Allscripts Strikes $145M Settlement With DOJ Over Practice Fusion Claims

Allscripts Healthcare Solutions and federal investigators have reached a tentative settlement over allegations of kickbacks and HIPAA violations by an electronic health record (EHR) company that Allscripts acquired last year.

The $145 million will settle criminal and civil liabilities over the actions of Practice Fusion, which first came under investigation in 2017, Allscripts announced Thursday during a quarterly earnings call.

“While the amount we have agreed to pay of $145 million is not insignificant, it is in line with other settlements in the industry, and we are happy to reach the agreement in principle,” said Rick Poulton, the president of Allscripts, during the call. “We expect to have recoveries from a variety of third parties that will help offset a portion of the amount we have agreed to pay the government.”

Allscripts acquired Practice Fusion in February 2018 for $100 million, according to a U.S. Securities and Exchange Commission filing earlier this year.

But Practice Fusion had been served with a request for documents from the U.S. Attorney’s Office for the District of Vermont in March 2017.

More requests followed after the Allscripts acquisition; between April 2018 and January of this year, five more requests for information were issued, including another CID and separates subpoenas related to HIPAA.

A grand jury subpoena connected to a criminal investigation was served on Practice Fusion in March 2019, according to the SEC filing.

Compliance with the Anti-Kickback Statute and HIPAA were related to “certain business practices engaged in by Practice Fusion,” the filing added, without specifying further.

Allscripts was complying with the investigation, to move past the actions that were allegedly taken before the Allscripts acquisition, Poulton said in the call.

“These investigations have many similarities to investigations that have either been settled or remain active with many of our industry competitors,” the Allscripts president added.

The second-quarter earnings statement for Allscripts otherwise touted “strong” bookings of $276 million — up 31% from the prior year period.

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