Epic Hit with Lawsuit over “Double-Billing” for Anesthesia Services | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Epic Hit with Lawsuit over “Double-Billing” for Anesthesia Services

November 6, 2017
by Rajiv Leventhal
| Reprints

Epic Systems, the Verona, Wisconsin-based health IT giant, is facing a lawsuit in which the complainant has attested that the vendor’s software defaults to double-billing for anesthesia services, resulting in the government being overbilled by hundreds of millions of dollars.

According to a Law360 report last week, as well as other media reports, Epic’s billing software wrongly “defaults to charging for both the applicable ‘base units’ for anesthesia provided on a procedure, as well as the actual time taken for the procedure, resulting in payers being overcharged for anesthesia, relator Geraldine Petrowski said in an amended complaint in June that was unsealed [Nov. 2],” according to Law360.

“This unlawful billing protocol has resulted in the presentation of hundreds of millions of dollars in fraudulent bills for anesthesia services being submitted to Medicare and Medicaid as false claims,” Petrowski said. Petrowski served in various roles at Raleigh, N.C.-based WakeMed Health “between 2008 and 2014, serving as hospital liaison for the healthcare system’s implementation of Epic’s software, during the course of which she came across the anesthesia billing issues, developing ‘major concerns’ about incorrect billing, she said, according to Law360.

Other media reports included a statement from an Epic spokesperson who denied the Florida federal False Claims Act allegations. And in a statement emailed to Healthcare Informatics, Meghan Roh, public affairs for Epic, said, “The Department of Justice did its own expert review and decided not to move forward. The plaintiff’s assertions represent a fundamental misunderstanding of how claims software works.”

In 2012, Medicare altered its billing practices for anesthesia, requesting that hospitals change from a system based on billing “units,” equal to 15 minutes each, to billing in the actual minutes that a physician spent on a procedure.

As explained in the Law360 report, “Because that reimbursement protocol automatically adds in and reimburses at the appropriate minimum ‘base unit’ level—the minimum available reimbursement—for a particular medical procedure at Medicare’s end, base units are not meant to be reported on reimbursement forms,” according to Petrowski.

However, Epic's software allows hospitals to set up anesthesia billing to reflect not only the actual minutes worked but also the base unit for that particular procedure—and defaults to that setting, meaning hospitals are effectively reimbursed twice for the same procedure, Petrowski attested.

One example of this default setting in action is via a surgery bill from the MD Anderson Cancer Center, also an Epic customer, which Petrowski said had “overbilled Medicare by the equivalent of nine units— seven for the procedure, reflecting the base unit level, and two likely reflecting related start and stop time,” according to Law360.

The lawsuit attested that 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.

Earlier this year, eClinicalWorks, and some of its employees, paid $155 million to resolve a False Claims Act lawsuit in which the company allegedly violated federal law by misrepresenting the capabilities of its software and for allegedly paying kickbacks to certain customers in exchange for promoting its product, according to the U.S. Department of Justice.

Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

Geisinger National Precision Health Hires Illumina Exec to Lead Business Development

Integrated health system Geisinger has hired a high-profile genetic counselor to head up business development for Geisinger National Precision Health, which was created to extend the Geisinger model on the national scene.

$30M VC Fund Launched to Spur Innovation in Cardiovascular Care

The American Heart Association, together with Philips and UPMC, has announced the launch of Cardeation Capital, a $30 million collaborative venture capital fund designed to spur healthcare innovation in heart disease and stroke care.

Epic Wins Labor Dispute in Closely Divided Supreme Court Decision

Epic Systems Corporation won a major labor-law ruling in the Supreme Court on Monday, centering around the extent of corporations’ right to force employees to sign arbitration agreements, and with a 5-4 ruling in its favor

Survey: Two-Thirds of Physician Practices Seeking Out Value-Based Care Consulting Firms

Most physician organizations are not prepared for the move to value-based care, and 95 percent CIOs of group practices and large clinics state they do not have the information technology or staff in-house needed to transform value-based care end-to-end, according to a recent Black Book Market Research.

Cumberland Consulting Buys LinkEHR, Provider of Epic Help Desk Services

Cumberland Consulting Group, a healthcare consulting and services firm, has acquired LinkEHR, which provides remote application support, including Epic help desk services.

Population Health Tool that Provides City-Level Data Expands to 500 Cities

A data visualization tool that helps city officials understand the health status of their population, called the City Health Dashboard, has now expanded to 500 of the largest cities in the U.S., enabling local leaders to identify and take action around the most pressing health needs in their cities and communities.