• Montana hospital sues EHR vendor for contract breach

    Author | Date December 31, 2013
    Mountainview Medical Center (MVMC), a tiny 6-bed critical access hospital in White Sulphur Springs, Montana, is suing popular EHR vendor NextGen Healthcare Information Systems for breach of contract.  According to the Helena Independent Record, MVMC claims that NextGen failed to install nearly half a million dollars’ worth of EHR equipment after missing two implementation deadlines.
    In late 2012, MVMC decided to begin participation in the EHR Incentive Programs by choosing a NextGen EHR system.  Anticipating a project cost of more than $800,000, the hospital’s board noted that “it seems ridiculous for a facility this small, but…[we] won’t be reimbursed if we wait. In 2014, they will take 10% of our Medicare money. We can choose not to do it, but can’t keep the doors open.”  For the financial outlay, the hospital was expecting to receive “servers, hardware, and software.  Providers will have tablets or laptops and automated dictation.”
    However, the hospital alleges that NextGen did not supply the agreed upon equipment.  After contracting with the vendor on September 28, 2012, MVMC says that NextGen failed to install a certified EHR by the agreed upon deadline of June 1, 2013.  After extending the contract to October 1, 2013, MVMC claims that “at no time did NextGen appear, attempt to install and make operational a certified electronic health record system at MVMC.”
    While neither NextGen nor MVMC have commented on the pending lawsuit, the case is not the first time an EHR vendor has fallen short of a provider’s expectations.  Concerns over the financial impact of EHR installations have tanked credit ratings for more than a few hospitals, and as the health IT market consolidates, more and more vendors are closing up shop, sometimes suddenly.  Dr. Andrew Bronstein, an orthopedic surgeon at The Bronstein Hand Center in Las Vegas, NV, paid out $80,000 to an EHR vendor that took the money and ran without delivering on its contracts, while the discontinuation of Allscripts’ popular MyWay product left thousands of providers in the lurch.
    The lawsuit (case number 6:2013cv00079) was filed on December 18, 2013 in Montana District Court.  MVMC is represented by Daniel J. Auerbach and David Mathew McLean, while John H. Tarlow and Margaret C. Weamer are representing NextGen in the case.
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