Outcome Health investors receive DOJ subpoenas as Chicago-area hospitals back away

Saturday, 11 November 2017, 03:33:03 AM. Two local hospital systems are pausing plans to expand their use of Outcome Health technology after allegations against the Chicago company.
The is subpoenaing investors in Chicago-based Outcome Health in the wake of a lawsuit accusing the prominent health information and advertising startup of committing fraud to secure nearly $500 million in funding. The orders from federal investigators, revealed in court documents filed by investors Thursday, come as hospitals and health care advertisers back away from the fast-growing company, which places interactive screens and tablets in doctors’ offices. The court filing indicates investors also anticipate inquiries from the . The investors — including units of Goldman Sachs and Google and a fund co-founded by gubernatorial candidate — sued Outcome Health, CEO Rishi Shah and President Shradha Agarwal on Tuesday in New York. The lawsuit followed a Wall Street Journal report last month that said some Outcome Health employees charged pharmaceutical companies for ads on more video screens than the company had installed. Outcome Health has denied the lawsuit's allegations and has hired former U.S. Attorney Dan Webb to review issues raised in the Journal’s story. “The company is committed to fully cooperating with any government investigation,” Outcome Health attorney Sanford Michelman said in a statement. The Justice Department and the SEC did not respond Thursday to requests for comment. Earlier Thursday, representatives of Downers Grove-based Advocate Health Care and west suburban hospital system Edward-Elmhurst Health said they are pausing plans to expand their use of...Read more
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