It continues to be a war of words—in the form of legal filings—between Epic and Particle Health as the startup fights to keep its antitrust lawsuit moving forward.
Health tech company Particle filed an antitrust lawsuit against Epic in September in the Southern District of New York alleging that the electronic health record giant is trying to muscle out competition. Particle is a data platform that aggregates health information for digital health companies through APIs, providing access to more than 300 million patients’ medical records. With a 36% market share of the hospital sector, EHR giant Epic is a dominant force in the health IT industry.
Starting last year, Particle expanded its services to payers to assist so-called "pay-viders" with accessing patients records for “secondary” purposes more typically associated with health insurance, like population health analytics or processing claims, which is allowed under HIPAA and the rules of health information networks, Particle said in its lawsuit.
The 81-page lawsuit (PDF) alleges Epic engaged in monopolistic, anticompetitive practices, using its "power over EHRs to expand its dominance into the fledgling market for payer platforms," according to the lawsuit.
In late December, Epic Systems asked a district court to throw out Particle's antitrust lawsuit, arguing that the startup failed to present the EHR company's anticompetitive conduct in its suit.
Particle, in turn, responded Jan. 9 with a 46-page argument laying out its claims that Epic is stifling competition in the payer interoperability market.
"This case is about Epic’s unlawful and widespread campaign to eliminate competition in the payer-platform market. As alleged in the complaint, Epic has targeted Particle—an innovative start-up improving accessibility and affordability in healthcare—because it has threatened Epic’s chokehold over payer-platforms, which it was previously able to impose and maintain due its dominance over electronic health records," the company wrote in its motion.
Particle alleges Epic has done so through a variety of illegal means, including threatening Particle’s customers unless they agree to stop working with Particle and making repeated defamatory statements.
"Regarding the latter, one would think that, having been accused of such conduct, Epic would choose what it says with care. Instead, Epic brazenly doubles and triples down on knowingly false statements about Particle in its motion, which, if it were not itself a protected filing, would constitute further evidence in support of Particle’s claims," the company wrote.
Particle also said in its motion that Epic has made it "commercially impossible for any payer platform (other than its own) to access EHRs stored in its EHR software, effectively blocking potential competitors from entering the market—until recently.”
In the its motion to dismiss filed in December, Epic said Particle failed to state an antitrust claim because it failed to plead a relevant antitrust product market and failed to plausibly allege that Epic engaged in anticompetitive conduct.
Particle pushed back on that in its response. "Epic’s market definition arguments are intensely factual, ignore well-pleaded allegations, and bear no relationship to the standard for pleading a relevant market," the company wrote.
"Particle’s seventy-eight-page complaint provides a step-by-step description of how a monopolist desperate for control is willing to destroy an innovator with an objectively better product to put more dollars in its pockets. Epic can try to defend its actions at the appropriate time, but it identifies no basis to dismiss the Complaint now. The motion should be denied," Particle wrote in its Jan. 9 reply to the motion to dismiss.
Epic also wrote in its motion to dismiss that Particle's and Epic's software are not the only EHR products sold to payers. "Myriad software products exist to address payers’ health record needs that appear to compete with Particle’s and Epic’s products," Epic wrote, citing competitors Datavant, InterSystems’ HealthShare and Availity.
Brendan Keeler, an interoperability and data liquidity practice lead at HTD Health who has been following the case, said in a LinkedIn post that Particle made a "strong showing" that market definition based on customer type can be appropriate where customers have unique needs and constraints.
But, Keeler, a self-described advocate for interoperability and healthcare integration, said Particle still does not adequately explain why companies like Datavant and InterSystems that appear to offer similar services should be excluded from market definition.
Keeler said he expected the court will rule for dismissal with leave to allow Particle to amend its lawsuit.
Friday evening, Epic filed its final reply to support its attempt to have the court throw out Particle's antitrust lawsuit. The company doubled down on its argument that Particle makes "fatally deficient claims" in its lawsuit and in its opposition to Epic's motion to dismiss.
"Particle’s opposition makes clear that this case is nothing more than a vehicle for Particle’s baseless retributive attack directed at Epic for bringing to light that Particle enabled its customers—including Integritort, which sells medical records to lawyers for class action lawsuits—to obtain confidential patient medical records under false pretenses," Epic wrote. "Desperate to maintain its business model that has been exposed as exploiting confidential patient data for profit, Particle deflects responsibility and invents claims where none exists."
Keeler, in a LinkedIn post, said Epic's reply memo filed Friday is "more pointed and aggressive than the initial motion" as the company, in response to Particle's counterarguments, "is now directly targeting perceived weaknesses in Particle's position."
Epic argued for the case to be dismissed "with prejudice."
In response to Epic's latest court filing, a Particle spokesperson said, "We remain confident in the strength of the case and that our claims will survive the motion."
How the feud between Epic, Particle Health unfolded
Particle's lawsuit, in part, stems from developments last spring and growing tensions between the two companies over access and use of patients' clinical data. The dispute centered on who is accessing patients' health data, for what purposes and the proper gatekeeping process to safeguard medical data.
Both Epic and Particle are connected to Carequality, which operates a nationwide health data exchange service used by more than 600,000 care providers, 50,000 clinics and 4,200 hospitals to access patients’ medical records. Carequality says it supports the exchange of 1 billion clinical documents each month.
Epic filed a formal dispute with Carequality on March 21, claiming that Particle was sharing patient data with some companies who were then using the data for reasons unrelated to treatment. "This poses potential security and privacy risks, including the potential for HIPAA Privacy Rule violations in the event disclosures of protected health information were made under the Treatment Permitted Purpose when the requesting entities did not have treatment relationships with the patients to whom the records related,” Epic said in the notice to its customers, which was viewed by Fierce Healthcare.
Tensions between the two companies got heated in April when Epic cut off data requests from some Particle customers, citing concerns about potentially inappropriate disclosures of protected health information and privacy risks to patients’ medical data, according to a notice sent to Epic customers April 10.
In the ensuing months, there was a closed-door resolution process involving Carequality’s steering committee that aimed to settle the internal conflict over healthcare data exchange practices.
Carequality confidentially issued a resolution in late August, according to Epic's court filing. The organization then released a redacted version of its dispute resolution to the public in October.