Practice Fusion Settlement Highlights Government’s Increasing Focus on Health Information Technology Certification and Financial Relationships in Enforcement Actions

The U.S. Department of Justice announced on January 27, 2020 that Practice Fusion, a health information technology (IT) vendor, has entered into a civil settlement and deferred prosecution agreement (DPA) worth $145 million that resolves civil investigations led by the U.S. Attorney’s Office for the District of Vermont, the U.S. Attorney’s Office for the Northern District of California, and the Civil Division’s Commercial Litigation Branch of main justice, as well as a criminal investigation led by the U.S. Attorney’s Office for the District of Vermont (collectively, the “Government”). The agreement is yet another in a series of civil False Claims Act and Anti-Kickback Statute enforcement actions involving EHR vendors. However, the criminal kickback allegations against Practice Fusion notably focus on the financial relationships between EHR vendors and pharmaceutical manufacturers rather than those with providers, and demonstrate the Government’s view of how those relationships could potentially impact a provider’s clinical decision making. The DPA and new focus on clinical decision support (CDS) alerts within EHR software products should put vendors, manufacturers, and providers alike on notice of the potential consequences if faced with aggressive enforcement in this developing area of health information technology, and the need to take proactive steps to ensure that financial arrangements involving the development of EHR capabilities reflect practices compliant with health care fraud and abuse laws.

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