By Clinical Research News Staff

January 29, 2020 | The Department of Justice announced this week that Practice Fusion will pay $145 million to resolve criminal and civil investigations relating to its electronic health records (EHR) software. The San Francisco-based health information technology developer admitted that it solicited and received kickbacks from a major opioid company and other pharmaceutical companies in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications.

Specifically, in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of clinical decision support (CDS) alerts within Practice Fusion’s EHR software in ways aimed at increasing sales of the companies’ products, the Department of Justice stated in their resolution. Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and even drafting the language used in the alert itself. 

The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards, the resolution reports. In discussions with pharmaceutical companies, Practice Fusion touted the anticipated financial benefit to the pharmaceutical companies from increased sales of pharmaceutical products that would result from the CDS alerts. Between 2014 and 2019, healthcare providers using Practice Fusion’s EHR software wrote numerous prescriptions after receiving CDS alerts that pharmaceutical companies participated in designing.

“Across the country, physicians rely on electronic health records software to provide vital patient data and unbiased medical information during critical encounters with patients,” Ethan Davis, Principal Deputy Assistant Attorney General of the Department of Justice’s Civil Division, said in an official statement. “Kickbacks from drug companies to software vendors that are designed to improperly influence the physician-patient relationship are unacceptable. When a software vendor claims to be providing unbiased medical information—especially information relating to the prescription of opioids—we expect honesty and candor to the physicians making treatment decisions based on that information.”

Formal criminal charges against Practice Fusion include two felony counts for violating the Anti-Kickback Statute (AKS), and for conspiring with its opioid company client to violate the AKS. According to the Department of Justice, this case is the first ever criminal action against an EHR vendor, and the unique Deferred Prosecution Agreement imposes stringent requirements on Practice Fusion to ensure acceptance of responsibility and transparency as to its underlying conduct, and to invest heavily in compliance overhauls and an independent oversight organization. The Deferred Prosecution Agreement requires Practice Fusion to pay a criminal fine of $25,398,300 and forfeit criminal proceeds of nearly $1 million. 

In addition to fines, Practice Fusion will cooperate in any ongoing investigations of the kickback arrangement and report any evidence of kickback violations by any other EHR vendors. To ensure transparency and public awareness of the company’s activities while the nation continues to battle an epidemic of opioid addiction, the Deferred Prosecution Agreement will require Practice Fusion to make documents relating to its unlawful conduct available to the public through a website. Additionally, the Deferred Prosecution Agreement mandates that Practice Fusion retain an independent oversight organization that is required to review and approve any sponsored CDS before Practice Fusion may implement the CDS, and create a comprehensive compliance program designed to ensure such abuses are not repeated.

A civil settlement with the United States also resolves allegations relating to two intersecting Department of Health and Human Services (HHS) programs, one at the Office of the National Coordinator for Health Information Technology (ONC) that regulates the voluntary health IT certification program, and one at the Centers for Medicare & Medicaid Services that oversees EHR incentive programs. Specifically, the United States alleged that Practice Fusion falsely obtained ONC certification for several versions of its EHR software by concealing from its certifying entity, known as an ONC-Authorized Certification Body, that the EHR software did not comply with all of the applicable requirements for certification. ONC’s certification criteria were designed to promote enhanced functionality, utility, and security of health information technology, and access to patient medical information across the care continuum. HHS implemented the certification criteria for EHR software in multiple stages, known as editions. To be certified under the 2014 Edition certification criteria, EHR software was required to allow users to electronically create a set of standardized export summaries for all patients. When Practice Fusion sought certification of this 2014 Edition criteria, Practice Fusion falsely represented to the certifying body that its software met this data portability requirement, when several versions of its software did not. The civil settlement resolves allegations that, at the time these versions of Practice Fusion’s software were certified, its software was unable to permit a user to create a set of standardized export summaries. Additionally, after obtaining certification of the 2014 Edition criteria, Practice Fusion disabled access to this feature altogether. Instead, Practice Fusion required users to contact it separately to request export of this critical patient data.

In addition to failing to satisfy the data portability requirement, Practice Fusion’s software allegedly did not incorporate standardized vocabularies as required for certification.  The United States alleged that by fraudulently obtaining certification for its products, Practice Fusion knowingly caused eligible healthcare providers who used certain versions of its 2014 Edition EHR software to falsely attest to compliance with HHS requirements necessary to receive incentive payments from Medicare during the reporting periods for 2014 through 2016 and from Medicaid during the reporting periods for 2014 through 2017.

“As new technologies continue to develop and evolve, so too do new and innovative fraud schemes,” said Shimon R. Richmond, Assistant Inspector General for Investigations of the U.S. Department of Health and Human Services, in a written statement. “We will continue to be vigilant in detecting and investigating these schemes in order to protect the safety of patients in federal health programs and to ensure the appropriate use of electronic health records in providing their care.”