Allscripts pays $145 million to settle Practice Fusion civil and criminal investigation


Allscripts has agreed to pay $145 million to resolve potential civil and criminal liability in connection to a Department of Justice investigation into the business practices of Practice Fusion, a company it acquired in 2018, the EHR technology company said in its second quarter earnings report yesterday.

Practice Fusion, an ambulatory electronic health record vendor, was being investigated for its ONC certification and compliance with HIPAA and federal anti-kickback laws, prior to being acquired by Allscripts. In March, Practice Fusion received a grand jury subpoena in connection with a related criminal investigation, according to Allscripts  in its Q1 report filed with the Securities and Exchange Commission.

Despite reporting strong second quarter bookings increases of 31% over the previous year, Allscripts had a second quarter net loss of $150 million, compared to income of $65 million in the second quarter of 2018, according to the earnings report

Allscripts bought Practice Fusion based in San Francisco for $100 million in cash in 2018, after acquiring McKesson’s health IT business a year earlier. 

Practice Fusion’s cloud-based electronic health record for small and independent physician practices gave Allscripts a larger footprint in outpatient setting.

“Our strong bookings performance continued in the second quarter with success in both our Provider and Veradigm businesses,” said Paul M. Black, CEO of Allscripts. “Our 2019 bookings outlook has been raised, as we anticipate strong performance in the second half of this year. This is the result of our deliberate investments, along with the value we deliver to clients through our comprehensive and industry-leading solutions.”

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