athenahealth to Pay $18.2M to Resolve Kickback, False Claims Allegations

Enticements to customers included trips to The Masters, the U.S. Open, the Kentucky Derby, the World Series, the Indianapolis 500, and New York Fashion Week.

athenahealth Inc. will pay $18.2 million to settle whistleblower allegations that the Watertown, Massachusetts-based electronic health records vendor paid kickbacks and lavished "high profile, bucket list" gifts to physicians and other vendors who bought or touted their athenaClinicals EHR platform, the Department of Justice said.

In a complaint filed this week in U.S. District Court in Boston, federal prosecutors said that from January 2014 through September 2020, "athena entertained potential clients with all-expense-paid trips to sporting and recreational events, paid existing clients thousands of dollars for referrals of new healthcare practices, and paid competing vendors that were discontinuing their EHR products to recommend that their clients transition to athenaClinicals."

The enticements included trips to some of the nation's most prestigious sporting events, including The Masters, the U.S. Open, the Kentucky Derby, the World Series, and the Indianapolis 500, and New York Fashion Week.

"Through these kickback schemes, athena caused the Medicaid and Medicare programs to pay millions of dollars in false claims for incentive," DOJ said.

In a statement issued to HealthLeaders, athena said it did nothing wrong, and conducts business "ethically and with integrity—values that are integral to our company's culture." 

"While we have full confidence in our robust compliance policies and programs, we agreed to this settlement—under which we admit no wrongdoing—to put this matter behind us and move forward with our critical work on behalf of patients and healthcare providers," the vendor said.

Prosecutors detailed a three-pronged marketing strategy athenahealth used to reel in clients.

"First, athena allegedly invited prospects and customers to all-expense-paid sporting, entertainment and recreational events. The most lavish of these events, such as "bucket list" trips to the Masters Tournament and the Kentucky Derby, included complimentary travel along with luxury accommodations, meals and alcohol," DOJ said.

Second, athena built a "Lead Generation" scheme that allegedly paid kickbacks to physicians who got colleagues to use athenaClinicals.

"Under this program, athena paid up to $3,000 per physician that signed up for athena services, regardless of how much time (if any) the client spent speaking or meeting with the lead," DOJ said.

Third, athena allegedly colluded with SOAPware, a competing vendor, to steer users of SOAPware's defunct outpatient EHR platform to athenaClinicals.

"Under the deal, Athena obtained client lists and was able to contact SOAPware's clients before other EHR vendors were aware that SOAPware intended to discontinue its offering," the affidavit read.

"Athena also worked with SOAPware to create a solution to migrate client data to athenaClinicals before SOAPware announced that it was terminating its service. SOAPware clients who selected EHR platforms other than athenaClinicals reported significant difficulty in migrating their data to those platforms."

Phillip M. Coyne, special agent in charge for the Office of Inspector General of the Department of Health and Human Services, said "fraudulent activity undermine the integrity of medical decisions, subverts the health marketplace, and waste taxpayer dollars,"

"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," he said.