Practice Fusion: The Drug Company Helped Write the Prompt

In the Practice Fusion fraud settlement, the electronic health records vendor agreed to pay approximately $118.6 million to resolve civil allegations involving drug-company kickbacks and false software certification. The same software that put a paid opioid prompt in front of doctors allegedly left practices unable to export patient records for themselves.

The Department of Justice announced the civil settlements on January 27, 2020. Practice Fusion, a San Francisco health information technology developer, also admitted in a separate criminal deferred prosecution agreement that it solicited and received kickbacks to influence opioid prescribing. The government also alleged other sponsored-alert arrangements and misrepresentations about certified software capabilities.

What the Practice Fusion Fraud Settlement Covered

The civil settlement covered claims to federal healthcare programs arising from the opioid kickback arrangement, allegations about other drug-company payments, and allegations that false certification caused providers to claim electronic health records incentive payments. The civil amount included approximately $113.4 million for the federal government and up to $5.2 million for states choosing to enter separate agreements.

The money follows different decisions inside the vendor. In the admitted opioid arrangement, commercial staff helped secure payment for a prompt intended to increase prescribing. On the certification side, the government alleged that Practice Fusion concealed missing capabilities from its certifying body. The civil allegations connected those vendor decisions to claims submitted by health care providers.

What Are Some Examples of Kickbacks in Healthcare?

Practice Fusion’s admitted opioid arrangement shows how a kickback can buy influence inside clinical software. Under its deferred prosecution agreement, the company admitted soliciting and receiving payment to use its software to influence doctors’ opioid prescribing. The buyer wanted more prescriptions for extended-release opioids.

The Justice Department’s account of the criminal charging document describes a payment of nearly $1 million. The opioid company’s marketing department financed it and helped design the clinical decision support alert. Practice Fusion pitched the alert on the financial return the sponsor could expect from increased prescribing.

A clinical decision support alert reaches a clinician inside the patient record, where it can suggest a treatment or prompt a decision. The Justice Department’s later account of the criminal investigation identified the sponsor as Purdue Pharma, the seller of OxyContin, and said the alerts were presented to physicians as objective medical guidance. The company paying for the prompt was also helping shape what the doctor saw.

We see the absurdity in that sales pitch: a feature presented as objective guidance was sold on how much more of the sponsor’s product doctors would prescribe. The patient’s chart had become a place to deliver the drug company’s commercial objective.

For someone who worked on the product, the connection runs through the sponsorship agreement, the marketing input and the resulting alert. For someone on the sales side, the promised return explains what the customer thought it was buying.

The Government Alleged Other Sponsored Alerts Targeted Drug Sales

The civil settlement also resolved kickback allegations involving thirteen other clinical decision support arrangements. The government alleged that Practice Fusion agreed with pharmaceutical companies to implement alerts intended to increase sales of their products.

The alleged influence reached into the design itself. Pharmaceutical companies could help select the guidelines used to develop an alert, set the conditions that would trigger it and, in some cases, draft its language. According to the government’s allegations, the resulting alerts did not always reflect accepted medical standards.

Those are choices a product team would recognize. Which guidance supplies the recommendation? Which patient encounter makes it appear? What does the message ask the clinician to do? When a sponsor has a say in those decisions, its influence reaches beyond where an advertisement sits on a screen.

The Justice Department reported that, between 2014 and 2019, providers using Practice Fusion wrote numerous prescriptions after receiving alerts that pharmaceutical companies helped design.

What Does It Mean to Have a Certified EHR?

Certified electronic health records software is supposed to deliver the capabilities its certificate promises. The government alleged that several Practice Fusion versions could not, including the ability to let users create standardized patient-data exports.

The industry arrangement separates the product certificate from the provider’s payment. The Office of the National Coordinator for Health Information Technology sets the certification criteria, and an authorized certification body certifies the software. The Centers for Medicare and Medicaid Services oversees the incentive programs. What the vendor represents about the product can therefore become part of what a provider relies on when claiming payment.

The Government Alleged Users Could Not Run the Export

The 2014 Edition criteria required software to let users electronically create a set of standardized export summaries for all patients. The government alleged that Practice Fusion told its certifying body the software met that requirement when several versions did not.

The civil allegations went further. After certification, Practice Fusion allegedly disabled access to the export feature altogether. Users had to contact the company separately to request their patient-data exports. The government also alleged that the software failed to incorporate standardized vocabularies required for certification.

For a practice, creating its own export and asking its vendor to produce one are different capabilities. The alleged change put the vendor between the practice and a function the certificate said the practice could perform. An engineer who knew when access changed, or a support employee handling those requests, could see a part of the story that the certificate alone would never reveal.

The 2022 Vassar College thesis A Panacea or a Problem? Electronic Health Records and the Complicated Politics of Its Stakeholder Network argues that incentives accelerated adoption without necessarily producing useful integration into clinical work. Its point lands directly on the distinction between possessing software and being able to use it:

The thesis describes sharing information across care organizations as central to the purpose of electronic health records. That makes an export function part of what the product is for. In the Practice Fusion allegations, users depended on the vendor to release data the certified software was supposed to let them export themselves.

Another Vendor’s Export Allegations

The government’s complaint against eClinicalWorks described a similar conflict over patient-data extraction. It alleged that the company failed to meet batch-export requirements and quoted an employee’s response to users’ concerns:

That allegation gives the export issue a commercial dimension. The parallel is the gap between the promised capability, the customer’s experience and the vendor’s own decisions.

What Is the EHR Incentive Program?

The historical Medicare and Medicaid electronic health records incentive programs paid eligible providers that met program requirements, including requirements involving certified technology. In the Practice Fusion civil case, the government alleged that false product certification caused providers using certain software versions to falsely attest that they qualified for those payments.

The alleged false attestations concerned Medicare reporting periods from 2014 through 2016 and Medicaid reporting periods from 2014 through 2017. The product version and reporting period matter together: they connect a particular capability claim to the provider’s request for money.

An earlier vendor case shows a different payment arrangement. In its guilty plea, KPMD admitted false incentive claims after a hospital assigned its government incentive payments to the software company. KPMD falsely attested that the hospital’s emergency room met incentive criteria while the hospital was closing. Its prosecution began in 2018, before the Justice Department called Practice Fusion the first criminal action against an electronic health records vendor.

For Practice Fusion, the civil allegation followed providers’ reliance on the vendor’s certification. That is why software-development records and provider payment records can belong to the same false-claims case.

The Separate Obstruction Case

A former Practice Fusion director of national accounts pleaded guilty to attempting to obstruct the federal investigation into the vendor’s relationship with the opioid manufacturer. He had been a principal contact between the companies in 2015 and 2016. The Justice Department’s account of his guilty plea describes the admitted act:

The department’s later account of the criminal case places the deletion in late 2019, when the former director knew the government was investigating the kickback scheme. It also describes his role in persuading the opioid company to pay for changes to the physician-facing interface. The FBI and HHS’s Office of Inspector General investigated his case.

What Evidence Is Needed to Report Fraud?

For an electronic health records case like this one, useful evidence connects a product decision to its commercial purpose, what customers were told and the government payments that followed. Our experts work with insiders across engineering, sales, certification and provider operations to make those connections.

We assess the sponsor’s agreement alongside the alert it bought, and compare certification promises with what practices could actually do. Your knowledge of how a feature was built, sold or disabled can explain a discrepancy that a certificate or payment record alone would miss.

Practice Fusion’s resolution had no whistleblower plaintiff. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know How the Feature Was Built

If you saw a drug sponsor shape clinical guidance or a certified capability disappear from the product, speak to one of our Whistleblower Experts about what happened inside your company. We connect the software decisions to the commercial arrangements and government claims, bring in electronic health records fraud whistleblower lawyers who understand certification and kickback cases, and stay beside you to build your strongest whistleblower case.