Attorneys in Indiana EHR lawsuit drop state claims after pushback from attorney general

Legal and regulatory issues
Attorneys who claim dozens of hospitals falsified MU attestation are dropping state claims at the request of the Attorney General. (Image: iStock/BCFC)

Two attorneys alleging more than 60 hospitals in Indiana submitted fraudulent Meaningful Use data to receive EHR incentive payments have agreed to dismiss state claims after Indiana's attorney general questioned the merits of the case.

The decision to pull back on state claims wipes out portions of the lawsuit alleging dozens of Indiana hospitals improperly received EHR incentive payments through state’s Medicaid program. Instead, the case proceeds with similar allegations that the hospitals, along with medical records company Ciox Health, violated federal false claims and antikickback laws.

RELATED: Unsealed lawsuit claims 62 Indiana hospitals, Ciox Health triggered fraudulent EHR incentive payments

Late last month, Indiana Attorney General Curtis Hill filed a motion to dismiss the claims that focus on a failure to comply with a core measure of Stage 1 Meaningful Use requiring hospitals to fulfill medical records requests within three business days. Hill argued the case has “little, if any merit” and the allegations were an attempt to “bootstrap” violations of the HITECH Act into a state whistleblower law.

“The State has limited resources to investigate fraud, and this case will divert funds and personnel from other investigations without recovering funds for the Indiana Medicaid Program,” the Attorney General’s Office wrote in a court filing (PDF). “The cost-benefit analysis is clearit is not in the public interest to spend taxpayer dollars to respond to discovery and monitor this case.”

RELATED: Ciox Health sues HHS to stop ‘irrational’ HIPAA enforcement

On Friday, attorneys Michael P. Misch and Bradley P. Colborn with Anderson Agostino & Keller, P.C., who filed the lawsuit, said they disagreed with the state's legal analysis, but decided not to oppose (PDF) the motion to dismiss, acknowledging the state “is entitled to substantial deference in deciding what claims are prosecuted on its behalf.”

Neither attorney responded to FierceHealthcare’s request for comment.

The case was unsealed in November after the Department of Justice declined to intervene. The Indiana Attorney General’s Office declined to intervene shortly after the case was made public.