Allscripts' Practice Fusion admits to illegal kickbacks from opioid maker, agrees to $145M settlement

The Silicon Valley EHR vendor received “sponsorship” payments from unnamed pharmaceutical companies so that the latter’s marketing team could influence the design of CDS features, according to the Department of Justice.
By Dave Muoio
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San Francisco-based EHR developer Practice Fusion has agreed to pay $145 million alongside an admission that it “solicited and received kickbacks from a major opioid company” in exchange for clinical decision support (CDS) alerts promoting unnecessary prescription opioids, according to a release from the US Department of Justice.

In a settlement announced yesterday (and hinted at in an earnings report filed last year by its parent company, Allscripts), Practice Fusion will be paying about $25.4 million in criminal fines, roughly $113.4 million to the federal government and up to $5.2 million to individual states participating in separate state agreements, as well as forfeiting criminal proceeds of nearly $1 million.

According to the department, Practice fusion received “sponsorship” payments from unnamed pharmaceutical companies so that the latter’s marketing team could influence the design of CDS features, with the end goal of increasing sales of the pharma’s products. The influence went so far as “drafting the language used in the alert itself,” according to the department, and “did not always reflect accepted medical standards.”

The DoJ noted that between 2014 and 2019, “numerous prescriptions” were written by providers after receiving these alerts. In particular, the department highlighted one instance in which Practice Fusion received a payment of nearly $1 million from a unnamed “major” opioid company’s marketing department for an increase in prescriptions of extended release opioids.

“Across the country, physicians rely on [EHRs] software to provide vital patient data and unbiased medical information during critical encounters with patients,” Principal Deputy Assistant Attorney General Ethan Davis of the Department of Justice’s Civil Division said in a 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.”

The settlement will also resolve allegations against Practice Fusion involving falsely obtained Office of the National Coordinator for Health Information Technology (ONC) certifications, in which the company concealed the fact that multiple versions of its EHR software did not comply with the ONC’s criteria. According to the DoJ, this led providers to unknowingly and falsely attest to compliance with Health and Human Services requirements for Medicare reporting for versions of its.

WHY IT MATTERS

As documentation systems and other clinician-focused tools become more established, CDS features are poised to become a major part of the standard clinical workflow. In a best case implementation, the technology could improve patient outcomes by standardizing treatment, while simultaneously speeding up care and reducing the burden on physicians.

This settlement, however, highlights the worst case scenario in which stakeholders can use abuse these tools to promote their interests.

“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,” Christina E. Nolan, US attorney for the District of Vermont, said in a statement. “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.”

“We cannot — and will not — tolerate technology companies influencing patient treatment merely because a pharmaceutical company provided a kickback,” she said.

Doctors will, rightly, only adopt CDS systems if they believe the algorithms can be trusted. As such, Practice Fusion’s crimes not only harmed patients the prescribed unnecessary opioids, but also the efforts of other CDS software makers working to improve care.

THE LARGER TREND

Practice Fusion was riding widespread industry support and eyeing the possibility of an IPO just a few years ago, but ultimately sold its business to major EHR vendor Allscripts for $100 at the start of 2018.

Allscripts seems to have been aware of the company’s issues for some time. Word of its woes first began to trickle out last year, thanks to SEC documents filed by Allscripts detailing a March 2017 document request and subsequent 2019 grand jury subpoena.

Allscripts’ general counsel told CNBC today that the company is “pleased” to finally see the settlement run its course.

This isn’t the first time Practice Fusion has found itself in the crosshairs of the federal government. In 2016, it settled with the Federal Trade Commission by agreeing to a 20-year privacy practice order after charges that it had solicited patient reviews and posted them online without concealing personal identification information. The FTC said those patients were often unaware their information would be shared publicly.

2017 also saw eClinicalWorks, another EHR vendor settle for $155 million with the DoJ after an investigation into its alleged anti-kickback violations. Like Practice Fusion’s current settlement, this case also involved the US Attorney’s Office for the District of Vermont.