Wisconsin-based Agnesian Healthcare has sued Cerner for fraud and breach of warranty. The healthcare organization has claimed issues in its billing software that caused it a loss of over $16 million.
The hospital stated that the said issues have also damaged its reputation and has claimed $200,000 a month in damages.
Agnesian Healthcare started using Cerner’s revenue cycle software in 2015. The hospital paid $300,000 for the Health IT solution. In the suit, Agnesian revealed that problems began almost immediately after the installation which caused in several “pervasive errors” in the billing statements to patients.
The hospital said that it was forced to send payment statements by hand as a compensation and this resulted in a substantial backlog of unprocessed statements.
It was said that Cerner announced fixing the issues in 2016, but in 2017, Agnesian started finding major additional coding errors. These errors resulted in large numbers of undetected write-offs of claims that were made to insurance companies and similar other payers.
The law suit quotes, “As Agnesian later learned, Cerner’s Integrated Solution was automatically writing off reimbursable charges for services without any notice to Agnesian. Due to the severity of coding issues, Cerner admitted to Agnesian that the Integrated Solution needs to be rebuilt.”
Agnesian Healthcare further claimed that the Cerner IT personnel who were to rebuild the software tool actually left the company.
“Even if Cerner is able to successfully rebuild the Integrated Solution, it will take many months thereafter to return to normalcy in billing collections,” the suit read. “In the interim, late charges will be required to be written-off.”
Consequently this may even cause Agnesian to fail in meeting federally mandated billing requirements.
Agnesian Healthcare is now seeking direct and indirect damages. This also includes punitive damages. The hospital further seeks the cancellation of its contract with Cerner contract. Per reports, the lawsuit was transferred to the U.S. District Court of the Eastern District of Wisconsin.
In response to this, Cerner said in an emailed statement, “Cerner disagrees with the allegations and will aggressively defend the case.”
The Healthcare software vendor filed a motion aimed at either dismissing the case or transferring it to the U.S. District Court for the Western District of Missouri, on Sept. 21. In the mentioned motion, Cerner stated an improper venue stemming from an arbitration clause in its Agnesian contract.
Interestingly, this is not the first time for Cerner to be sued. A Kansas hospital also sued Cerner over its EHR installation and a North Dakota practice also reported Cerner’s patient-accounting software to have malfunctioned.
