A software startup has sued Epic on antitrust grounds, arguing that the electronic health records giant has orchestrated a scheme to destroy the startup’s business and maintain its monopoly over healthcare data.
Particle Health, based in New York, competes directly with Epic by helping health insurers and providers easily retrieve patient medical records so they can analyze them. It’s backed by $39 million from venture firms such as Menlo Ventures and Canvas Ventures.
The startup filed a complaint Monday in the US District Court for the Southern District of New York alleging that since 2023, Epic has attempted to thwart competition from Particle by cutting off its customers’ access to online medical records. Particle also alleged that Epic smeared its reputation and made it difficult to sign on new customers.
The lawsuit takes aim at Epic’s control over electronic health records, and in particular, its dominant position in the market to help health insurers access those records. According to Epic’s website, more than 325 million patients have a record with the company. The complaint alleges that Epic’s dominance leads to inefficiencies, delayed treatments for patients and higher costs for insurers.
“If left unfettered, Epic’s conduct will snuff out meaningful competition in the still-fledgling payer platform market, relegating yet another market to Epic’s monopoly control,” the complaint reads. “That outcome would not only harm the customers of payer platforms (health plans), but also the patients, doctors, and hospitals affected by prices and plans that payer platforms establish for their health care reimbursements.”
Particle claimed that Epic’s attempts to maintain its control threaten to put the startup out of business.
“Particle’s market share and revenue had been growing exponentially prior to Epic’s exclusionary campaign. Just a few months after Epic began its conduct, however, Particle’s revenue growth dropped so sharply and so dramatically that it was barely able to meet one third of its previous projections, which up to that point it had regularly exceeded,” the complaint reads.
The dispute between Particle and Epic first became public in April, when Epic said Particle shared patient data with companies that were using it in inappropriate ways that potentially violated privacy laws. Particle at the time said its customers commit to rigorous onboarding procedures and adhere to all standards on the data-sharing network Carequality. It said it would investigate the issue.
Epic said in a statement to Endpoints News that “Particle’s claims are baseless” and meant to divert attention from its “unlawful actions.”
“Epic’s software is open and interoperable, allowing healthcare organizations to easily share data under HIPAA and all relevant regulations. Epic will continue to protect patient privacy and vigorously defend itself against Particle’s meritless claims,” the company said.
Inside the complaint
In the complaint, Particle claims that Epic in 2021 started offering a service that allowed health insurers to obtain large numbers of medical records and analyze them for a better picture of members’ health and risk.
Particle, which had been providing a similar service for traditional healthcare providers and health tech companies since it was founded in 2018, began competing for insurers’ business in 2023. It has worked with major insurers like Blue Cross Blue Shield of Michigan and Blue Shield of California, as well as upstarts like Clover Health, according to the complaint.
Particle relied on being able to retrieve records housed in Epic’s system, under federal regulations that required the EHR company make its records available for treatment purposes, the complaint says.
But, Particle alleged that beginning in 2023, Epic tried to thwart the startup’s business through a series of actions, starting with raising “baseless complaints with Particle to intimidate it into exiting the market.”
Then, in March 2024, the EHR giant began denying Particle customers’ access to medical records and told those customers they could regain access if they stopped using Particle’s platform, according to the complaint. Particle alleged that it lost existing and potential customers.
Particle said in the complaint that Epic also made it difficult for the company to onboard new customers by requiring each new Particle customer to be manually approved under a process that can take more than a month. Previously, onboarding customers took a maximum of two days, according to the complaint.
Particle further alleged that starting in April, Epic falsely claimed it had introduced “security and privacy risks” and disclosed protected health information inappropriately. Epic told its own healthcare customers to request more information about these risks from Particle, and the resulting inquiries overwhelmed the startup’s operations, the complaint says.
Finally, the complaint alleged that Epic further drained Particle’s resources by bringing a formal complaint against it within the Carequality network and refusing Particle’s efforts to negotiate.
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