EHR Vendor Practice Fusion Settles Opioid Kickback Case for $145M

Ken Terry

January 29, 2020

Practice Fusion, a San Francisco-based electronic health records (EHR) vendor and a subsidiary of Allscripts, has agreed to a $145 million settlement with the federal government to resolve allegations that it took kickbacks from an opioid drug maker and other pharmaceutical companies in return for creating clinical decision support (CDS) tools that promoted those companies' drugs at the point of care.

The settlement includes a criminal fine of $25.4 million and the forfeiture of nearly $1 million in illegal proceeds, according to a US Department of Justice (DOJ) press release. This is the first-ever criminal action against an EHR vendor, the release said.

The agreement also settles a civil suit against Practice Fusion for $118.6 million, including $113.4 million to the federal government and up to $5.2 million to states that opt to participate in separate agreements. Besides the illegal kickbacks from drug companies, the civil agreement also covers multiple instances in which Practice Fusion misrepresented the features of its EHR so that its users could attest to using a certified EHR required for "meaningful use" incentive payments, according to the release.

Under the overall settlement, Practice Fusion admits that the criminal charges against it are true and agrees to post documents related to its misconduct on a website. The DOJ said "the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims."

As part of the resolution of the criminal case, Practice Fusion acknowledges that it solicited and received kickbacks from a major opioid company in exchange for using its EHR to influence physician prescribing of opioid pain medications. "Practice Fusion solicited a payment of nearly $1 million from the opioid company to create a CDS alert that would cause doctors to prescribe more extended release opioids," the Justice Department news release said.

Besides the fine and forfeiture, the company must retain an independent oversight organization that is required to review and approve any "sponsored CDS" before Practice Fusion can implement the CDS software. It also has to create a "comprehensive compliance program" to prevent future similar abuses.

The civil settlement covers not only Practice Fusion's kickback deal with the opioid company, but "also resolves allegations of kickbacks relating to thirteen other CDS arrangements where Practice Fusion agreed with pharmaceutical companies to implement CDS alerts intended to increase sales of their products."

"In exchange for 'sponsorship' payments from pharmaceutical companies," the Justice Department noted, "Practice Fusion allowed the companies to influence the development and implementation of the CDS alerts in ways aimed at increasing sales of the companies' products."

"Practice Fusion's conduct is abhorrent. During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids. The companies illegally conspired to allow the drug 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," Christina E. Nolan, US attorney for the District of Vermont, where the case was brought, commented in the release.

More Shoes to Drop?

The Justice Department said that Practice Fusion had agreed "to cooperate in any ongoing investigations of the kickback arrangement [with the opioid maker] and report any evidence of kickback violations by any other EHR vendors."

While there is no indication that other EHR companies have participated in similar schemes with drug companies, Dan O'Neill, a former vice president of Practice Fusion, said on Twitter that some pharma firms have flogged their products through EHR ads and emails to users. O'Neill, who was with Practice Fusion from 2013 to 2015, stresses that he was not there when the company's misconduct occurred.

The Justice Department announcement also laid out the details of Practice Fusion's allegedly fraudulent claims about its EHR's features. To be certified under the 2014 criteria of the Office of the National Coordinator of Health IT (ONC), EHR software had to allow users to electronically create a set of standardized clinical summaries for export. Practice Fusion falsely represented to the certifying body that its EHR could do this, although it could not. In addition, the company's software failed to incorporate standardized vocabularies, as required, the DOJ said.

These actions, the news release said, "caused [Practice Fusion's] users to submit false claims for federal incentive payments by misrepresenting the capabilities of its EHR."

Practice Fusion was purchased by Allscripts, a much larger EHR vendor, in 2018. It is not named in the Justice Department news release.

In a statement emailed to Medscape Medical News, Brian Farley, executive vice president of Allscripts, said, "We are pleased to complete the settlement of these legacy matters, which as disclosed last August involve conduct predating Allscripts' acquisition of Practice Fusion. As a company, we are committed to maintaining the highest levels of professionalism and integrity, and since learning of this matter we have further strengthened Practice Fusion's compliance program.

"Allscripts recognizes the devastating impact that opioids have had on communities nationwide, and we are using our technology to fight this epidemic. We remain committed to Practice Fusion and believe this matter should not overshadow the important and valuable work it is currently performing."

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