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NextGen (NXGN) Settles Misrepresentation Allegations for $31M
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NextGen Healthcare Inc agreed to pay $31 million to resolve allegations that it has misrepresented certain features of its electronic health record (EHR) software and unlawfully paid users to promote the same, U.S. authorities said on Friday.
The whistleblower lawsuit was filed by Elizabeth Ringold and Toby Markowitz, two clinicians who used NextGen's software for electronic health records at the South Carolina Department of Corrections.
However, the company denied any wrongdoing. The settlement does not include any admissions of liability, a NextGen spokesperson divulged in an email.
Price Performance
NextGen’s shares have lost 9.3% year to date against the industry’s growth of 54.6%. The S&P 500 Index has gained 18.8% in the same time frame.
Image Source: Zacks Investment Research
The Whistleblower Lawsuit
Ringold and Markowitz filed their lawsuit in 2018 under seal. Federal prosecutors joined the case this week and filed their complaint along with the settlement.
Prosecutors argued that NextGen fraudulently obtained a certification in 2014, allowing the providers to get incentive payments from the government for using its EHR software. The company had allegedly claimed that the software has certain capabilities required for the certification, such as recording vital signs and generating clinical summaries. Prosecutors also said that NextGen offered customers up to $10,000 for recommending the product to others, thereby violating the federal Anti-Kickback Statute.
Similar Investigations
NextGen’s settlement is the latest in a series of similar deals between electronic health record companies and Vermont U.S. Attorney Nikolas Kerest, who has recovered more than $400 million in total.
Previous cases in Vermont involving similar allegations have resulted in a $155 million settlement with eClinicalWorks; a $145 million deal with Allscripts Healthcare Solutions Inc's Practice Fusion Inc; a $57.5 million settlement with Greenway Health; and a $45 million deal with Modernizing Medicine Inc.
Recent Developments at NextGen
In June, Associated Urologists of North Carolina (using NextGen’s Enterprise Practice Management) decided to expandthe implementation of NXGN’s technologies to include Enterprise EHR.
In May, the company’s Behavioral Health Suite was chosen by CA-based CHE Behavioral Health to support its growing network. This suite is a comprehensive solution that provides access to a single, integrated physical and behavioral health record to treat patients.
NextGenalso reported fourth-quarter results in the same month. It posted better-than-expected results with a solid uptick in its top line, along with strength in both recurring and non-recurring revenues. However, rising operating costs led to the contraction of the adjusted gross margin.
In April, the company announced that Mindful Care had selected NextGen Behavioral Health Suite to support its short and long-term goals.
Alcon has an estimated long-term growth rate of 14.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.85%.
ALC’s shares have rallied 17.7% year to date compared with the industry’s 5.9% growth.
DexCom has an estimated long-term growth rate of 40.4%. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 15.19%.
DXCM’s shares have risen 11.9% year to date compared with the industry’s 5.9% growth.
Hologic has an estimated earnings growth rate of 4.1% for fiscal 2024. HOLX’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 27.32%.
HOLX’s shares have risen 3.6% year to date compared with the industry’s 5.9% growth.
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NextGen (NXGN) Settles Misrepresentation Allegations for $31M
NextGen Healthcare Inc agreed to pay $31 million to resolve allegations that it has misrepresented certain features of its electronic health record (EHR) software and unlawfully paid users to promote the same, U.S. authorities said on Friday.
The whistleblower lawsuit was filed by Elizabeth Ringold and Toby Markowitz, two clinicians who used NextGen's software for electronic health records at the South Carolina Department of Corrections.
However, the company denied any wrongdoing. The settlement does not include any admissions of liability, a NextGen spokesperson divulged in an email.
Price Performance
NextGen’s shares have lost 9.3% year to date against the industry’s growth of 54.6%. The S&P 500 Index has gained 18.8% in the same time frame.
Image Source: Zacks Investment Research
The Whistleblower Lawsuit
Ringold and Markowitz filed their lawsuit in 2018 under seal. Federal prosecutors joined the case this week and filed their complaint along with the settlement.
Prosecutors argued that NextGen fraudulently obtained a certification in 2014, allowing the providers to get incentive payments from the government for using its EHR software. The company had allegedly claimed that the software has certain capabilities required for the certification, such as recording vital signs and generating clinical summaries. Prosecutors also said that NextGen offered customers up to $10,000 for recommending the product to others, thereby violating the federal Anti-Kickback Statute.
Similar Investigations
NextGen’s settlement is the latest in a series of similar deals between electronic health record companies and Vermont U.S. Attorney Nikolas Kerest, who has recovered more than $400 million in total.
Previous cases in Vermont involving similar allegations have resulted in a $155 million settlement with eClinicalWorks; a $145 million deal with Allscripts Healthcare Solutions Inc's Practice Fusion Inc; a $57.5 million settlement with Greenway Health; and a $45 million deal with Modernizing Medicine Inc.
Recent Developments at NextGen
In June, Associated Urologists of North Carolina (using NextGen’s Enterprise Practice Management) decided to expandthe implementation of NXGN’s technologies to include Enterprise EHR.
In May, the company’s Behavioral Health Suite was chosen by CA-based CHE Behavioral Health to support its growing network. This suite is a comprehensive solution that provides access to a single, integrated physical and behavioral health record to treat patients.
NextGenalso reported fourth-quarter results in the same month. It posted better-than-expected results with a solid uptick in its top line, along with strength in both recurring and non-recurring revenues. However, rising operating costs led to the contraction of the adjusted gross margin.
In April, the company announced that Mindful Care had selected NextGen Behavioral Health Suite to support its short and long-term goals.
NEXTGEN HEALTHCARE, INC Price
NEXTGEN HEALTHCARE, INC price | NEXTGEN HEALTHCARE, INC Quote
Zacks Rank & Other Stocks to Consider
NextGen currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks from the broader medical space are Alcon (ALC - Free Report) , DexCom (DXCM - Free Report) and Hologic (HOLX - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alcon has an estimated long-term growth rate of 14.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.85%.
ALC’s shares have rallied 17.7% year to date compared with the industry’s 5.9% growth.
DexCom has an estimated long-term growth rate of 40.4%. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 15.19%.
DXCM’s shares have risen 11.9% year to date compared with the industry’s 5.9% growth.
Hologic has an estimated earnings growth rate of 4.1% for fiscal 2024. HOLX’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 27.32%.
HOLX’s shares have risen 3.6% year to date compared with the industry’s 5.9% growth.