Epic Hit With Antitrust Lawsuit By Data Startup Particle Health

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Dive Brief:

• Particle Health filed an antitrust lawsuit against Epic on Monday, alleging the electronic health record giant wielded control over patient information to damage the health data startup’s business.
• The suit argued Epic used its position as a “monopolist in the EHR software market” to deny health data access to Particle’s customers and squash competition for payer platforms, or tools that help insurers obtain and analyze medical records.
• The litigation comes months after a dispute this spring when Epic cut off data requests from some Particle customers, citing unauthorized uses of patient information and privacy risks. An Epic spokesperson called the lawsuit “baseless.”

Dive Insight: 

Up to 94% of patients in the U.S. have at least one medical record stored in Epic’s EHR, typically giving the company control over where that data is distributed, according to the lawsuit, filed in the Southern District of New York. 

Meanwhile, Particle is a relatively new venture-backed startup that aims to help healthcare organizations share and analyze data. The company was founded in 2018 and just entered the payer platform market last year, according to the complaint.

Vendors like Epic are required to share records for treatment purposes, which historically excluded payers, according to the lawsuit. But as more insurers have moved into healthcare delivery, they can access patient data and use it for other tasks, like population health management or processing claims — opening the door for new entrants. 

Particle alleged that Epic tried to shut the startup out of the payer market.

“Epic therefore set out to eliminate any whiff of competition in this relatively new market, so it could continue to extend its dominance and erect an impregnable moat around payer platforms,” the lawsuit said. “Epic accordingly began a multi-pronged campaign to destroy Particle and actively snuff out competition, which only meaningfully showed up once Particle began its recent, swift growth.”

Particle said the EHR vendor began to “suddenly and arbitrarily” deny dozens of customers access to Epic’s records in March, telling users they could resume access if they stopped using Particle’s platform.

Epic also launched a dispute process with interoperability framework Carequality, which supports the exchange of millions of health documents each month, arguing Particle might be inaccurately representing why it was requesting records.

Particle said the dispute resolution process lasted for more than five months, and Epic used its “power and influence” over the information exchange to require the startup to implement a corrective action plan.

Particle alleged Epic’s comments about data security and privacy risks were false, but they destroyed public trust in the company. The startup also argued Epic slowed the onboarding process for new Particle customers, with the time to connect sometimes taking more than a month when it previously took about two days, according to the lawsuit. 

Particle argued its revenue growth has since declined significantly. The startup is seeking monetary damages and wants Epic to “cease its anticompetitive conduct,” according to a press release. 

In a statement to Healthcare Dive, Epic said the lawsuit aims to divert attention away from Particle’s “unlawful actions” on the Carequality exchange that violated HIPAA privacy protections. 

“Epic’s software is open and interoperable, allowing healthcare organizations to easily share data under HIPAA and all relevant regulations,” an Epic spokesperson said. “Epic will continue to protect patient privacy and vigorously defend itself against Particle’s meritless claims.”