Allscripts has asked an Illinois district judge to dismiss a class-action lawsuit filed after a ransomware attack took down the EHR vendor’s servers for a week, adding that the dispute belongs in arbitration.
The lawsuit revolves around a January cyberattack involving a new variant of the SamSam virus. The attack brought down the company’s servers in North Carolina and knocked out access for nearly 1,500 physician practices. Several of those providers reverted to paper records and reported lost revenue and canceled procedures due to the disruption.
In a court filing (PDF) last week, Allscripts argued that Surfside Non-Surgical Orthopedics, the specialty practice that filed the lawsuit, intentionally sued the parent company of Allscripts Healthcare, LLC known as Allscripts Healthcare Solutions Inc. to avoid the arbitration clause outlined in its contract with the vendor.
Allscripts Healthcare Solutions Inc. is a “non-operating holding company with only eight officers, no employees, and no products or customers,” according to the filing.
“Plaintiff apparently hopes that, by suing a party with which it has no contractual or other business relationship, it can avoid the contract that governs the provision of the services it received from LLC,” Allscripts attorneys wrote in a court filing last week.
The company added that even if Surfside sued the right company, the injury was caused by a criminal act rather than Allscripts’ negligence. The company added that it explicitly warns about the inability to prevent all cyberattacks in its annual financial filings.
“A criminal attack executed using a brand-new malware variant is precisely the kind of unforeseeable intervening act that breaks the chain of proximate causation,” the court filing stated.
In a subsequent filing, Surfside’s attorneys maintained the parent company was to blame, adding that the company’s “acts and/or admissions affected the circumstances that gave rise to the attack and its fall-out.”
Surfside originally argued that SamSam has been a known vulnerability since March 2016, and the company’s “wanton, willful, and reckless disregard” led to service disruption.
In response, Allscripts apparently couldn’t resist a dig at Surfside, and any other providers that encountered disruptions from the attack.
“Customers who had appropriate contingency plans in place—the existence of which practices may certify annually to the federal government in exchange for certain financial incentives—were minimally impacted by the attack,” the company wrote in a footnote in its motion to dismiss.
The CMS wants to launch an experiment that allows doctors in Medicare Advantage plans to qualify as participating in an alternative pay model.
To comply with MACRA, clinicians have two tracks to choose from: MIPS, which requires clinicians to report and meet quality goals, and advanced alternative payment models, which require clinicians to take on financial risk as part of efforts to improve care and lower costs. If goals are met under an APM they’re eligible for bonuses.
Clinicians in Medicare Advantage plans have urged the CMS to consider those plans as APMs since some are offering risk-based contracts.
The White House’s Office of Management and Budget must approve any experiment. It is now collecting comments on documentation that providers will need to fill out before participating in the demonstration. Comments on these forms are due Sept. 3.
In order to get credit as participating in an APM, doctors must receive a certain amount of Medicare fee-for-service revenue, but that threshold is too high for some providers who may primarily see Medicare Advantage patients. For doctors in Advantage plans to get credit, a demonstration must be launched, according to the CMS. Otherwise, physicians are still subject to MIPS.
The CMS hopes to launch the five-year demonstration this year. The CMS will ask providers about the payment arrangements they have with Medicare Advantage plans and about the number of patients covered in such arrangements. That information will determine whether the payment arrangements meet the risk standards to count as an APM.
The American Medical Association, America’s Essential Hospitals and the Medical Group Management Association urged the CMS to take this step in a joint letter sent last year.
“Leading-edge clinicians who take risk under APMs within these MA contracts will not get credit for their efforts,” the letter said. “Our proposal would encourage broader participation in risk arrangements by clinicians from the start, creating synergies that will reinforce their population-based strategies and translate into higher quality and more efficient care within Medicare.”
An AMA spokesman said it appreciates that HHS took its concerns into consideration and said the demonstration will especially benefit practices in communities where there is a disproportionately high number of Medicare Advantage patients.
Medicare Advantage enrollment is projected to grow by 9% to 20.4 million in 2018. The CMS estimated that more than one-third of all Medicare enrollees, or 34%, will be in a Medicare Advantage plan in 2018.
Microsoft this week announced expansion plans into healthcare with the formation of a new unit, Microsoft Healthcare. Jim Weinstein and Joshua Mandel will join the company as VP and Chief Architect of the team, respectively.
Microsoft Healthcare formalizes the company’s Healthcare NExT initiative, launched last year, to advance artificial intelligence and cloud-based healthcare tools.
The new team will integrate Healthcare NExT’s research focus “with an added focus of creating strategic partnerships, and driving the cross-company strategy for healthcare and life sciences,” Peter Lee, corporate vice president of Microsoft’s AI & Research division, wrote in a blog post.
Microsoft has been playing in the healthcare waters for some time now. Since wading into the wearables market in 2014, the company has teamed up with Twist BioScience on the capabilities of DNA digital data storage, partnered with UPMC to create innovative AI-enabled care delivery products and collaborated with Cigna to leverage Microsoft’s HoloLens technology for interactive game-based health screenings.
As healthcare’s digital transformation continues, many organizations are looking to the cloud to modernize their IT infrastructures, EHRs and data analytics capabilities to foster value-based care. Microsoft Healthcare stated it will draw on the company’s AI and the cloud expertise to create products that tackle those goals.
The new unit — which will be part of AI & Research — will get help from two industry pros in Weinstein and Mandel. Weinstein, who joins Microsoft as vice president of Microsoft Healthcare and head of innovation and health equity, was previously CEO and president of Dartmouth-Hitchcock healthcare system. He will work with Lee on Microsoft’s healthcare strategy.
Mandel, who last led Alphabet life sciences division Verily’s health IT ecosystems work, will serve as chief architect of Microsoft Healthcare. As such, he “will work closely with customers, partners and the open standards community to lay the groundwork for an open cloud architecture to unlock the value of healthcare for the entire health ecosystem,” Lee said.
“We are taking concrete steps with an initial ‘blueprint’ intended to standardize the process for the compliant, privacy-preserving movement of a patient’s personal health information to the cloud and the automated tracking of its exposure to machine learning and data science, for example to support external audit,” Lee wrote
After months of speculation about when Amazon would officially enter the drug distribution market, the online retail giant offered a definitive answer on Thursday, announcing the acquisition of the online pharmacy PillPack.
The full-service pharmacy offers presorted packaging and home delivery and provides Amazon with a nationwide distribution network. PillPack holds mail order pharmacy licenses in all 50 states.
The financial terms of the deal were not disclosed. The companies expect it to finalize the transaction in the second half of 2018.
“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” Jeff Wilke, Amazon CEO Worldwide Consumer, said in a statement. “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier. We’re excited to see what we can do together on behalf of customers over time.”
The acquisition is a shot at the traditional drug supply chain, and shares of Walgreens, CVS and Rite Aid tanked on Thursday morning. Walgreens Boots Alliance was down nearly 7% at the open, CVS dropped more than 9% and Rite Aid was down more than 11%. Shares of the pharmacy benefits manager Express Scripts dropped 3%.
“It is a declaration of intent from Amazon … but the pharmacy world is much more complex than just delivering certain pills or packages,” Walgreens Boots Alliance CEO Stefano Pessina said during a scheduled quarterly earnings call on Thursday morning, adding that the physical pharmacy remains “very, very important.”
But some experts believe the acquisition could go well beyond an online supply chain.
“There are many potential derivative implications and opportunities from this acquisition,” Ed Francis, senior director of the life sciences practice at West Monroe told FierceHealthcare. “One is in line with Amazon’s initial food delivery platform leading to the Whole Foods acquisition: This could be the harbinger of Amazon getting into the pharmacy storefront and rapid clinic business.”
Others highlighted the possibility of integrating the service with other technology, like Alexa or telemedicine.
“With Amazon + PillPack this eliminates the need to stand in line at the pharmacy which may help overcome past barriers, especially if that patient has issues with mobility or transportation,” said Forrester Analyst Arielle Trzcinski. “Amazon will know if the patient didn’t refill their prescription and could potentially reach out via Alexa to refill their prescription.”
PillPack co-founders Elliot Cohen and TJ Parker founded the company in 2013 after winning the MIT Hacking Medicine Hackathon. The company quickly gained notoriety, landing on Forbes’ list of 25 “Next Billion-Dollar Startups” last year. The company has raised more than $118 million in venture funding.
“This will disrupt the way consumers pick up their medications and has serious implications for brick and mortar retail pharmacies,” Trzcinski said.
Amazon’s acquisition comes months after a partnership with JPMorgan and Berkshire Hathaway aimed at lowering healthcare costs. Last week, the companies appointed renowned author and surgeon Atul Gawande, M.D., to lead that effort.
Many eyes are watching the likes of Amazon, Apple, Google, Microsoft and other tech stalwarts for some kind of signal about their healthcare intentions. While some moves are already out in the open, such as Apple Health Records and Amazon Web Services expressing interest in longitudinal health records and analytics, the companies also have patents that potentially foretell the future.
As of Jan. 23, Amazon-owned 7,096 U.S. patents, according to the United States Patent and Trademark Office.
In addition, Amazon Technologies, Inc., had filed and published 870 patent applications in the U.S. as of Jan. 23, and Amazon.com, Inc., had filed and published 16 patent applications.
Amazon has been granted patents for thousands of inventions spanning one-click buying, drones, virtual-reality mirrors and Alexa, the company’s AI–powered voice assistant.
Google, for instance, – with 186 patents – focused mostly on investments for DeepMind, its artificial intelligence technology, and also on Verily, its healthcare and disease research entity among its 186 patents, according to the new Kalorama report.
Apple filed 54 patents to turn its iPhone into a medical device that can monitor biometric data such as blood pressure and body fat levels and to develop algorithms to predict abnormal heart rates. Microsoft filed 73 patents based on expanding its AI capabilities and developing monitoring devices for chronic diseases.
Such innovations have encouraged biopharma, medtech and providers to partner with these tech giants to boost digital healthcare, Kalorama noted.
Although Amazon has not officially announced details, industry rumblings indicate that e-commerce and cloud giant has been working with a secret project team known as 1492 that is exploring platforms for EHR data, health apps and telemedicine. The 1492 team is also reportedly working on extracting data from EMRs to make it more useful to healthcare providers and adding to its existing Amazon products such as Amazon Echo and the Dash Wand to fold into the healthcare setting.
Microsoft, meanwhile, has a number of projects that are impacting – or will impact – the digital health arena including: Microsoft Genomics, Microsoft Azure Security and Compliance Blueprint. The tech giant is also expanding Microsoft’s Intelligent Network and plans to create an AI-focused network in cardiology.
Insurers are moving away from fee-for-service toward value-based care more quickly than previously predicted, Change Healthcare reported in a new survey of 120 payers.
The report posits that for the first time private payers, rather than government programs, have taken the lead in implementing value-based care models and strategies.
However, payers are finding they need a long time to implement programs. Only 21% say they can roll out a new episode of care program in three to six months. More than one-third said they need a year, 21% need 18 months and 13% require up to two years or more. Taking longer than a year to implement a payment program could cause problems in a fast-moving healthcare market.
The survey found value-based care initiatives have made “significant headway” in achieving the triple aim of reducing costs and improving care quality and patient engagement.
Change Healthcare said nearly two-thirds of payments are now based on value, and that structure reduces unnecessary medical costs by 5.6% on average, according to survey respondents. The survey found that nearly 80% of payers reported improvements in care quality, 64% have seen provider relationship improvements and 73% said patient engagement improved.
Fee-for-service now accounts for 37.2% of reimbursement, according to survey respondents. Change Healthcare predicted that would further drop to 26% by 2021. The move to episode-of-care programs made two-thirds of payers invest in additional administrative staff.
However, there are still hurdles to a new payment model. The survey found 43% to 58% of payers said they’re struggling to engage providers in episode-of-care programs. It’s especially a problem to get providers to participate and agree on episode definitions, performance metrics, budgets and risk sharing.
Evolent Health CEO Frank Williams recently said that switching to value-based care presents challenges for providers, including taking on more risk.
“In the risk business, you can lose a lot of money quickly, so in larger risk arrangements or full health plans, you could lose $20-30 million a year. For an organization that’s been relatively stable, those are pretty daunting numbers and they’re scary for health systems’ boards and physician groups that don’t have a lot of capital,” Williams said.
Change Healthcare’s finding that private payers are moving faster than expected to value-based care contradicts a Healthcare Financial Management Association (HFMA) survey earlier this year. Value-based payment programs have doubled since 2015, but private payers have been slower than expected in launching those programs, HFMA said.
That report, sponsored by payer Humana, said nearly three-quarters of executives surveyed said their organizations achieved positive financial results from value-based programs.
Whether private payers are moving faster into value-based care as expected or not, the trend is just beginning. More value-based contracting is expected in the coming years and providers will increasingly feel pressure to move into risk-based contracts.