A recently unsealed whistleblower lawsuit claims Epic's billing software prompted hundreds of hospitals across the country to double-bill Medicare and Medicaid for anesthesia services, prompting "hundreds of millions of dollars" in fraudulent payments.
The lawsuit, originally filed in 2015, was unsealed on Thursday. The federal government declined to intervene in the case earlier this year, but the former WakeMed Health employee that filed the lawsuit plans to move forward with the case, plaintiff's attorney David J. Linesch told FierceHealthcare.
The amended complaint, which was filed in June, alleges that Epic refused to adjust its billing software after the Centers for Medicare & Medicaid Services changed the way hospitals bill for anesthesia, prompting hospitals that use its software to improperly bill Medicare and Medicaid.
The complaint references nearly 300 hospitals, health systems and physician practices that use Epic software and may have improperly billed the government for anesthesia services. The lawsuit was made public just months after eClinicalWorks paid $155 million to settle claims that it falsely obtained certification for its EHR software.
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The claims against Epic focus specifically on its billing software. The whistleblower in the lawsuit, Geraldine Petrowski, worked as a compliance review specialist at WakeMed Health in North Carolina from September 2008 to September 2012 and then as the supervisor of physicians’ coding until June 2014. She also served as the liaison for the hospital’s Epic implementation, which went live in 2015.
The lawsuit states that in January 2012, Medicare adjusted its reimbursement for anesthesia billing from 15-minute increments to the physician’s actual time on the procedure. But Petrowski claims Epic’s software allowed hospitals to bill for both the total time as well as the 15-minute increments, categorized as “base units.”
According to the lawsuit, when Petrowski raised concerns about the billing practice she was told “everybody bills base units.” She claims Epic eventually relented and fixed the software, but only for WakeMed Health.
The complaint includes one specific example from MD Anderson Cancer Center in which the hospital billed for seven hours of anesthesia time when the actual procedure—a prostate removal—took less than five hours. The suit also references Epic’s Handbook on Billing Anesthesia, last updated in December 2014, that includes base units in its billing protocol.
Epic spokesperson Meghan Roh noted that the Department of Justice opted not to move forward with the case after "its own expert review" of the allegations.
"The plaintiff’s assertions represent a fundamental misunderstanding of how claims software works," she said in an email to FierceHealthcare.
The lawsuit says Epic acted with “deliberate ignorance and/or reckless disregard of the truth” which led to the fraudulent billing. Under the False Claims Act, defendants are liable for treble damages and civil penalties between $5,000 and $10,000 for each false claim.