The State of Indiana is moving to drop a lawsuit filed against more than 60 hospitals in the state that alleged they falsified records regarding release of electronic medical records and defrauded taxpayers of more than $300 million. 

This latest development comes a week after CIOX Health launched its own suit against the U.S. Department of Health and Human Services claiming that the HHS enforcement of HIPAA is absurd and irrational. 

[Also: CIOX Health sues HHS over 'absurd' and 'irrational' HIPAA enforcement]

The two lawyers who originally filed the suit against CIOX Health aren’t fighting Indiana’ new move, as of now. Michael Misch and Bradley Colborn brought the suit in 2016 after they experienced trouble obtaining medical records from local hospitals. 

Misch and Colborn tracked instances with several hospitals where they received electronic records starting in 2013, logging how many times they got the records within the prescribed three-business-day period and compared their findings to the hospitals' public reporting. The lawyers found discrepancies between their experiences and the hospitals’ reporting. 

[Also: UPDATED: 62 Indiana hospitals named in $300 million fraud suit over EHR kickbacks]

Hospitals tracked by the lawyers contracted the handling of their medical records requests to Georgia-based CIOX Health. The company has been named in the suit as having violated the federal Anti-Kickback Statute and state law for allegedly overbilling patients for their own medical records.

According to court documents, the state has determined that further prosecution of the case is not in the public interest because of the resources it would require, both monetary and personnel, and filed a motion to dismiss.

“The State anticipates that it will impose substantial burdens on both the State and the United States in the form of monitoring and participation in the proceedings as well as complying with anticipated discovery obligations. The State believes Relators’ claims have little, if any merit; therefore, it believes Medicaid will not recover anything in this matter,” the legal motion read.

Indiana Public Media quoted a response from Misch and Colborn regarding the state’s filing. “While the [Plaintiffs] do not agree with the State of Indiana’s legal analysis of the claims raised in this matter, the [Plaintiffs] and the State, however, agree that the State is entitled to substantial deference in deciding what claims are prosecuted on its behalf,” they wrote in the response. “As a result, Plaintiffs have decided not to oppose the State’s motion.”

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com