EHR False Claims Act Liability: How a Vendor Causes a Customer’s Claim

EHR False Claims Act liability can reach a software vendor that knowingly causes its customers to submit false claims for federal payment. The connection can run through a certification claim, a calculated measure, or a payment for a recommendation. An engineer may know what the test build concealed. A product manager may know why a favorable calculation stayed in place. The customer submits the claim, but the decision that made it false may sit inside the software company.

How a Vendor Causes a Customer’s Claim

The False Claims Act reaches a business that knowingly causes a false claim to be submitted. That is how a vendor can face a case over money paid to its customers. In the historical EHR incentive programs, providers attested that they used certified technology and met the applicable requirements. The vendor supplied the product, its representations about certification, and calculations the provider used in that attestation.

The evidence has to connect those acts. What capability did the vendor represent? What did the customer rely on? Which attestation or billed service followed, and which federal payment depended on it? A test script and a payment record tell different parts of the story. We connect them through the product version, customer and reporting period.

Knowledge matters at the vendor as well as at the provider. The law also reaches a company that deliberately avoids learning the truth or recklessly ignores whether information is true. Internal discussions about a missing capability or a calculation that overstates performance can show what the vendor understood before the customer claimed payment.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What Does It Mean to Have a Certified EHR?

The certification edition and the software version identify the capabilities at issue. Under the certification program of the Office of the National Coordinator for Health Information Technology, authorized organizations test and certify the technology. The developer chooses and pays them. The Office itself does not perform those tests or issue the certificates.

The historical Meaningful Use requirements tied incentive payments to providers’ use of certified technology. The programs later took the name Promoting Interoperability. That arrangement gives certification a commercial role beyond the test room. The customer needs technology that meets the payment program’s requirements, and the vendor sells a product represented as meeting them. A false representation about a required capability can travel from the certification application into the customer’s incentive claim.

A Vassar College senior thesis from 2022 argues that incentives rewarded rapid adoption more successfully than useful integration into clinical work. Its distinction is sharp:

For the vendor insider, the payment question is more specific still: what did the software have to do for that customer to qualify, and what did it actually do? The certification criteria give that comparison its starting point.

What Is an Example of an EHR False Claims Act Case?

NextGen agreed to pay $31 million in 2023 to resolve allegations that included causing customers to seek EHR incentive payments through false certification representations. The government alleged that NextGen built required functionality into a temporary version of its separate Knowledge Based Model product for certification testing. The software used by providers allegedly lacked capabilities the certification represented it had.

The government’s complaint, filed when it joined the whistleblowers’ case, quoted a manager’s description of the product:

The alleged gaps included recording vital signs correctly, using the required vocabulary for problem lists and family histories, and producing complete care summaries. The settlement agreement connected those representations to customers’ Medicare and Medicaid incentive claims.

In eClinicalWorks, the Justice Department alleged that the vendor typed the 16 drug codes needed for certification testing directly into its software, instead of implementing the ability to retrieve codes from a complete database. Its complaint alleged that customers relied on certification and unknowingly submitted false incentive claims.

Customers were relying on a capability that the government alleged existed only as answers to the test. The developer’s test data and production code can expose that gap before anyone reaches the customer’s billing records.

Practice Fusion agreed to approximately $118.6 million in civil settlements with the federal government and states, covering certification and sponsored-alert allegations. In the certification part of its civil case, the government alleged that the company misrepresented its data-export capability and then disabled access to the feature after obtaining certification. A function shown during testing and a function available during the customer’s reporting period can be different things.

A Known Calculation Error Can Keep Customers Eligible

A vendor’s calculation can become the number a customer uses to claim an incentive payment. The allegations against Greenway show how a decision to leave an error in place can connect software development to a false attestation.

The Justice Department alleged that an earlier version of Greenway’s Prime Suite incorrectly calculated the percentage of office visits for which users distributed clinical summaries. It further alleged that Greenway knew about the error and left it uncorrected so users would keep receiving incentive payments. Greenway’s $57,250,000 settlement covered that alleged calculation error as well as certification and kickback allegations.

The government’s eClinicalWorks complaint quoted an employee confronting a similar denominator problem:

That internal exchange gives the calculation a human decision behind it. The useful comparison is between what the measure required, what the dashboard counted, what the vendor knew, and what the customer reported. A favorable number can help sell the product while leaving the customer to attest to it.

What Are Some Examples of Kickbacks in Healthcare?

EHR kickback cases have involved paid customer recommendations, entertainment, payments for converting competitors’ customers, sponsored clinical alerts and laboratory steering. The Anti-Kickback Statute reaches payments intended to induce recommendations involving federally payable goods or services. In the customer-referral cases, the government connected the inducement to the customer’s federal incentive claims.

Athenahealth agreed to an $18,250,000 settlement over alleged kickbacks through client entertainment, paid leads and payments to companies leaving the health IT business. Those companies allegedly received payments based on the number and value of customers who switched to athenahealth. The government joined the whistleblowers’ qui tam case over those kickbacks. The referral agreement, payment and resulting customer business show how the alleged inducement worked.

The money can also flow into the vendor in exchange for influencing care. Under its deferred prosecution agreement, Practice Fusion admitted soliciting and receiving kickbacks from an opioid company to influence prescribing through its EHR. The Justice Department’s account of the criminal resolution describes marketing-department input into the clinical alert and a sales pitch based on more opioid prescriptions. The vendor sold the sponsor a way into the prescribing decision. The company’s data-export certification allegations belonged to its separate civil resolution.

Modernizing Medicine’s $45 million settlement resolved allegations that included accepting payments from Miraca Life Sciences to recommend its pathology services and provide an exclusive enhanced interface. The government also alleged that the companies used improper EHR donations to increase laboratory orders and software customers. A preferred interface could put the commercial arrangement directly into the clinician’s ordering workflow.

A vendor paying a customer to recommend software and a sponsor paying a vendor to influence clinical decisions leave different agreements, payment records and product decisions to examine.

PenRad Connects a Software Setting to an Unnecessary Service

PenRad agreed to pay $529,069 in December 2025 and admitted facts connecting a risk-calculator setting to medically unnecessary MRIs billed to Medicare and MassHealth, the Massachusetts Medicaid program. This case followed the software’s clinical output into the service billed.

The calculator could account for competing mortality, the risk that a patient would die from something other than breast cancer. Its documentation recommended enabling that setting for clinical use. PenRad knew that recommendation and recommended it internally, but sometimes installed the calculator with the setting disabled and did not consistently tell customers it should be enabled.

At least one customer unknowingly used that configuration. Some patients received elevated risk scores and medically unnecessary MRIs, and providers billed some of those scans to the government programs. The connection ran from the vendor’s knowledge and installation choice, through the customer’s use of the score, to the medical service and claim. Configuration was part of the payment story.

Can Healthcare Providers Be Held Liable for False Claims?

Yes. A health care provider can face a False Claims Act case over its own false incentive attestation. Coffey Health System settled allegations for $250,000 that it falsely attested to conducting or reviewing required security risk analyses. The government’s allegation concerned the provider’s representation about work it had performed.

The vendor can also take a direct role in the attestation. The Justice Department’s account of KPMD’s guilty plea to filing false claims describes an arrangement under which Southwest Regional Medical Center assigned its incentive payments to the software company. KPMD then falsely attested that the emergency room met incentive criteria even as the hospital was closing. The resulting payments went to KPMD.

We examine the vendor’s conduct and the provider’s knowledge separately, including whether the provider relied on information the vendor knew was false.

How EHR Templates Can Support Inflated Billing

EHR billing fraud can run through the clinical note itself. In its 2014 report on EHR billing vulnerabilities, the Department of Health and Human Services Office of Inspector General described how copied notes can carry inaccurate information into a record and lead to inappropriate charges. It also described templates that auto-populate fields or turn a checkbox into extensive documentation, creating apparent support for higher-level services.

For an insider who has seen cloned notes or false template findings used to support upcoding, we examine the link between what the software produced, the care provided and the claim submitted. A longer note can make the bill look better supported without adding any care.

What Evidence Is Needed to Report Fraud?

The evidence we look for connects an internal decision to a customer’s claim. You may recognize a gap between the test build and the version customers used, or an internal discussion about a formula that kept producing favorable numbers. We work with you to connect that product knowledge to the certification representations and customer claims that followed.

You may have seen the commercial side instead: the agreement behind a paid recommendation, or a sponsor’s input into an alert. We examine how that arrangement reached the clinician and the federal payment, with you beside us throughout.

The people who see them work on both sides of the purchase. The eClinicalWorks whistleblower was a software technician at a municipal health agency. NextGen’s whistleblowers were a nurse practitioner and a registered nurse who used its software. Product knowledge can come from building the system or from knowing exactly what happened when someone used it.

Bring Us the Software Decision Behind the Claim

If you know why the tested product differed from the released version, why a measure stayed wrong, or who paid for a recommendation, speak with our whistleblower experts about the customer claims that followed. We work beside you to connect the product decisions, the people who knew and the federal money, and build your strongest EHR whistleblower case. We stay with you through the whole case and bring in health care fraud whistleblower lawyers who understand software evidence.