For nearly a generation, the transition from paper to electronic medical records has been the next big thing in health care.

The theoretical benefits are obvious: improved usability, security, and portability of patient records. Even better, the life-saving abilities of medication, surgical, and critical care checklists are well-known, and nobody is better at checking a checklist than a computer. Electronic health records thus could enable software to do everything from cross-check prescribed medications against patient allergies, ensure that appropriate blood labs are drawn in a timely manner to monitor medication levels and recovery conditions, and even draw inferences about the possible diagnoses of a patient. If computers can use voice-recognition to convert my early-morning dictation into the blog post you are reading right now, surely they can take over the document processing work in medicine, and even give some suggestions about care.

The reality of electronic medical records has been a little more complicated. Doctors hate them. They’re clumsy, confusing, and often unreliable. Hospital administrators and physician office managers hate how expensive they are, dread the challenges of converting their systems, and can’t believe the price of software which is sometimes little more than a glorified version of personal accounting software. So far, they haven’t been proven to help much (PDF study; see one analysis here).

But electronic health records are still be next big thing in medicine, and so Congress and the president, probably with a little help from Cass Sunstein, have tried to "nudge" health care providers into increasing their adoption of electronic health records with the Electronic Health Record Incentive Program:

The Medicare and Medicaid EHR Incentive Programs provide a financial incentive for the "meaningful use" of certified EHR technology to achieve health and efficiency goals. By putting into action and meaningfully using an EHR system, providers will reap benefits beyond financial incentives–such as reduction in errors, availability of records and data, reminders and alerts, clinical decision support, and e-prescribing/refill automation.

The program went live last month. I will leave to the health policy wonks the question of its efficacy; more pertinent to me is the potential for abuse and fraud involving government funds and thus the False Claims Act.

Back when President Lincoln’s signed the first False Claims Act, the government was spending most of its money, of course, fighting the Civil War, and so the FCA was primarily used to combat false claims or false certifications submitted by military contractors.

There’s still plenty of that these days, but the bulk of the government fraud lawsuits arise from the billions of dollars spent every month on health care. There’s a healthy, multi-billion-dollar industry of False Claims Act lawsuits filed against medical and pharmaceutical companies for defrauding Medicaid and Medicare. “Fraud” takes on a whole new meaning when replicated across millions of expensive prescriptions and medical tests.

So it will likely be with the new, multi-billion-dollar industry of government-subsidized EHR, which I think will produce two new types of whistleblower lawsuits.

First, given the sheer size of the electronic health record incentive program, and the unfortunate fact that there are more than a few bad apples in the medical profession, I’m sure we will see more than a few "attestations" for "meaningful use" of electronic health records that are simply false, nothing more than a lazy attempt to get some government dough.

Although the attestation seems like a formality to most people, if someone files a false attestation, that creates up not one but two separate FCA violations: an initial violation for the false claim itself and a secondary violation or the false certification. There will be a tremendous amount of easy money to be made in those false attestations and claims, but if a nurse or administrative staff member or other physician catches on, it could turn into a substantial relator reward for the whistleblower — and a permanent ban on government contracting, including Medicare/Medicaid, for the guilty doctor.

Indeed, just given the complexity of running a medical practice, there’s a good chance that even many good faith of the incentive program claims will not match up with the attestations themselves. As I’ve discussed before, the False Claims Act creates liability for fraud, not for mistakes, but, given how billing mistakes can rapidly escalate and create the appearance of billing fraud, it would not surprise me if the Department of Justice began opening a lot of investigations into individual and group physician practices based on a mismatch between their claim and their attestation. All it takes

Second, there’s that clunky electronic health record software itself. Those software companies frequently receive government subsidies for their programs and are frequently paid with government money for the installation of their programs, after which they, too, have to file a certification and a claim.

Given the opaque manner in which software functions — a user can’t just open up the source code and see how it works — the industry is ripe for abuse, and we have already seen more than a few companies operating in this field selling electronic health record software that is pure snake oil. All you need is a little bit of money to hire a freelance programmer and in two weeks you can slap together software that looks like a real electronic medical record management but which is nothing more than the GnuCash code with a new interface slapped on it, totally and completely inappropriate for use in life and death situations like the delivery of healthcare.

We’ve seen indications that this second form of fraud may be particularly widespread. Through our medical malpractice cases, we’ve seen more than a few instances of grossly malfunctioning medical records software, and are investigating what can be done to nip this problem in the bud before more patients get hurt. The old adage about always making sure your nurses and doctors are working from the correct records seems more important these days; just this morning I heard about an expectant mother at term and ready to deliver nonetheless subjected to magnesium sulfate because the hospital’s system mixed up the patient names on their records.