Epic Systems is asking a district court to throw out Particle Health’s antitrust lawsuit, arguing that the startup failed to present the electronic health record company’s anticompetitive conduct in its suit.
Epic filed a motion to dismiss late Thursday evening, seeking to dismiss Particle Health’s lawsuit through oral arguments.
Venture-backed health tech company Particle Health filed an antitrust lawsuit against Epic in September in the Southern District of New York alleging that the EHR giant is trying to muscle out competition. Particle Health is a data platform that aggregates health information for digital health companies through APIs, providing access to more than 300 million patients’ medical records. With a 36% market share of the hospital sector, electronic health record giant Epic is a dominant force in the health IT industry.
The 81-page lawsuit (PDF) alleges Epic engaged in monopolistic, anticompetitive practices, using its “power over EHRs to expand its dominance into the fledgling market for payer platforms,” according to the lawsuit.
Particle Health argues in its federal complaint that Epic has not only engaged in anticompetitive behavior but has purposefully blocked the exchange of patient information.
In its 45-page motion to dismiss, Epic claims the lawsuit is “nothing more than a baseless retributive attack by Particle against Epic.” The medical records software giant claims Particle Health is attacking Epic because, the company, “together with its health care provider customers, revealed that Particle enabled some of Particle’s customers to obtain confidential patient medical records under false pretenses.”
“We remain confident that our claims will survive the motion,” a Particle Health spokesperson said in an emailed statement.
In the court filing to support the antitrust dismissal, Epic said Particle failed to state an antitrust claim because it failed to plead a relevant antitrust product market and failed to plausibly allege that Epic engaged in anticompetitive conduct.
Starting last year, Particle expanded its services to payers to assist so-called “pay-viders” with accessing patients records for “secondary” purposes more typically associated with health insurance, like population health analytics or processing claim, which is allowed under HIPAA and the rules of health information networks, Particle said in its lawsuit.
“Epic is using its monopoly power over electronic health records (EHRs) to bar Particle from the fledgling payer platform market —just one example of Epic plotting to ‘snuff out’ competition in new markets that leverage medical records,” Particle Health executives said in a press release about the lawsuit.
However, Epic wrote in its motion to dismiss that Particle’s and Epic’s software are not the only electronic health record products sold to payers. “Myriad software products exist to address payers’ health record needs that appear to compete with Particle’s and Epic’s products,” Epic wrote, citing competitors Datavant, InterSystems’ HealthShare and Availity.
Particle also failed to plausibly allege antitrust injury, Epic argued in the court filing. “Particle has not plausibly alleged that Epic’s conduct adversely affected competition in the payer platform market,” the company wrote in the filing. “Particle alleges harm only to itself as opposed to harm to competition as a whole,” Epic wrote.
Epic also refutes Particle’s defamation and trade libel allegations in its lawsuit.
Particle’s lawsuit, in part, stems from developments last spring and growing tensions between the two companies over access and use of patients’ clinical data. The dispute centered on who is accessing patients’ health data, for what purposes and the proper gatekeeping process to safeguard medical data.
Both Epic and Particle Health are connected to Carequality, which operates a nationwide health data exchange service used by more than 600,000 care providers, 50,000 clinics and 4,200 hospitals to access patients’ medical records. Carequality says it supports the exchange of 1 billion clinical documents each month.
Epic filed a formal dispute with Carequality on March 21, claiming that Particle was sharing patient data with some companies who were then using the data for reasons unrelated to treatment. “This poses potential security and privacy risks, including the potential for HIPAA Privacy Rule violations in the event disclosures of protected health information were made under the Treatment Permitted Purpose when the requesting entities did not have treatment relationships with the patients to whom the records related,” Epic said in the notice to its customers, which was viewed by Fierce Healthcare.
Tensions between the two companies got heated in April when Epic cut off data requests from some Particle Health customers, citing concerns about potentially inappropriate disclosures of protected health information and privacy risks to patients’ medical data, according to a notice sent to Epic customers April 10.
In the ensuing months, there was a closed-door resolution process involving Carequality’s Steering Committee that aimed to settle the internal conflict over healthcare data exchange practices.
Carequality confidentially issued a resolution in late August, according to Epic’s court filing. The organization then released a redacted version of its dispute resolution to the public in October.
As a result of the resolution, Particle Health agreed to a corrective action plan and additional oversight for six months to confirm that it is thoroughly following Carequality’s process, including onboarding diligence, to prevent future issues with customers utilizing the network, according to the resolution.
As part of Carequality’s investigation into the disputed data exchange practices and outlined in the resolution, two of Particle Health’s customers were suspended from participating in Carequality for 12 months because those companies had inappropriately taken patient records by falsely claiming a treatment purpose.
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