloaded here, and a copy of the settlement agreement can be downloaded here.

Reporter, Jonathan Shin, Los Angeles, +1 213 443 4334,

King & Spalding Assisting Clients with Mid-Build Denials – Many King & Spalding clients are among the 202 hospitals whose applications for “mid-build” status under the 21st Century Cures Act were denied by CMS.  Many of these denials are based on suspect grounds, and others outright ignore key facts submitted to the agency during the application process.  Some clients have approached us about organizing a coalition to lobby CMS and Congress to rescind these denials.  King & Spalding’s Healthcare and Government Affairs teams have been discussing this issue with major publications and are exploring a coalition strategy.  If your hospital or health system is interested participating in a coalition, please contact Christopher Kenny.

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King & Spalding Vaccine Task Force and Resources – To help healthcare providers navigate the maze of guidance and ever-changing landscape, King & Spalding’s Healthcare team has created a resource for our clients – a Federal and State Survey of COVID-19 Vaccine Updates located here.  We hope that you find this helpful in staying abreast of COVID-19 vaccine status, guidance, laws and regulations, and other legal developments as the vaccine landscape continues to evolve.  Our COVID-19 Vaccine Rollout Task Force is also available to assist on any legal, regulatory, reputational, or other issues that arise for you or your team.