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Practice Fusion to pay $145 million over opioid kickback allegations

January 27, 2020 06:28 PM

JESSICA KIM COHEN 

Practice Fusion, a vendor of electronic health records software, will pay $145 million to resolve criminal and civil investigations, including a probe into a scheme to increase opioid prescriptions, the Justice Department said Monday.

The DOJ said the case marks the first criminal action taken against an EHR vendor. Allscripts Healthcare Solutions, which purchased Practice Fusion in 2018, said the settlement involves conduct from before the acquisition.

Practice Fusion admitted to soliciting and receiving kickbacks of nearly $1 million from a “major opioid company” that the Justice Department didn’t name in exchange for creating a clinical decision-support alert that would “cause doctors to prescribe more extended release opioids,” according to the agency.

Practice Fusion reportedly advertised to the opioid company that it would receive a favorable return on investment because physicians would prescribe more opioids on seeing the CDS alert. That message was reportedly designed with input from the opioid company’s marketing department.

“Practice Fusion’s conduct is abhorrent,” Christina E. Nolan, U.S. attorney for Vermont, said in a statement. “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.”

Under the agreement, Practice Fusion will pay more than $26 million in criminal fines and roughly $118.6 million in civil settlements, including $113.4 million to the federal government and up to $5.2 million to states that opt to participate in separate state agreements.

The resolution also settles allegations that Practice Fusion received kickbacks from pharmaceutical companies in exchange for 13 other arrangements involving CDS alerts. Practice Fusion allegedly allowed the companies to participate in designing the alerts, including setting criteria to determine when a provider received an alert, some of which did not reflect accepted medical standards.

Practice Fusion was charged with two felony counts for violating the Anti-Kickback Statute and for conspiring with the opioid company to violate the Anti-Kickback Statute.

In addition to the kickback allegations, the civil settlement with the U.S. also resolves allegations that the company falsely obtained certification from the HHS’ Office of the National Coordinator for Health Information Technology’s health IT certification program for several versions of its EHR software. By allegedly misrepresenting those software capabilities, Practice Fusion led providers using its EHR to falsely attest to compliance with Medicare and Medicaid EHR incentive programs.

“As new technologies continue to develop and evolve, so too do new and innovative fraud schemes,” Shimon R. Richmond, assistant inspector general for investigations at HHS, said in a statement. “We will continue to be vigilant in detecting and investigating these schemes.”

Allscripts in August announced it had reached a tentative settlement with the DOJ. At the time, Allscripts President Rick Poulton said $145 million was “in line” with other settlements in the industry, and that investigations into Practice Fusion had “many similarities to investigations that have either been settled or remain active with many of our industry competitors.”

In 2017, a separate EHR vendor—eClinicalWorks—and some of its employees were ordered to pay $155 million for allegedly falsely obtaining certification for its EHR software.

“We are pleased to complete the settlement of these legacy matters, which as disclosed last August involve conduct predating Allscripts’ acquisition of Practice Fusion,” said Brian Farley, Allscripts’ general counsel and chief administrative officer, in an emailed statement Monday. “We remain committed to Practice Fusion and believe this matter should not overshadow the important and valuable work it is currently performing.”

Allscripts said it has “further strengthened Practice Fusion’s compliance program” since learning about the situation.

Under a deferred prosecution agreement with the Vermont U.S. Attorney’s Office, Practice Fusion is required to cooperate with ongoing investigations into the kickback arrangement, overhaul its compliance efforts, and hire an independent oversight organization to review and approve any sponsored CDS alerts before they’re implemented.

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michael schoeneman
michael schoeneman
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