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Practice Fusion’s $145M settlement heralds more EHR kickbacks and fraud cases to come

Practice Fusion’s $145 million settlement signals further enforcement against improper & illegal practices in the electronic health records (EHR) industry. Image credit: ccPixs.com/Chris Potter via Flickr - CC by 2.0 Attribution

Practice Fusion’s $145 million settlement with the Department of Justice this week signals that the government is continuing to scrutinize improper and illegal practices in the electronic health records (EHR) industry.

The illegal conduct in the Practice Fusion case, however, is notably different from earlier EHR fraud cases in an important way and may presage a significant new area of fraud involving EHR software and potential False Claims Act liability.

Practice Fusion agreed to pay $118.6 million to resolve allegations that it violated the False Claims Act and pay over $26 million in criminal fines and forfeiture in a case involving kickbacks and false certification of its EHR software.

What’s particularly significant about the Practice Fusion case is that, for the first time, an EHR vendor has been held accountable for allegedly soliciting and accepting payments from third-party medical suppliers to cause increased use of the suppliers’ products through the treatment guidance its software provides to doctors and other healthcare providers.

The EHR vendor admitted it had solicited and received kickbacks from an unnamed major opioid company in exchange for utilizing its EHR software to influence physicians to prescribe that company’s opioid medication. The government also alleged Practice Fusion solicited and received kickbacks from other pharmaceutical companies as well to do the same thing for their prescription medications.

Practice Fusion was able to affect utilization of prescription drugs by adjusting a common feature of EHRs called Clinical Decision Support (CDS), which uses patient-specific data to provide alerts and other guidance to physicians while they treat patients.

Practice Fusion implemented a CDS alert modeled closely on input that it received from the pharmaceutical companies, according to the government. The CDS alert suggested to doctors a treatment option to prescribe opioid medications, even when that treatment did not reflect accepted medical standards.

Practice Fusion admitted, as part of the settlement, that the CDS alert in question had been triggered automatically on EHR screens approximately 230 million times since its rollout and that healthcare providers who received the alert prescribed opioid medications at a higher rate than those who did not.

Practice Fusion “illegally conspired to allow the [opioid] company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care,” said Christina E. Nolan, U.S. Attorney for the District of Vermont, in the government’s press release announcing the settlement.

Reuters has reported that the unnamed opioid company in question is Purdue Pharma, the maker of OxyContin. Purdue Pharma said it is cooperating with all Justice Department investigations of the company.

The case against Practice Fusion, which Allscripts Healthcare Solutions has owned since 2018, demonstrates the government’s continued focus on EHR-related fraud, including improper payments to EHR vendors by pharmaceutical and lab companies, kickbacks to doctors and hospitals for use of EHR software, and certification fraud.

The first False Claims Act settlement by an EHR vendor occurred in 2017, when eClinicalWorks paid the government $155 million to settle a whistleblower case brought by Phillips & Cohen LLP.

The eClinicalWorks settlement covered allegations that the company paid kickbacks to encourage doctors to use its software, falsely certified that its EHR met government criteria and violated the False Claims Act in other ways. The government has since settled similar cases involving EHR software, including a $57.25 million settlement with Greenway Health in 2019.

Practice Fusion’s settlement included the resolution of allegations similar to those in the eClinicalWorks case. The government said Practice Fusion falsely obtained government certification for its EHR software by concealing from its certifying body that its EHR software did not comply with all of the applicable requirements for certification.

More False Claims Act cases involving EHR software are expected. Anyone who is aware of kickbacks to EHR vendors or other issues with EHR software should consult with an experienced whistleblower lawyer who can answer questions based on their circumstances and advise them about their options.

About Phillips & Cohen LLP

Phillips & Cohen is the most successful law firm representing whistleblowers, with recoveries from our cases totaling over $12.3 billion. We have been recognized for our work by numerous national awards. Our attorneys and cases have been in The New York Times, The Wall Street Journal, the Financial Times and other news media. Three of our cases were featured in the CBS series, “Whistleblower.” Phillips & Cohen’s roster includes former federal prosecutors, the first head of the SEC Office of the Whistleblower, a former deputy administrator of the Centers for Medicare and Medicaid Services, the author of a leading treatise on the False Claims Act and attorneys with decades of experience representing whistleblowers.

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