Texas launches lawsuit against Epic

AUSTIN, Tx. – In December, EHR giant Epic was hit with a lawsuit as Texas Attorney General Ken Paxton (pictured) filed an action alleging the health tech company monopolizes the electronic health record market and cements its dominance through an “anticompetitive playbook.”

The suit also accuses the company of engaging in deceptive practices that restrict parental access to their minor children’s medical records. The Texas AG is bringing the claims against Epic under the Texas Free Enterprise and Antitrust Act (TFEAA) and the Texas Deceptive Trade Practices Act.

For its part, Epic is a dominant player in the EHR market, with 42% of the U.S. hospital market on its platform. More than 325 million U.S. patients have an electronic record within Epic’s system.

Epic also has a large footprint in Canada; Alberta has a province-wide deployment, and the provinces of Newfoundland and Labrador, and Quebec, are aiming to implement the system throughout their jurisdictions. Many Canadian hospitals have switched to Epic, as well, including SickKids, UHN, and Mackenzie Health in the Toronto area.

The Texas attorney general’s office alleges Epic “uses a wide range of exclusionary tactics to prevent potential competition from its partners, customers and even its own employees.”

“Epic also interferes with hospitals’ ability to use its own patient data as part of its scheme to block software competitors. As a result, Texas patients experience diminished quality of healthcare due to their preferred physicians receiving incomplete or out-of-date patient health records,” Paxton alleges in the lawsuit.

According to the suit, these anticompetitive practices harm Texas hospitals and Texas patients by raising costs and blocking innovative technologies.

Epic also faces federal antitrust lawsuits filed by Particle Health and CureIS Healthcare, as both companies accuse Epic of anti-competitive practices.

Unlike the Particle Health and CureIS Healthcare cases, the Texas AG’s case does not invoke federal Sherman Act claims.

Paxton also alleges in the lawsuit that Epic “exploits its control” over patient medical records to automatically hide children’s medication lists, treatment notes and provider messages from parents when their child reaches 12 years old. Texas alleges that Epic’s default proxy-access configurations impede parents’ ability to see their children’s health information.

“These deceptive practices undermine the fundamental right of parents to direct their children’s healthcare” and violate Texas law, which grants parents complete and unrestricted access to their children’s medical records, the attorney general’s office said in the lawsuit.

“We will not allow woke corporations to undermine the sacred rights of parents to protect and oversee their kids’ medical well-being,” Paxton said in a statement. “This lawsuit aims to ensure that Texans can readily obtain access to these records and benefit from the lower costs and innovation that come from a truly competitive electronic health records market.”

In a statement, an Epic spokesperson said, “The action taken by Texas is flawed and misguided by its failure to understand both Epic’s business model and position in the market and the enormous contributions our company has made to our nation’s healthcare system illustrated by products like MyChart—software that tens of millions of Americans depend on every day.”

Epic answered, saying, “Every month, we improve quality of care by helping providers see a more comprehensive picture of their patient through over 725 million record exchanges – more than any other electronic health records vendor – and over half of these are with non-Epic systems,” the Epic spokesperson said. “Health systems using Epic shared information with almost 1,000 patient-facing apps 2 billion times in the past year.”

The spokesperson also noted that Epic “does not determine parental access to children’s medical records.”

“Decisions about parental access to children’s medical records are made by doctors and health systems, not by Epic,” the spokesperson said.

Paxton is seeking a court order that would force the company to reestablish competitive conditions, as well as monetary damages and fees for the state.

The lawsuit is a part of a broader initiative by Paxton to investigate EHR vendors’ compliance with state laws regarding parental access to medical records.

Earlier this year, the Texas Office of the Attorney General secured a settlement with Austin Diagnostic Clinic that required full restoration of parental proxy access for children aged 12 to 17. The attorney general has also issued civil investigative demands to other EHR software providers over parental access to minor children’s medical records.

Paxton has been involved in legal battles over transgender medical records. In 2023, Texas passed a law that bans gender-affirming medical care for youth under the age of 18. Paxton has demanded medical records of Texas youth who have received gender-affirming care from out-of-state providers. He’s also demanded that LGBTQ organization PFLAG National turn over information and documents about its support of Texas families seeking gender-affirming medical care for their transgender children.

Judges have issued temporary restraining orders and injunctions limiting the scope of the information Paxton can demand, the Dallas Voice reported.

The Texas lawsuit against Epic embeds parental rights and culture-war politics into antitrust claims against the company.

In the lawsuit, the Texas AG’s office writes, “Without parental proxy access, a minor-aged child could pursue medical care that directly contravenes the rights of parents and guardians to choose the manner in which to raise their child. For example, a minor child could seek medication or pursue an invasive medical procedure without fully understanding its long-term effects.”

Meanwhile, this month Epic and a group of healthcare providers announced they are taking legal action to defend patient privacy and protect sensitive medical information.

The lawsuit states that Health Gorilla, a health information network, enabled Mammoth, RavillaMed, and other companies to improperly access and monetize nearly 300,000 patient medical records from members of the Epic community. This is in addition to an unknown number of records taken from organizations nationwide, including from the VA and providers using other EHRs.

OCHIN, Reid Health, Trinity Health, UMass Memorial Health, and Epic have filed suit to stop conduct that threatens patient privacy and the integrity of care. The filing cites misconduct including that the defendants:

• “Operate as organized syndicates to monetize patient records without patients’ knowledge or consent.”
• “Request patient records for the purpose of treating patients but take patient records for other purposes including to market them to lawyers looking for potential claimants … to join mass tort or class action lawsuits.”
• “Obscure their true purpose through fictitious websites, shell entities, and sham National Provider Identification (NPI) numbers … to create an illusion of legitimate patient treatment activity.”
• Cover their tracks by inserting junk data into patient medical records “to give the false impression that they are treating patients, which risks patient safety and wastes valuable clinician time.”

The lawsuit continues, “when caught, rather than stopping their activity, the bad entity owners, operators and those in their inner circles simply create new companies. The scheme thus operates like a Hydra: when one fraudulent entity is exposed, the bad actors birth a new one” and “if not stopped, they will continue to inappropriately market the patient data they have already taken and will take more.”

“At stake are both the protection of medical records that contain some of a person’s most sensitive data, such as genetic, mental wellbeing, and reproductive information, and the ability of physicians to keep their promises to patients that their information will be kept private.”

“These actors are putting the enormous positive patient outcomes achieved through interoperability at imminent risk,” the legal filing explains. “When used appropriately, interoperability ensures that medical care is informed by a patient’s medical history, allowing healthcare providers to improve patient outcomes.”