CareCloud Health, Inc. f/k/a CareCloud Corporation (CareCloud), a Miami-based developer of electronic health records (EHR) software products and related services, has agreed to pay $3,806,966.70 to resolve allegations that it paid unlawful kickbacks to generate sales of its EHR products. The United States alleged that CareCloud violated the False Claims Act and the Anti-Kickback Statute through its marketing referral program called the “Champions Program.”
In particular, it is alleged that between January 1, 2012 and March 31, 2017, CareCloud offered and provided its existing clients cash equivalent credits, cash bonuses and percentage success payments to recommend CareCloud’s EHR products to prospective clients. Existing clients who participated in the Champions Program (“participants”) executed written agreements prohibiting them from providing negative information about CareCloud’s EHR products to prospective CareCloud clients. Prospective CareCloud clients were not told about this referral-kickback arrangement or about the contract that prohibited participants from sharing negative company information with them.
The United States alleged that CareCloud’s payments to participants violated the federal Anti-Kickback Statute. In addition, the United States alleged that CareCloud violated the False Claims Act because the kickback payments rendered false the claims submitted by CareCloud for federal incentive payments under the Medicare and Medicaid Electronic Health Records Incentive Programs (also known as Meaningful Use Programs) and the Merit-Based Incentive Payment System (also known as MIPS).
