NEWS

Missouri and Other States Reach Settlement with Health Records Company for Allegedly Promoting Specific Drug Manufacturers in Exchange for Payments

Jan 28, 2020, 17:39 PM by AG Schmitt
Missouri Attorney General Eric Schmitt announced today that on January 27, 2020, Missouri and several other states have reached an agreement with web-based electronic health records (“EHR”) company, Practice Fusion, Inc. to settle allegations that the company accepted payments from specific drug manufacturers in exchange for promoting some of the same manufacturers’ drugs to physicians using Practice Fusion’s software.

JEFFERSON CITY, Mo. —Missouri Attorney General Eric Schmitt announced today that on January 27, 2020, Missouri and several other states have reached an agreement with web-based electronic health records (“EHR”) company, Practice Fusion, Inc. to settle allegations that the company accepted payments from specific drug manufacturers in exchange for promoting some of the same manufacturers’ drugs to physicians using Practice Fusion’s software.  

The promotions took the form of pop-up notifications to physicians, suggesting a particular drug to be considered as they evaluated patients’ medical histories. The settlement resolves allegations that the payments accepted by Practice Fusion constitute kickbacks in violation of the federal Anti-Kickback Statute (“AKS”) and Civil Monetary Penalties Law, and related state statutes.

“Promoting specific drugs through push notifications in exchange for payments is a violation of multiple state and federal statutes and eliminates the level playing field for the drug manufacturers that did not pay to have their products promoted,” said Attorney General Schmitt. “The Medicaid Fraud Control Unit of the Attorney General’s Office works hard every single day to root out fraud and recover taxpayer money, and this settlement is yet another product of their dedication.”

Practice Fusion is a web-based EHR company based in San Francisco, California.  Practice Fusion was founded in 2005 and acquired by Allscripts in 2018 (after the period of conduct by Practice Fusion which this settlement resolves).  As part of a larger settlement, Practice Fusion has agreed to pay a total of $5,267,048 to the state Medicaid programs to resolve civil fraud allegations impacting Medicaid. Of that $5.2 million, $998,690.40 is apportioned to the State of Missouri’s Medicaid program.

This settlement arises from an investigation conducted by the United States Department of Justice.  A National Association of Medicaid Fraud Control Units (“NAMFCU”) Team participated in settlement negotiations. The Team included representatives from the Offices of the Attorneys General for the states of Missouri, California, Illinois, Indiana, Louisiana, New York, Texas, and Virginia. Attorney General Schmitt’s Medicaid Fraud Control Unit Chief Auditor, Sarah Johnson, served as a data analyst to the settlement team.

The civil settlement resolves allegations that from November 2013 through August 2017, Practice Fusion solicited and received improper remuneration from certain pharmaceutical manufacturers based on the anticipated financial benefit from increased sales of drugs that would result from clinical decision support (“CDS”) alerts deployed by Practice Fusion within its EHR software platform.  Pharmaceutical manufacturers that paid Practice Fusion selected guidelines used to develop the alert, set criteria that would determine when a provider received an alert, and in some cases, even drafted the language used in the alert itself.  

Furthermore, the CDS alerts did not always reflect accepted medical standards and although they appeared to provide unbiased medical information, the CDS alerts were designed to encourage providers to prescribe a specific drug or class of drugs in some instances.  Practice Fusion’s actions served as an inducement to promote the same companies’ drugs through CDS alerts in violation of the AKS.  This behavior resulted in false claims or information being submitted or presented to state Medicaid programs for reimbursement. This settlement covers fourteen (14) separate CDS alert agreements entered into during the relevant time frame.

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