Hospital takes EHR heavyweight to court

Cites breach of software agreement as cause
By Erin McCann
10:53 AM
Hospital takes EHR heavyweight to court
A rural Montana hospital has filed suit against big name electronic health record system provider NextGen Healthcare, alleging the company violated its contract by both failing to install an EHR system by the set deadline and not providing a system that meets 2014 federal meaningful use criteria.
 
In September 2012, the six-bed Mountainview Medical Center in White Sulphur Springs, Mont., entered into a software agreement with NextGen which stipulated the EHR provider would install a system no later than June 1, 2013, a system which allowed the hospital to meet meaningful use requirements. However, NextGen failed to meet the go-live deadline and subsequently requested a four-month extension to October 2013, the complaint alleges.  
 
 
Moreover, the critical access hospital, after spending more than $441,000 to install the EHR, discovered the EHR system did not meet 2014 MU standards, which took effect Oct. 1, 2013. 
 
"NextGen's representations were false and misleading at the time such representations were made," Mountainview Medical Center officials claimed. The pending litigation seeks to rectify damages suffered by the hospital, including loss of revenue and loss of federal reimbursement payments. 
 
Michelle Rovner, spokeswoman for NextGen, said the company would not comment on pending litigation but added that the hospital's allegations are "without merit," and the company would "defend against them vigorously." 
 
"MVMC’s damages, if any, in whole or in part, are the result of its own breaches of contract, negligence, or fault not attributable to NextGen Healthcare," wrote Margaret C. Weamer, counsel for NextGen in a Jan. 8 response to the hospital's complaint. 
 
David McLean of Browning, Kaleczyc, Berry & Hoven, the firm representing Mountainview Medical Center, however, called NextGen's comments "puzzling," seeing as the complaint "clearly identifies NextGen's deficient performance in this matter." 
 
This is not the first time an EHR provider has been taken to court over breach of contract. 
 
[See also: Go-live gone wrong.]
 
In February 2012, the Kansas-based Girard Medical Center sued EHR behemoth Cerner Corporation alleging the company failed to meet certain parts of the agreement, "continually provided inaccurate price quotes," and also failed to install a system in a timely manner that met meaningful use requirements. 
 
Hospital officials also cited Cerner employees' lack of "experience and basic maturity."
 
"Hospital provided notice to Cerner that on several occasions that it was in breach of the agreement and was not fulfilling its promises, and that hospital had recognized that Cerner had inaccurately represented the system and the implementation of the system to induce hospital to enter into the agreement," the lawsuit read. 
 
Moreover, after expending $1.29 million on the EHR system that had not yet been fully installed, "Cerner representatives notified Hospital's mid-level management of their desire to discontinue its services and abandon the project to implement the system," according to the lawsuit.
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