Lawsuit Claims Epic Overcharged Government by "Hundreds of Millions"

Jack Murtha

The company refutes the allegations, which stem from anesthesia billing software.

Photos have been resized. Credit: MR, Flickr user.

Epic Systems allegedly enabled widespread overbilling of Medicaid and Medicare, according to a recently unsealed lawsuit. The healthcare software giant, however, denies any wrongdoing.

A former compliance staffer for WakeMed Health in North Carolina filed the 3-count complaint under the False Claims Act 2 years ago, but a court uncloaked it only last week. Geraldine Petrowski lodged the civil suit on behalf of the United States government, the victim of Epic’s alleged misdeeds, according to a copy of the document.

The issue relates to how Epic’s Resolute Billing Charge Capture System calculates the time billed for anesthesia services. Petrowski alleged the software does so “incorrectly,” doubling the amount paid by the government to healthcare providers.

“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 and her legal counsel, the Florida-based Linesch Firm, wrote in an amended complaint.

But Epic—whose software reaches 54% of all American patients—is pushing back against the allegations.

“The Department of Justice did its own expert review and decided not to move forward,” Meghan Roh, a spokesperson for the organization, said in a statement. “The plaintiff’s assertions represent a fundamental misunderstanding of how claims software works.”

Contacted by Healthcare Analytics News™, a Department of Justice spokesperson declined to confirm whether it performed a review or comment on the case.

Although Petrowski did not work for Epic, she attended training at its Wisconsin headquarters, according to the complaint. There, she learned about the billing software and earned analyst certifications for the 2012 and 2014 systems, the suit claims. She was responsible for helping Epic representatives implement the software at WakeMed, where she worked from 2008 to 2014.

Upon her return, she uploaded codes to ensure proper pricing and verify that the number translated to payment claim forms, according to the suit. She claims to have “worked vigorously” to confirm that Epic’s software code for anesthesia billing lined up with Medicare and Medicaid guidelines.

Eventually, Petrowski “began to develop major concerns in regard to incorrect billing practices that were driven by [Epic’s] billing software,” according to the complaint. The government changed its invoice and reimbursement practices for anesthesia services in 2012, mandating that only the physician’s actual time be submitted, the lawsuit notes. But, she claims, Epic allowed hospitals to charge for both time and the base unit, which represented 1 point for every 15 minutes.

The whistleblower alerted Epic staffers to the inconsistency several times, the lawsuit alleges. At one point, the company removed the base unit submission from WakeMed’s billing module, but an employee allegedly told Petrowski that Epic software at all other hospitals include the feature, according to the complaint.

In the document, she and her attorneys point to a medical bill belonging to a man who required anesthesia for a surgery in June 2016 at MD Anderson Cancer Center in Texas. Epic’s allegedly deficient software billed the government 7 hours, or 2 hours and 15 minutes more than the logbook suggests was necessary, the complaint claims.

The suit also alleges that Epic’s anesthesia billing handbook continues to advocate the practice.

The action claims the company “knowingly, or acting with deliberate ignorance and/or reckless disregard of the truth, made false representations about the software it provided,” leading to the alleged double billing. Petrowski filed 3 False Claim Act counts, seeking damages and civil penalties and payment to the government.

She filed the complaint in Florida and demanded a jury trial.