Healthcare software giant Epic must face rival’s antitrust lawsuit, US judge rules

By Mike Scarcella

Sept 8 (Reuters) - Healthcare software giant Epic Systems has lost a bid to dismiss part of a lawsuit alleging it unlawfully monopolized the market for U.S. medical records and caused health plans to pay higher costs.

U.S. District Judge Naomi Reice Buchwald in Manhattan ruled on Friday that the plaintiff, healthcare data platform Particle Health, had presented enough information for now to pursue some claims that Epic violated antitrust law.

Epic runs an electronic repository for U.S. medical records and supplies them to third parties such as healthcare providers and insurers. Particle alleged Epic was trying to steer customers away from its “payer” software platform, which allows clients to access records held by Epic and other companies.

Buchwald in her ruling said “Epic’s conduct was sufficiently anticompetitive, and intended to exclude Particle from that market.” The court dismissed some antitrust claims from the lawsuit, in addition to allegations that Epic defamed Particle and interfered with its business relations.

Epic, which has denied any wrongdoing, in a statement said most of the case had been dismissed and it looked forward to "the opportunity to present evidence to prevail on the remaining claims."

Particle chief executive Jason Prestinario in a statement welcomed the judge’s order, which he said allowed its “core monopolization antitrust claims” to move forward.

“It's the next step to a bigger victory for better patient care and more patient control of their medical info,” Prestinario said.

New York-based Particle Health, founded in 2018, competes with Epic in the payer platform market, where insurers seek to review and store medical records at a large scale.

Epic controls health data on up to 94% of Americans, according to Particle’s lawsuit.

Particle said Epic has sought to coerce Particle’s customers to stop doing business with it and erected barriers for the company to bring on new clients.

In seeking dismissal, Epic called the lawsuit "a baseless retributive attack" that came after Epic and its customers revealed that Particle had obtained confidential patient medical records under false pretenses. Particle denied those allegations in a court filing.

The case is Particle Health Inc v Epic Systems Corp, U.S. District Court for the Southern District of New York, No. 1:24-cv-07174.

For plaintiff: Adam Wolfson and Kathryn Bonacorsi of Quinn Emanuel Urquhart & Sullivan

For defendant: Lauren Moskowitz and Margaret Segall of Cravath, Swaine & Moore

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