Epic CEO Faulkner Tamps Down Lawsuit Talk in Regulatory Conflict With Feds

Jan. 24, 2020
A simmering conflict between Epic and HHS over a proposed data-sharing regulation had appeared to be escalating, with media reports of a campaign against the rule. But Epic now says it will not pursue a lawsuit against HHS.

Conflict between the Verona, Wis.-based Epic Systems Corporation and the Department of Health and Human Services (HHS) had appeared to be ramping up this week, based on media reports. On Wednesday, Jan. 22, Christina Farr of CNBC reported that “Epic Systems, one of the largest medical records companies, emailed the chief executives of some of the largest hospitals in the U.S. on Wednesday, urging them to oppose proposed regulation designed to make it easier to share medical information.”

What’s more, Farr wrote, “The email, which was written by Epic CEO Judy Faulkner and addressed to CEOs and presidents of hospital systems, urges recipients to sign a letter alongside Epic that voices disapproval for rules the Department of Health and Human Services proposed in 2019.”

And then on Friday, POLITICO’s Mohana Ravindranath, wrote, in the publication's “Morning eHealth” newsletter, that “Faulkner escalated her campaign against HHS' data sharing rules this week, triggering backlash from patients and advocates who say she's trying to protect the Wisconsin company's business interests at patients' expense.”

Rvindranath wrote in the newsletter, “Earlier this week, Faulkner told POLITICO that her company might sue HHS if the final versions of the two data sharing rules — expected early this year — are as objectionable as she found their draft versions. She argued that the rules don't provide privacy protections for patients, and that once patients send the data into unregulated apps that might sell or exploit it, it's impossible to get it back. And as CNBC reported , Faulkner also circulated a letter to its health system customers urging them to oppose the rules, as they appeared in draft form.”

But late in the afternoon on Friday, Jan. 24, Faulkner, through an Epic spokesperson, told Healthcare Innovation in an emailed statement, "Our goal is to work with HHS and the Administration to fix the proposed rule and make sure it is a good one. Epic's focus is on saving lives and improving healthcare for patients, and we have no interest in pursuing a lawsuit.”

Background on ONC's interoperability rule

Indeed, a proposed rule, issued nearly a year ago from the Office of the National Coordinator for Health IT (ONC), represents great significance for health IT stakeholders, who will now be more under the microscope than ever before as it relates to their efforts in making sure that health information is seamlessly moving—while not restricting such efforts. For example, key elements of the ONC rule are related to application programming interface (API) standards, electronic health record (EHR) certification, and EHR vendor business practices and behaviors. It also has a significant section devoted to information blocking with potentially hefty fines for violators.

Farr noted in her story, “The proposed rules have pit patient advocates against some doctor groups and companies, like Epic. Critics say they don’t have enough provisions to protect patients’ privacy. Epic’s Faulkner has been vocal in her criticism of the rule, which she believes will result in app makers having access to patient data without consent. On the other side, patient advocates have spoken out in favor of the rules, which aim to make medical records accessible through APIs. The rules are also designed to make it easier for hospitals to share patient records with other medical offices or hospitals. That’s been a big challenge for years, and studies have shown that it has a negative impact on patient’s health.”

EHR vendors are not alone in their opposition of the regulation, however. Other folks have attested that the proposed information blocking exceptions—of which there are seven—are “both complex and confusing.” One example of this is “significant confusion around the definition of ‘electronic health information’ or EHI, which forms the basis for much of the policies in the rule,” according to a group of leading industry associations—including the American Medical Association (AMA), the College of Healthcare Information Management Executives (CHIME) and others who penned a letter to members of Congress back in September, asking them to use their oversight authority to ensure that federal health officials improve certain elements of the rules.

Another group, the Health Innovation Alliance (HIA)—went as far as to formally call on ONC specifically to rescind its regulation, noting that the information blocking exceptions to the proposed rule are so vague that "they will produce a market worse than today's status quo."

On the privacy front, industry groups have been meeting health regulators over the past several months to push for changes in this area. Some are concerned that the rule, in its proposed, form, doesn’t include those technology companies that manage apps, nor does it cover the third-party apps themselves under proposed data blocking policies as among the actors who must comply with these policies. Yet, federal healthcare officials believe that by requiring software developers to publish APIs and integrate them into their EHRs, consumers can more easily access and download their medical data to third-party apps of their choosing.

Farr’s story created significant buzz on Twitter from industry stakeholders and observers, some who believe that Faulkner’s rationale for using concerns around patient privacy as a reason to oppose the rule is neither in good faith nor is it accurate since patient advocacy groups seem to be largely in favor of the regulation.

Bottom line: this is not a good faith argument. Not finalizing the rules will only benefit the largest and most powerful holders of patient data. Interoperability now! https://t.co/0mzxf1XBNv

— Lisa Bari (@lisabari) January 23, 2020

POLITICO's Ravindranath further noted in the newsletter that “Among critics of the letter was Aneesh Chopra, formerly White House chief technology officer under Barack Obama. Chopra told CNBC it was ‘unfortunate to see this much effort placed at stalling the important, bipartisan progress we have made to open up health information — at a minimum to consumers and institutions they trust.’”

Chopra also sent a tweet out this week that asked providers to tweet if their respective organization’s CEO plans to sign the letter from Epic.

anyone up for a roll call? tweet if your ceo plans to sign on to this letter? https://t.co/Bo9Y5KPypL

— Aneesh Chopra (@aneeshchopra) January 23, 2020

Healthcare Innovation has extensively covered the debate around the data-sharing rules and will keep readers updated on further developments.

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