Epic fired back at the Texas attorney general's allegations that it monopolizes the electronic health record market and unlawfully restricts parental access to their minor children’s medical records.
In a Jan. 20 filing in Tarrant County District Court, the electronic health record giant said the state's antitrust claims against it are pretextual and baseless. Epic denied Texas Attorney General Ken Paxton's allegations of anticompetitive behavior, citing a lack evidence and factual flaws in the lawsuit.
The company also said it plans to file a motion to dismiss the lawsuit. "Epic denies the state’s claims and intends to aggressively litigate this case to its full dismissal," the company wrote in its Answer and Affirmative Defenses filing.
"Epic denies each and every, all and singular, of the allegations made and contained in the petition and demands strict proof thereof," the company stated in the filing.
In December, the Texas attorney general filed a lawsuit against Epic alleging the health tech company monopolizes the EHR market and cements its dominance in the market through an "anticompetitive playbook." The lawsuit also accuses the company of engaging in deceptive practices that restrict parental access to their children’s health records. The Texas attorney general is bringing the claims against Epic under the Texas Free Enterprise and Antitrust Act and the Texas Deceptive Trade Practices Act.
In its filing, Epic listed 29 total affirmative defenses, arguing that the state's claims "have no basis in law or fact" and that the lawsuit "insufficiently alleged a relevant product market." The company also argued that it lacks the market power necessary to sustain the state’s monopolization claims in any properly defined relevant product market.
Epic argues in the filing that the state's lawsuit doesn’t actually describe anything illegal under antitrust law. "The petition has no viable theory of anticompetitive conduct," Epic said in the filing.
The Texas attorney general's arguments in the lawsuit assume that antitrust law requires Epic to let outside companies use its technology—even competitors—effectively for free, Epic contends. The company's position is that the law does not force a company to share its intellectual property, proprietary software or decades of internal know-how with third parties, according to the filing.
"The comprehensive civil investigation that the state performed before bringing this petition revealed nothing anticompetitive, deceptive, or illicit about Epic’s conduct,," the health IT company argued in the filing. "That is made clear by the fact that even after that six-month investigation, the petition relies heavily on dated, biased press articles and blog posts, and copies a different plaintiff’s unproven factual allegations from a complaint in a separate private lawsuit that Epic has moved to dismiss in its entirety."
"The failure by the state to come forward with facts or legitimate legal bases to support any of its claims, after conducting an investigation, is telling," Epic wrote.
Epic is a dominant player in the EHR market, with 42% of the hospital market on its platform. More than 325 million patients have an electronic record within Epic's system. The company also faces federal antitrust lawsuits filed by Particle Health and CureIS Healthcare, as both companies accuse Epic of anticompetitive practices.
Unlike the Particle Health and CureIS Healthcare cases, the Texas attorney general's case does not invoke federal Sherman Act claims.
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 health care 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.
In its filing, Epic pushed back on the Texas attorney general's claims that it is a “gatekeeper” of third-party access to its customers’ data.
Epic says it does not control access to patient health records nor determine who can access them; Epic’s customers control their own local copy or “instance” of Epic’s EHR software, are the custodians of, and control access to, their patients’ records, and bear responsibility under HIPAA and applicable state laws for how those records are used or disclosed, the company said.
"The state never identified a single alleged instance of reported noncompliance. And in its petition, there is no mention of a single instance of noncompliance by any Epic customer, let alone one that resulted in parents being denied access to their child’s records," Epic wrote.
The company also cited its leadership in interoperability efforts, claiming it was the first to develop software to allow for interoperability that follows patients irrespective of where they seek treatment. Epic is a founding member of Carequality, an interoperability framework, and all of its EHR software customers participate in Carequality, it says. Epic also was one of the first EHR software companies to sign on to and have live connections on the Trusted Exchange Framework and Common Agreement.
Epic claims that its customers are able to exchange more than 725 million medical records per month, and more than half of these exchanges are with non-Epic systems.
The company also noted that it provides a public library of more than 500 standards-based APIs available to third-party software developers. More than 1,500 different third-party applications currently connect to Epic customer systems using using secure data exchange tools that Epic makes available for free on open.epic.com, the company noted in the filing.
Epic also pushed back on the lawsuit's allegations with respect to its product pricing and discounting practices. "The state cannot decide within the petition itself whether to allege that Epic has unlawfully charged excessive prices leading to excessive profits or that it has charged artificially low prices for anticompetitive reasons. The state wants it both ways, but neither is accurate," the company stated.
Paxton, the Texas attorney general, 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.