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Coffey Health System has agreed to a $250,000 settlement with the U.S. Department of Justice to resolve alleged violations of the False Claims and HITECH Acts.

The Kansas-based health system attested to having met HITECH Act risk analysis requirements during the 2012 and 2013 reporting period in claims to Medicare and Medicaid under the EHR Incentive Program.

One of the main aims of the HITECH Act was to encourage healthcare organizations to adopt electronic health records. Under the then named Meaningful Use Program, healthcare organizations were required to demonstrate meaningful use of EHRs in order to receive incentive payments. In addition to demonstrating meaningful use of EHRs, healthcare organizations were also required to meet certain requirements related to EHR technology and address the privacy and security risks associated with EHRs.

In 2016, Coffey Health System’s former CIO, Bashar Awad, and its former compliance officer, Cynthia McKerrigan, filed a lawsuit in federal court in Kansas against their former employer alleging violations of the False Claims Act.

Both alleged Coffey Health System had falsely claimed it had conducted risk analyses in order to receive incentive payments and was aware that those claims were false when they were submitted. As a result of the false claims, Coffey Health System received payments of $3 million under the Meaningful Use program which it did not qualify for.

Awad found no documentation that demonstrated risk analyses had been performed and had personally conducted some basic tests on network security and made an alarming discovery: The health system shared a firewall with Coffey County municipalities. That security failure allowed anyone to login to its system and see patient records from locations protected by the same firewall, including schools and libraries, by using its IP address and logging in. Any attempt to do so required no username or password – A major security failure and violation of the HIPAA Security Rule.

In 2014, Awad arranged for a third-party firm to conduct a risk analysis for the 2014 attestation. The risk analysis revealed several security issues including 5 critical vulnerabilities that had been allowed to persist unchecked. While some attempts were made to correct the issues identified in the risk analysis, Awad was not provided with sufficient resources to ensure those vulnerabilities were properly addressed. He claimed that few of the identified vulnerabilities had been corrected.

When the time came to submit the 2014 attestation, Awad refused to do so as several vulnerabilities had not been addressed. As a result of the failure to support the attestation, Awad was terminated. Awad and McKerrigan then sued Coffey Health System.

Under the whistleblower provisions of the False Claims Act, individuals can sue organizations on behalf of the government and receive a share of any settlement. Awad and McKerrigan will share $50,000 of the $250,000 settlement.

Coffey Health System settled the case with no admission of liability.

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