EHR Lawsuits Continue to Pile Up

Dozens of Indiana hospitals implicated in new class action suit alleging CMS reimbursement fraud.

More than 60 hospitals in Indiana are facing accusations this week that they, along with a Georgia-based health information management company, inaccurately reported compliance with Medicare Meaningful Use measures and defrauded taxpayers of millions.

The 44-page lawsuit, filed in March in the US District Court of Northern Indiana, was unsealed this week. It alleges that there is “good cause to believe” that 62 hospitals are “defrauding the American public by falsely recording or reporting their compliance with Core Measure No. 11 of the EHR Program.” That Meaningful Use provision requires providers to grant patients access to their electronic health record (EHR) information within 3 business days of a formal request.

The suit was filed by Michael P. Misch and Bradley P. Colborn of the Anderson Agostino & Keller law firm, who claim to have continually noticed delays in obtaining EHR information at select hospitals while representing patients in medical malpractice cases.

Hospitals are required to report their compliance data to CMS annually. In 2013, Memorial Hospital of South Bend reported successfully fulfilling requests 16 out of 16 times within the assigned time period. Misch and Colborn, however, state that in 2013 they submitted 5 requests to the hospital on behalf of patients. “On only one occasion were records received in an electronic format, and not a single time were these records issued within three business days of the request,” their filing alleges.

Providers that violated Stage 1 Meaningful Use measures in 2013 were subject to a 1% reduction in their 2015 reimbursement. The lawsuit claims that Memorial Hospital of South Bend “illegally and fraudulently claimed and received” over $8 million in Medicare and Medicaid payments due to the alleged violations.

When combined with the other 61 hospitals named in the suit, the attorneys claim the total fraud exceeds $324 million.

In addition to Memorial Hospital of South Bend, the complaint alleges that the attorneys encountered similar results when filing requests with 3 more hospitals: Saint Joseph Regional Medical Center, Saint Joseph Regional Medical Center - Plymouth Campus, and St. Vincent Hospital and Health Care Center. An additional 58 hospitals are named in the suit based on “a stark statistical trend” that is “highly” indicative of similarly fraudulent reporting.

The accusations also extend to health record management company Ciox Health: Misch and Colborn claim the Georgia firm “conspired with or is otherwise responsible for causing false statements” to be submitted to the Federal government. Ciox manages medical record requests for the 4 primary defendant hospitals, and is being sued for violation of the federal Anti-Kickback Statute.

The lawsuit is further evidence of the challenges faced by hospitals and tech companies in light of recent reimbursement provisions. While there is a great focus on EHR adoption inequities, legal compliance while working with third-party providers can also cause headaches. Earlier this month, a billion-dollar lawsuit was filed against EHR vendor eClinicalWorks alleging that faulty software led to extensive patient injury. In another November lawsuit, it was alleged that issues with Epic Systems EHR software led to providers overbilling CMS by “hundreds of millions” of dollars.