The EHR vendor revealed in an SEC filing that the company it acquired in 2018 is being probed for potential HIPAA and anti-kickback violations.

Allscripts subsidiary Practice Fusion served with grand jury subpoena

By Mike Miliard
11:03 AM

Practice Fusion, the ambulatory electronic health record vendor acquired by Allscripts this past year, was given a grand jury subpoena recently as part of an investigation into its ONC certification and compliance with HIPAA and federal anti-kickback laws.

WHY IT MATTERS
The ongoing investigation was noted by Allscripts in its recent Securities and Exchange Commission filing for Q1 2019.

In March 2017, about a year before it was acquired by Allscripts for $100 million, Practice Fusion was served a "request for documents and information from the U.S. Attorney’s Office for the District of Vermont" as part of a civil investigation, the company told the SEC.

After the acquisition was completed, Practice Fusion received five more requests for additional documents between April 2018 and January 2019, Allscripts said.

In March 2019, Practice Fusion "received a grand jury subpoena in connection with a related criminal investigation," according to the Allscripts filing.

"The document and information requests received by Practice Fusion relate to both the certification Practice Fusion obtained in connection with the U.S. Department of Health and Human Services’ Electronic Health Record Incentive Program and Practice Fusion’s compliance with the Anti-Kickback Statute and HIPAA as it relates to certain business practices."

Practice Fusion "continues to produce documents and information in response to these various requests," said Allscripts.

THE LARGER TREND
This is not the first time Practice Fusion has found itself at odds with a federal agency. 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.

In 2017, another EHR vendor, eClinicalWorks, settled for $155 million with the Department of Justice after an investigation into its alleged anti-kickback violations – this one also from U.S. Attorney’s Office for the District of Vermont.

That investigation, along with another recent case, in which FTC charged e-prescribing giant Surescripts with monopolization of the eRx market, has led some to wonder whether more health IT vendors are in the sights of federal regulators.

ON THE RECORD
In its filing, Allscripts tells SEC that the government's investigation of the Practice Fusion subsidiary "could have a material adverse effect on our business, financial condition and operating results," depending on the outcome.

It also noted that it's "aware of other EHR providers who are responding to similar investigations by the U.S. Attorney’s Office, and two other EHR providers recently settled allegations by the Department of Justice that resulted from civil investigative demands and required significant payments and ongoing compliance costs in connection with long-term corporate integrity agreements."

Twitter: @MikeMiliardHITN
Email the writer: mike.miliard@himssmedia.com

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