Practice Fusion, Inc. (Practice Fusion), an electronic health record (EHR) vendor acquired by Allscripts in 2018, recently agreed to pay $145 million to resolve criminal and civil investigations related to an illegal kickback arrangement with a major opioid company.

The settlement included $26 million in criminal fines and forfeiture to resolve two felony charges related to Anti-Kickback Statute (AKS) violations.  Pursuant to the settlement, Practice Fusion admitted that “it solicited and received kickbacks from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications.”  Practice Fusion acknowledged that it implemented CDS alerts with the intention of increasing the likelihood that doctors would prescribe extended release opioids (“EROs”).  The criminal fine is the largest in the history of the District of Vermont.

Christina E. Nolan, U.S. Attorney for the District of Vermont stated that the arrangement allowed the opioid company “to inject itself in the sacred doctor-patient relationship.”  She added, “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, including the need for pain medication and prescription amounts.

As part of its three-year Deferred Prosecution Agreement, Practice Fusion agreed to adopt a comprehensive compliance program to prevent such abuses from occurring in the future.  Practice Fusion also agreed to pay $118.6 million to resolve civil federal and state False Claims Act (FCA) claims that Practice Fusion misled the government certifying body regarding certain functionalities of its EHR software.

The Practice Fusion settlement represents DOJ’s third civil EHR vendor settlement in recent years, following the eClinicalWorks settlement in May 2017 and the Greenway Health settlement in February 2019.  The U.S. Attorney’s Office for the District of Vermont and DOJ’s Commercial Litigation Branch, Fraud Section, led both matters.  In announcing the eClinicalWorks settlement, U.S. Attorney Nolan stated that “EHR companies should consider themselves on notice.”  This is the first time DOJ has taken criminal action against an EHR vendor.

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Photo of Stefanie Doebler Stefanie Doebler

Stefanie Doebler’s practice focuses on health care compliance matters for pharmaceutical and medical device clients. She provides advice related to advertising and promotion, fraud and abuse, state law compliance and reporting regulations, interactions with health care professionals, clinical trial conduct and results disclosure…

Stefanie Doebler’s practice focuses on health care compliance matters for pharmaceutical and medical device clients. She provides advice related to advertising and promotion, fraud and abuse, state law compliance and reporting regulations, interactions with health care professionals, clinical trial conduct and results disclosure, supply chain management, Medicaid price reporting, and other aspects of federal and state regulation of pharmaceuticals, biologics, and medical devices.

Photo of Anna D. Kraus Anna D. Kraus

Anna Durand Kraus has a multi-disciplinary practice advising clients on issues relating to the complex array of laws governing the health care industry. Her background as Deputy General Counsel to the U.S. Department of Health and Human Services (HHS) gives her broad experience…

Anna Durand Kraus has a multi-disciplinary practice advising clients on issues relating to the complex array of laws governing the health care industry. Her background as Deputy General Counsel to the U.S. Department of Health and Human Services (HHS) gives her broad experience with, and valuable insight into, the programs and issues within the purview of HHS, including Medicare, Medicaid, fraud and abuse, and health information privacy. Ms. Kraus regularly advises clients on Medicare reimbursement matters, the Medicaid Drug Rebate program, health information privacy issues (including under HIPAA and the HITECH Act), and the challenges and opportunities presented by the Affordable Care Act.