Practice Fusion Ordered To Pay $145 Million Fine For “Abhorrent” Opioid Prescription Kickback Scheme

San-Francisco-based medical records startup Practice Fusion has been ordered to pay a $145 million fine. This is in addition to an admission that it "solicited and received kickbacks from a major opioid company" in exchange for utilizing its EHR software to manipulate physician prescribing of opioid pain medications, according to a release from the U.S. Department of Justice.

In the settlement, the company will pay around $25.4 million in criminal fines, about $113.4 million to the federal government and up to $5.2 million to individual states participating in separate state agreements, as well as forfeiting criminal proceeds of nearly $1 million.

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“Practice Fusion’s conduct is abhorrent. During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids,” said U.S. Attorney for the District of Vermont Christina Nolan in a news release. “The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts.”

According to court documents released by federal prosecutors, Practice Fusion solicited a $1 million payment from the unnamed opioid company. In exchange, it would create alerts in its software prompting physicians to write more prescriptions than were medically required. The system generated more than 230 million alerts between 2016 and 2019.

The company’s conduct highlights the worst-case scenario in which stakeholders can abuse tools to promote their vested monetary interests.

Just a few years ago, Practice Fusion was backed by top venture capital firms, including at Founders Fund, Kleiner Perkins and Artis Ventures, and was even eyeing the possibility of an IPO. However, its acquisition by Allscripts for $100 million at the start of 2018 put an end to that.

A statement released by Allscripts vice president read: “Since learning of this matter we have further strengthened Practice Fusion’s compliance program. Allscripts recognizes the devastating impact that opioids have had on communities nationwide, and we are using our technology to fight this epidemic.”

The company is no stranger to controversy. In 2016 Practice Fusion settled with the Federal Trade Commission after being charged with soliciting patient reviews and posting them online without concealing people's personal and identifying information.