Vermont U.S. Attorney's Office: Health records vendor will pay $145 million in kickback scheme

An electronic health records software vendor will pay $145 million after admitting to a kickback scheme aimed at influencing physicians, including in Vermont, to prescribe more opioids, the U.S. Attorney's Office in Vermont has announced. 

The company's conduct occurred during the height of the opioid crisis. 

San Francisco-based Practice Fusion admitted to soliciting and receiving payments from a major opioid company in exchange for implementing alerts in their software designed to increase prescriptions of the company's drugs, a news release stated. Lawyers allege that Practice Fusion did the same thing with other pharmaceutical companies. The settlement resolves both criminal and civil proceedings.

The U.S. Attorney's Office did not have the exact number of Vermont-based physicians who were using the software, according to spokesman Kraig LaPorte. The software was also used in every other state. 

Practice Fusion touted financial benefits to pharmaceutical companies

The U.S. Attorney's Office said Practice Fusion allowed pharmaceutical companies to influence the development of the alerts in ways aimed at increasing the sale of the companies' drugs. This was done in exchange for "sponsorship" payments from the pharmaceutical companies. The alerts that Practice Fusion agreed to implement "did not always reflect accepted medical standards," the news release stated. 

"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 alerts, the U.S. Attorney's Office said.

In one specific case, Practice Fusion admitted that it received nearly $1 million from a major opioid company for the alert, the U.S. Attorney's Office said. 

"Practice Fusion's conduct is abhorrent," said Vermont U.S. Attorney Christina Nolan. "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." 

Federal attorneys have also alleged that Practice Fusion misrepresented the capabilities of its software, causing users to submit false claims for federal incentive payments.   

Agreement requires transparency by Practice Fusion

The agreement settling the criminal case, called a deferred prosecution agreement, imposes certain requirements on Practice Fusion as it moves forward: 

• The company must cooperate in any ongoing investigations of kickback arrangements or report any evidence of kickback violations by other electronic health record vendors. 
• Practice Fusion must make documents related to its conduct available to the public through its website. 
• The company must retain an independent oversight organization that reviews and approves any sponsored alerts before Practice Fusion implements them. The oversight organization must also create a compliance program designed to ensure the conduct is not repeated. 

Through the civil settlement, the federal government receives $113.4 million and states that opt to participate in agreements share up to $5.2 million. The civil investigation was handled jointly with the U.S. Attorney's Office for the Northern District of California. 

Practice Fusion only admitted conduct in connection with the criminal charges involving the $1 million kickback from the major pharmaceutical company. The civil settlement involves allegations against the company only. 

Contact Elizabeth Murray at 802-651-4835 or emurray@freepressmedia.com. Follow her on Twitter at @LizMurrayBFP.

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