Southwest Regional Medical Center

Apr 27, 2020

This marks the second EHR vendor this year that will have to pay a hefty fine to the government. April 27, 2020 - An Anaheim, CA-based EHR vendor, KPMD, will pay approximately $1.7 million in restitution after it was caught defrauding the Medicare & Medicaid EHR Incentive Programs, referred to as meaningful use, both established as part of the 2009 American Recovery and Reinvestment Act. The tech company will pay the fine to the federal and the Ohio state programs that it defrauded. In September 2011, KPMD partnered with Southwest Regional Medical Center in Georgetown, Ohio and agreed to implement its EHR software. In return, the health facility agreed to give its government incentive payments from the EHR Incentive Programs to the vendor. Dig Deeper Eventually, KPMD’s CEO purchased the health facility. Following the acquisition, the vendor falsely told the state that the Southwest Regional Medical Center emergency room met all the criteria for the meaningful use payments. However, the hospital was in the midst of closing down. Before getting caught, KPMD was able to wire roughly $1.7 million to its account. Because KPMD was under contract with Southwest Regional Medical Center, it was found to have defrauded the Medicaid EHR Incentive Program . Once the vendor was caught, it agreed to pay full restitution to Medicare and roughly $380,000 to Medicaid. The court says KPMD has already made the restitution payments. KPMD was charged with two counts of filing a false claim and the vendor pled guilty to those charges. This is the second major violation by an EHR vendor this calendar year. Back in January, Practice Fusion was fined a historic $145 million after admitting to a kickback scheme aimed at increasing opioid prescriptions. Practice Fusion admitted that it solicited and received kickbacks from a major, unnamed opioid company in exchange for utilizing its EHR software to manipulate physician prescribing of opioid pain medications. “Practice Fusion’s conduct is abhorrent,” United States Attorney for the District of Vermont, Christina E. Nolan, said in a statement. “During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids.” The Department of Justice said the vendor implemented clinical decision support (CDS) alerts in its EHR software to increase the sales of specific opioids. The pharmaceutical companies “sponsoring” Practice Fusion could design and develop the  CDS alerts . The companies also helped develop guidelines and criteria to generate physician alerts during the treatment process. “The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts,” Nolan continued. “This recovery is commensurate to the nature of Practice Fusion’s misconduct, represents the largest criminal fine in the history of this District, and requires Practice Fusion to admit to its wrongs.”   This marked the first ever criminal action against an EHR vendor. Practice Fusion will be forced to accept responsibility and ensure transparency to its conduct and invest heavily in compliance overhauls. The EHR developer will pay the $145 million fine to settle both the criminal and civil investigations. The company agreed to pay roughly $118.6 million to the federal government and states in separate civil settlements. Overall, Practice Fusion agreed to pay over $26 million in criminal fines and forfeiture. Tagged