A US hospital system is suing Cerner for fraud and breach of warranty, claiming problems with the implementation of its billing software caused losses of over $16 million.
Agnesian Healthcare went live with Cerner’s revenue cycle software in 2015 and paid $300,000 for the platform. In the suit, Agnesian said problems with the software began almost immediately after the installation that resulted in “pervasive errors” in billing statements to patients.
It was forced to send out payment statements by hand, according to the suit, which resulted in a massive backlog of unprocessed statements — some of which were eventually written off.
The suit claims Cerner said it fixed the issues in 2016. However in 2017, Agnesian found “major additional coding errors, which had resulted in large numbers of undetected write-offs of claims made to insurance companies and other payers.”
“As Agnesian later learned, Cerner’s Integrated Solution was automatically writing off reimbursable charges for services without any notice to Agnesian,” the lawsuit claims.
“Due to the severity of coding issues, Cerner admitted to Agnesian that the Integrated Solution needs to be rebuilt.”
According to Agnesian, which said the problems have also damaged its reputation, the Cerner personnel who were supposed to rebuild the tool 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 reads.
“In the interim, late charges will be required to be written-off.”
As a result, Agnesian may also fail to meet federally mandated billing requirements.
The hospital system is seeking direct and indirect damages, as well as punitive damages. Agnesian also seeks cancellation of the Cerner contract.
In an emailed statement, Cerner denied the claims and said it will fight the suit.
“Cerner disagrees with the allegations and will aggressively defend the case,” the company said.
Cerner filed a motion to dismiss the case on September 21 or to transfer the case to the US District Court for the Western District of Missouri.
This is not the first time Cerner has been sued. A Kansas hospital sued Cerner over its EHR install and a North Dakota health system alleged Cerner’s patient-accounting software malfunctioned.
The Cerner EHR rollout at three healthcare facilities in Canada is currently under investigation by British Columbia Health Minister Adrian Dix.
Cerner was recently awarded the coveted US Department of Veterans Affairs EHR replacement without a competitive bidding process. As a result, the department was sued by EHR hardware, software and support solution provider CliniComp.