Watertown Company To Pay $18.25M To Settle Kickback Allegations

WATERTOWN, MA — A Watertown-based company agreed to pay millions to resolve allegations that it was paying illegal kickbacks to generate sales of one of its products.

athenahealth, or Athena, is a Watertown-based developer of electronic health records services. Athena agreed to pay $18.25 million to resolve allegations that it violated the False Claims Act by paying illegal kickbacks to generate sales of its EHR product, athenaClinicals, according to the Department of Justice.

Athena was accused of violating the FCA and the Anti-Kickback Statute through three marketing programs. According to the complaint, Athena paid for prospects and customers to attend paid sporting, entertainment and recreational events. The most lavish of the events, such as “bucket list” trips to the Masters Tournament and the Kentucky Derby, included complimentary travel along with luxury accommodations, meals and alcohol, according to the complaint.

Athena was also accused of paying illegal fees to its customers through its “Lead Generation” program designed to identify new prospective customers. Under the 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, according to the DOJ.

The complaint also claimed Athena entered into deals with competing companies that had decided to discontinue their health information technology products. Pursuant to those agreements, known as “Conversion Deals,” the other companies agreed to refer their clients to Athena, and Athena paid competitors based on the value and volume of practices that were successfully converted into Athena customers, according to the DOJ.

“Across the country, 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,” said United States Attorney Andrew E. Lelling. “We will aggressively pursue organizations that fail to play by the rules; EHR companies are no exception.”

The settlement with Athena also resolves allegations in two whistleblowers lawsuits. Under the qui tam provisions of the False Claims Act, private individuals, known as relators, can sue on behalf of the government for false claims and share in any recovery.

An Athena spokesperson sent Patch a statement that reads:

"athenahealth places the highest priority on compliance with all laws and regulations governing our industry. Our dedicated employees work every day to create a thriving ecosystem that delivers accessible, high quality, and sustainable healthcare for all, through innovative products and services on an interconnected network of more than 160,000 healthcare providers and 100 million patients. We do so 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."