Whistleblower lawsuit suit hits Epic for billing system

Company refutes charges that application allowed hospitals to double bill for anesthesia services.

A False Claims Act suit filed against electronic health records system giant Epic was unsealed late last week, claiming that its financial system enables a form of double billing that could have resulted in hundreds of millions of dollars of extra charges paid by the government.

The two-year-old suit is being brought by a former WakeMed Health employee, contending that the Verona, Wis.-based company didn’t adjust its billing software after the Centers for Medicare and Medicaid Services changed the way that it required hospitals to bill for anesthesia services. The suit charges that, as a result, hospitals using Epic software have improperly billed the federal health insurance programs for those services.

In a statement from a company spokeswoman, Epic denied the allegations.

The suit was filed under the False Claims Act, a federal law that allows people who are not affiliated with the government to file actions against federal contractors claiming fraud against the government. The act of filing such actions is informally called "whistleblowing."

The suit has its origins in 2012, when Medicare adjusted its payment approach for anesthesia services—it had previously allowed the specialists to bill for 15-minute blocks of time, but at that time required physicians to bill for their actual time of their involvement in procedures. The suit claims Epic’s billing software enabled hospitals to bill for both 15-minute increments and anesthesiologists’ actual time.

A statement from Epic spokeswoman Meghan Roh refuted the charge, saying the suit stems from "a fundamental misunderstanding of how claims software works." The statement noted that the allegations of the case already had been reviewed by the Department of Justice, which decided not to move forward with prosecution.

David J. Linesch, the lawyer for the plaintiff, says he expects to move forward with the case against Epic. The suit contends that Epic is liable to the U.S. “under the treble damages and civil penalty provision for a civil penalty of not less than $5,000 and not more than $10,000 for each of the false or fraudulent claims herein, plus three times the amount of the damages which the government has sustained because of Defendant’s actions.”

In late May, the False Claims Act was successfully used against eClinicalWorks, another vendor of an EHR system, which entered into a settlement to pay

the federal government $155 million to settle a False Claims Act lawsuit contending that its products were faulty. The settlement was the first of its kind for a healthcare information technology company.

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