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Key Points:
  • Practice Fusion allegedly took $1 million in kickbacks from a major pharmaceutical company in exchange for its software to encourage increased opioid prescriptions
  • First criminal case against an EHR vendor

Practice Fusion Inc. (Practice Fusion), a San Francisco-based health information technology developer founded in 2015 that provides Electronic Health Record (EHR) software to medical practices, admitted to taking $1 million in kickbacks from a major opioid manufacturer in a scheme to increase prescriptions. In exchange for the kickbacks, Practice Fusion allegedly designed and implemented clinical decision support (CDS) alerts in its EHR software that would increase prescriptions for the company’s drug products. In the settlement agreement with the Department of Justice (DOJ), Practice Fusion will pay $145 million to resolve allegations of a five-year criminal scheme involving collusion with opioid makers to influence physicians into prescribing more addictive pain medications. The DOJ reported that Practice Fusion allegedly allowed opioid makers to select the guidelines used to develop the alerts, set the criteria that would determine when a healthcare provider received an alert, and even draft the language used in the alert itself. Some of these alerts did not conform with best medical practices. Under a DOJ deferred prosecution agreement (agreement), Practice Fusion has agreed to pay more than $26 million in criminal fines and forfeiture, and approximately $118.6 million in civil settlement to the federal government and states to resolve the kickback allegations.  In addition, the agreement requires Practice Fusion to take responsibility and ensure transparency for its underlying conduct and invest in compliance overhauls and independent oversight. The agreement also requires Practice Fusion to make documents relating to its criminal conduct available to the public through a website. The agreement requires Practice Fusion to obtain an independent oversight organization to review and approve any sponsored CDS alerts before Practice Fusion implements them and create a comprehensive compliance program designed to prevent such abuses from reoccurring.

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Strategic Management compliance consultants have over 40 years of experience in providing research, analysis, and program support for privacy and security rule compliance. Call us at (703) 683-9600 or contact us online for a tailored assessment of your organization’s particular needs.

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