Epic Mounts Clumsy Public Defense On False Claims Lawsuit

A former employee of a health system using Epic filed a False Claims Act whistleblower suit claiming that the vendor’s platform overbills for anesthesia services by default. The suit claims that Epic’s billing software double-bills both Medicare and Medicaid for anesthesia, as well as commercial payers.

At this point, let me be clear that I’m not accusing anyone of anything, but in theory, this could be a very big deal. One could certainly imagine a scenario in which multiple Epic customers colluded to permit this level of overbilling, which could generate staggering levels of overpayment. If so, one could imagine hospitals and health systems paying out judgments that add up to billions of dollars. To date, though, nobody’s made such a suggestion. In fact, Epic has said essentially the opposite and pointed to the need to understand how medical billing works, but we’ll get to that.

In the suit, which was filed in 2015 but unsealed this month, Geraldine Petrowski contended that Epic’s software was billing for both the base units of anesthesia for procedures and the time the procedure took.

Petrowski, a former employee with the compliance team at Raleigh, N.C.-based WakeMed Health & Hospitals, alleges that setting the billing to these defaults has resulted in “hundreds of millions of dollars in fraudulent bills” submitted to Medicare, Medicaid and other payers. (WakeMed is an Epic customer.)

According to an article appearing in Modern Healthcare, Petrowski developed these concerns when she worked with Epic as the provider’s liaison for its software implementation between 2012 and 2014. In the complaint, she says that she raised these concerns with Epic, but got a dismissive response. Eventually, after Petrowski kept up the pressure for a while, Epic fixed the billing issue — but only for WakeMed.

Apparently, the U.S. Department of Justice reviewed Petrowski’s case and decided not to intervene, a fact which Epic has not-surprisingly mentioned every chance it gets. Perhaps more tellingly, the vendor has suggested that Petrowski filed the suit largely because she’s clueless. “The plaintiff’s assertions represent a fundamental misunderstanding of how claims software works,” Epic spokesperson Meghan Roh told the magazine.

Now, I don’t want to go off on a rant here, but if the best public defense Epic can mount in this case is to offer some mixture of “everybody’s doing it” and “you’re a big dummy,” you’ve got to wonder what it’s got to hide.

Not only that, trying to brush off the suit as the product of ignorance or inexperience makes no sense given what’s involved. While False Claims whistleblowers can collect a very large payoff, getting there can take many years of grueling work, and their odds of prevailing aren’t great even if they make it through the torturous litigation process.

No, I’m more inclined to think that Epic has tipped its hand already. I’d argue that fixing only the WakeMed billing system shows what the legal folks call mens rea – a guilty mind — or at least a willingness to ignore potential wrongdoing. Not only that, if the system was operating as expected, why would Epic have gotten involved in the first place? Its consulting services don’t come cheap, and I’m guessing that Petrowski didn’t have the authority to pay for them.

It doesn’t look good, people…it just doesn’t look good.

Sure, the hospitals and health systems using Epic’s billing solution are ultimately responsible for the results. Maybe Epic is completely blameless in the matter this case. Regardless, if Epic’s hands are clean, it could do a better job of acting like it.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

2 Comments

  • I am not employed by Epic Corp and am not interested in defending this company, however the author fails to understand some of the basics of programming.
    The software vendor would not need to mount ANY defense, clumsy or otherwise, for a customers decisions.
    In order to meet the needs of every healthcare organization EMR software needs to be extremely configurable. This flexibility allows options, some of which could be improper. You can be sure no EMR vendor would install any programming which created fraudulent billing. This would have been customized code written by the customer.
    Not being familiar with this situation I would guess someone involved with the software implementation was uncomfortable with the billing practices employed in this organization and was possibly terminated for expressing this opinion. This led that individual to contact the Justice Department.
    Medicaid/Medicare fraud is rampant. The U.S. Department of Justice receives so many complaints they cannot investigate them all, due to a lack of resources. The DOJ pursues the cases with the highest dollar value. This is very possibly why the author is aware of this particular situation.

  • Thanks for commenting Marc. You may be right about Epic. We’ll see where this all goes. However, it’s quite possible that an EMR vendor could program it with fraudulent billing. Just look at eCW’s actions to show that EHR vendors aren’t above creating something fraudulent. It seems unlikely that Epic would, so I agree with you there, but it is certainly in the realm of possibility.

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