Epic v. Health Gorilla: With Friends Like These

Two motions to dismiss and one very pointed motion to sever

When it rains, it pours. We cannot escape the courts this week, as we saw not one, but two Motions to Dismiss (and a Motion to Sever) filed in the Epic v. Health Gorilla case.

Motions to Dismiss

The reason for two separate motions is that Ravilla Med and LlamaLab, two of the defendants accused of actually making the fraudulent patient record requests, filed separately from Health Gorilla, which is accused of being the gatekeeper that let them onto the networks in the first place.

The motions have similarities and differences. They are united by a core argument:

1. That Epic failed to exhaust mandatory contractual dispute resolution before filing suit

2. That the only exception available to that process (seeking “immediate injunctive relief” for irreparable harm) isn’t applicable here

The defendants are referencing this section of Carequality Connected Agreement, which details the only defined exception to its Dispute Resolution Process:

20.2.1 Notwithstanding Section 20.1, Applicant may be relieved of its obligation to participate in the Dispute Resolution Process if Applicant (i) believes that another Implementer’s or Carequality Connection’s act or omission will cause irreparable harm to Applicant or another organization or individual (e.g. Implementer, Carequality Connection, End User or consumer) and (ii) pursues immediate injunctive relief against such Implementer or Carequality Connection in a court of competent jurisdiction. Applicant must inform Carequality of such action within two business days of filing for the injunctive relief and of the result of the action within 24 hours of learning of same. Notwithstanding any provision of this Agreement to the contrary, if Applicant is a U.S. federal agency, federal law shall govern whether and when equitable relief may be granted

That immediate injunctive relief corresponds, in the defendant’s words, to motions for temporary restraining order and preliminary injunction. As a reminder, early pleadings and pre-answer motions look like this:

Health Gorilla and RavillaMed defendants both argue that Epic didn’t veer to the right at that first stop in the road, so the use of the courts is not appropriate. It’s a procedural argument,t but an extremely potent one.

Where the two motions diverge is in scope. The RavillaMed defendants keep it narrow and only put that one shot on goal toward a dismissal. The rest of its motion, quite frankly, reads a little hot and defensive. There’s quite a bit of evocative language about the plaintiffs’ feeling threatened by RavillaMed as a competitive threat:

Although Epic claims that it is “deeply committed to ensuring patients’ health information can follow them wherever they receive treatment,” this commitment plainly does not extend to smaller providers whom Epic considers a competitive threat.

…

Although Plaintiffs do not understand, do not like, and do not want to compete with the RavillaMed Defendants’ businesses, that does not allow Plaintiffs to fabricate and broadcast baseless allegations.

Look, that all may be true, but I (and probably most of us) would personally benefit from understanding exactly what these companies do and how they compete with Epic and big health systems like Reid, Trinity, UMass Memorial, and OCHIN.

Health Gorilla, represented by the inescapable Quinn Emanuel, goes much further in their motion. It’s a well-done belt-and-suspenders approach - if the procedural argument doesn’t land, there are four much more substantive ones waiting behind it, each built on extremely close readings of the Carequality and TEFCA agreements:

• Epic and the plaintiff hospitals have no enforceable contract rights against Health Gorilla

• The fraud claims aren’t pled with enough specificity, as there’s no identifiable false statement by Health Gorilla

• The aiding-and-abetting claims fail because the complaint alleges at most that Health Gorilla should have known about the fraud, not that it actually knew

• Epic’s claimed damages are voluntary investigation costs, not real injuries

But I don’t know that they need a ton of deep analysis right now. The procedural argument alone is a road that leads to “dismissed without prejudice” and kicked back to the networks’ dispute processes, if not addressed. It’s not clear how they’ll proceed! The only responses I can think of for Epic are that the dispute process was never meant to adjudicate fraud or that filing the lawsuit itself somehow satisfies the “immediate injunctive relief” exception. Both feel a bit of a stretch - some Cravathian magic might be needed here.

Motion to Sever

The motion to sever by the RavillaMed defendants surprisingly might deserve more attention, if for no other reason than watching the RavillaMed defendants absolutely throw another under the bus: