Medfusion files suit against Allscripts

Seeks $4.5M in payment defaults, more in damages
By Mike Miliard
10:16 AM

Barely three weeks after ceasing its working partnership with Allscripts, patient portal developer Medfusion is now suing the EHR giant for breach of contract.

[See also: Medfusion severs ties with Allscripts]

Cary, N.C.-based Medfusion first teamed up with Allscripts five years ago to integrate its portal technology with the latter's EHRs. But it terminated its contract on April 24, after a string of payment disputes stemming from backlogged implementations.

"Allscripts had ample notice and opportunity before termination to resolve its payment defaults but chose not to," wrote Medfusion President Vern Davenport in a letter to its 30,000 Allscripts customers.

[See also: Medfusion acquires Medem, signs partnership with Allscripts]

"Allscripts no longer has the right to bill you for our portal and/or website services," he added. "We are not billing them, so we don’t understand how they can be billing you."

Another contentious issue was Allscripts' acquisition, first announced at HIMSS13 in New Orleans, of Jardogs, another patient portal company.

"By solidifying our open connectivity strategy and strengthening our patient engagement offerings, we will accelerate information sharing and population health management, enabling better care," said Paul M. Black, president and CEO of Allscripts, at the time.

This came as a surprise to Medfusion, the suit alleges, which was at the trade show prepared to jointly market its products with Allscripts, only to see a competitor's wares touted.

The Jardogs acquisition came while there was still a year and a half to go on Medfusion's contract with Allscripts, which was set to expire this July, according to the lawsuit.

"We were contracted as their only preferred portal vendor to be included by default in every sale," Medfusion CEO Steve Malik told the Raleigh News & Observer. "Virtually every customer should have been ours. Instead, they were marketing a competing product."

Medfusion at first sought $5.5 million worth of outstanding invoices, according to the suit. Allscripts has paid a bit less than $1 million since then, but disputes the rest.

In addition, Malik tells the Triangle Business Journal that the firm will "absolutely" seeking damages in the suit; Allscripts spokesperson Concetta Di Franco told the paper that the vendor doesn't comment on outstanding litigation.

It didn't have to be this way, Malik told Healthcare IT News' Erin McCann back in April.

"We tried to resolve some differences with (Allscripts) for quite some time and weren't able to do that," he said.