DOJ Reaches Settlement with Medical Services Contractor Regarding FCA Cyber Fraud Allegations

The DOJ recently reached a $930,000 settlement with a medical services contractor to resolve False Claims Act (FCA) allegations that it falsely represented to the State Department and the Air Force that it complied with contract requirements relating to the provision of medical services at facilities in Iraq and Afghanistan.  According to the DOJ’s press release, this is the DOJ’s first settlement of an FCA case involving cyber fraud since the launch of the Civil Cyber-Fraud Initiative, which WBK first reported here. 

The DOJ alleged that under one contract, the medical services contractor failed to store patients’ medical records in a secure electronic medical record system (EMR), despite an explicit provision in the contract that provided for such secure storage, and despite the government’s payment for the construction of the EMR and its payment for storage of information in the EMR.  The DOJ asserted that it required the EMR to store medical records, including personal identifying information, for U.S. servicemembers, diplomats, officials, and contractors.  The DOJ also alleged that under a second contract, the medical services contractor falsely represented to the State Department and Air Force that certain substances provided under that contract had been approved by the FDA or European Medical Agency.

The settlement is a resolution of two qui tam complaints, and is not an admission of liability by the medical services contractor.