Item 1.01 Entry into a Material Definitive Agreement.
On January 27, 2020 Practice Fusion, Inc. ("Practice Fusion"), an indirect,
wholly-owned subsidiary of Allscripts Healthcare Solutions, Inc. (the
"Company"), entered into a series of agreements to resolve a previously
disclosed investigation conducted by the Department of Justice ("DOJ") and the
U.S. Attorney for the District of Vermont. The investigation related to the
certification Practice Fusion obtained in connection with the U.S. Department of
Health and Human Services' Electronic Health Record Incentive Program and
Practice Fusion's compliance with the Anti-Kickback Statute (the "AKS") as it
relates to certain business practices previously engaged in by Practice Fusion.
Practice Fusion has entered a three-year deferred prosecution agreement with the
U.S. Attorney for the District of Vermont ("Deferred Prosecution Agreement") and
a civil settlement agreement with the DOJ ("Civil Settlement Agreement"), and is
entering into separate civil settlement agreements with the Medicaid programs
for each U.S. state, the District of Columbia and Puerto Rico ("State Settlement
Agreements" and, together with the Deferred Prosecution Agreement and the Civil
Settlement Agreement, the "Agreements"). The financial terms of the Agreements
are substantially similar to the preliminary agreements in principle that
Practice Fusion disclosed in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2019 filed with the SEC on November 5,
2019.
Deferred Prosecution Agreement
Under the Deferred Prosecution Agreement, Practice Fusion consented to the
filing of a two count criminal information: one felony count of violating the
AKS and one felony count of conspiracy to violate the AKS. The Deferred
Prosecution Agreement requires Practice Fusion to pay a criminal fine of $25.3
million and a forfeiture payment of $959,700 within ten days of the court
accepting the Deferred Prosecution Agreement. The Deferred Prosecution
Agreement also requires that the Company and Practice Fusion regularly review
and certify compliance with the Deferred Prosecution Agreement. In the event
that Practice Fusion fails to satisfy its obligations under the Deferred
Prosecution Agreement, Practice Fusion could be subject to additional criminal
penalties or prosecution. Practice Fusion has also agreed to implement
Additional Civil Compliance Terms, which include the appointment of an Oversight
Organization, and the implementation of a Compliance Addendum. The Oversight
Organization Mandate requires Practice Fusion to retain an oversight
organization selected by the U.S. Attorney's Office for the District of Vermont
for three years. The Oversight Organization is required to take steps to provide
reasonable assurance that Practice Fusion establishes and maintains compliance
systems, controls and processes reasonably designed, implemented and operated to
ensure Practice Fusion's compliance with the terms of the Deferred Prosecution
Agreement. The Compliance Addendum requires Practice Fusion to, within 90 days
of the execution of the Deferred Prosecution Agreement, implement and maintain a
Sponsored Clinical Decision Support ("CDS") Compliance Program that sets
procedures and systems to review all current or future Sponsored CDSs on the
Practice Fusion electronic health records system. Practice Fusion is subject to
the Compliance Addendum for a three-year period from the effective date. The
foregoing summary of certain terms of the Deferred Prosecution Agreement is
qualified in its entirety by the terms of the Deferred Prosecution Agreement,
which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
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Civil Settlement Agreement and State Settlement Agreements
Practice Fusion also entered into the Civil Settlement Agreement to resolve
allegations by the DOJ that false claims were submitted to governmental
healthcare programs. The Civil Settlement Agreement requires Practice Fusion to
pay a civil settlement of $118.6 million, which includes $5.2 million designated
for the state Medicaid program expenditures. The payment term is over a period
of nine months from the effective date of the Civil Settlement Agreement. The
foregoing summary of certain terms of the Civil Settlement Agreement is
qualified in its entirety by the terms of the Civil Settlement Agreement, which
is filed as Exhibit 10.2 to this Current Report on Form 8-K.
Practice Fusion also agreed to enter into the State Settlement Agreements to
resolve Medicaid claims under state law analogues to the federal False Claims
Act. The financial terms of the State Settlement Agreements are substantially
similar to those set forth in the Civil Settlement Agreement. As noted above,
participating states, the District of Columbia and Puerto Rico will receive up
to $5.2 million in the aggregate from the $118.6 million paid pursuant to the
Civil Settlement Agreement. The Office of the Inspector General of the U.S.
Department of Health and Human Services has advised the Company that no
Corporate Integrity Agreement will be imposed on the companies as a part of this
resolution.
Item 9.01Financial Statement and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Deferred Prosecution Agreement, dated January 27, 2020.
10.2 Civil Settlement Agreement, dated January 26, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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