Epic sued over software allegedly double-billing for anesthesia

A newly unsealed lawsuit claims billing software made by Epic Systems has caused hundreds of hospitals to double-bill Medicaid and Medicare for anesthesia services which could have resulted in hundreds of millions of dollars in improper claims to CMS.

The plaintiff in the suit is Geraldine Petrowski, who worked as a supervisor of physician coding at Raleigh, North Carolina-based WakeMed Health from 2008 to 2014. She was trained on Epic’s Resolute Billing Charge Capture system in 2012 ahead of its implementation at WakeMed. According to the suit she filed in 2015, she discovered Epic didn’t adjust the software to 2012 CMS standards on how to bill for anesthesia services. The default setting is to charge for both the “base units” to be reported on the claim form—which CMS had said shouldn’t be included—as well as the actual time a physician had taken on the procedure.

When the issue was brought to Epic’s attention, Petrowski claimed its response was “all other hospitals are billing base units,” and said it had built other systems the same way. Eventually, Epic supposedly modified the software just for WakeMed and the lawsuit alleged it’s “probable” that most facilities using Epic’s Resolute Billing Charge Capture are double billing for anesthesia services.

“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,” the lawsuit said.

Included as exhibits in the complaint were the list of hundreds of hospitals and health systems which use the software as well as a bill from MD Anderson Cancer Center which allegedly shows the Epic software improperly billed for two extra hours of anesthesia on a prostate removal procedure.

For each violation of the False Claims Act, a defendant would be liable for treble damages and penalties of up to $10,000 for each false claim.

Unlike other whistleblower lawsuits, the U.S. Department of Justice declined to join the case, which was noted by an Epic spokesperson who denied the allegations.

“The plaintiff’s assertions represent a fundamental misunderstanding of how claims software works,” the spokesperson said in a statement.