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This past week, New York Judge Naomi Reice Buchwald denied Epic Systems' motion to dismiss all claims in the antitrust lawsuit Particle Health filed last year.
WHY IT MATTERS
Epic claims the lawsuit was filed in retaliation for barring certain Particle Health payer clients from allegedly obtaining confidential patient records under pretenses, and asserted "that Particle has impermissibly gerrymandered a market that is restricted to one sub-group of customers within the broader [electronic health record] software market."
Buchwald sided with Particle that the relevant product market in the case could be the payer platform market. She, however, did deny Particle's claim that it was subjected to anticompetitive conduct by Epic.
Particle Health first filed suit against Epic in the Southern District of New York in September 2024, seeking monetary damages and injunctive relief last year after a six-month dispute related to the Carequality health information exchange network.
In December 2024, Epic first filed a motion to dismiss Particle's case, which alleged it had violated the Sherman Antitrust Act. The EHR market leader said it was "confident in our independent and non-biased dispute resolution process."
Nearly nine months later, the first 18 pages of Buchwald's more than 60-page memorandum and order walked through the facts of Particle Health Inc. v. Epic Systems Corporation and legal standards, before the judge began her analysis of Particle’s various antitrust claims in light of the fledgling payer platform market.
Epic's motion to dismiss contended that Particle failed to plausibly allege "(i) the existence of a relevant antitrust product market; (ii) that Epic engaged in anticompetitive conduct and (iii) antitrust injury," she noted.
Overall, Buchwald's analysis largely boiled down to a dispute over what kind of retrieval functions each company's products offer.
"This disagreement regarding one of the foundational facts in this case – whether the parties’ products perform the same basic functions – is frustrating," she wrote. "However, at the motion to dismiss stage, this court must 'accept as true all factual allegations in the complaint and draw all reasonable inferences'" in favor of the plaintiff.
"Accordingly, Epic’s motion to dismiss Particle’s antitrust claims due to its failure to plead a relevant product market is denied," she added.
"At this stage of the litigation, Particle has adequately alleged that both Epic’s and Particle’s payer platform software contain features designed specifically to suit payers’ unique needs – in particular, their need to retrieve medical records digitally, instantly and at scale," Buchwald said.
She dismissed some of Particle's claims, including Epic's alleged manipulative conduct derived from its role in the Care Everywhere Governing Council to "apply an anticompetitive policy to oust Particle from the payer-platform market."
But Buchwald is allowing the payer interoperability company's monopolization claims under Section 2 of the Sherman Act, along with some state law claims, based on her ruling.
"This is the first time in Epic's history that an antitrust case against them has gotten to this point," said Particle Health CEO Jason Prestinario in a statement emailed to Healthcare IT News last week. "It's the next step to a bigger victory for better patient care and more patient control of their medical info!"
"The Court dismissed the majority of Particle’s claims," an Epic spokesperson said by email on Friday. "The ruling included the observation that Carequality’s 'imposition of the corrective action plan [on Particle] was entirely reasonable.'
"Epic has worked and will continue to work to protect the privacy of patients' data. We look forward to the opportunity to present evidence to prevail on the remaining claims."
THE LARGER TREND
Epic filed to dismiss the antitrust lawsuit in December, calling the case retribution for confronting Particle for enabling some of its customers to obtain confidential patient medical records under pretenses on the Carequality health information exchange network.
The court battle highlights how trust in national health information exchange can be easily broken and patient privacy under HIPAA can be shirked. Epic said that because endpoints that are not HIPAA-covered entities may request and exchange data, it might lead some health systems to consider forgoing participation in that network, under the Trusted Exchange Framework and Common Agreement.
Particle founder Troy Bannister had said on social media when the company filed its suit that despite Epic disconnecting providers on a "massive scale" without warning, Particle would remain connected to the HIE framework.
Epic, however, insisted the Carequality resolution, released to the public the month after the lawsuit was filed, showed it did not treat Particle Health any differently in reviewing its connections under HIPAA. It had dismissed providers perceived to be using a masked gateway when making their patient health information requests, which could indicate a potential HIPAA breach and would qualify for investigation under TEFCA and Carequality.
However, Particle said Carequality's dispute resolution showed that the construct of the gateways was simply a matter of interpretation of Carequality's technical requirements.
"Particle Health provided Carequality and Epic with the attestations needed for all three customers in question, including an attestation of the BAAs for the payer-provider relationships," a Particle Health spokesperson told Healthcare IT News before the new year.
ON THE RECORD
"Very pleased at the outcome that came out [Sept. 4] in our anti-trust case against Epic," Prestinario said by email. "While a few of the claims didn't survive, Epic's motion to dismiss was denied on all three of the core monopolization antitrust claims."
Andrea Fox is senior editor of Healthcare IT News.
Email: afox@himss.org
Healthcare IT News is a HIMSS Media publication.
