Cerner Sued Over Failed Hospital Installation

We seldom hear about these things (probably because of the EHR Gag Clauses that John wrote about previously), but this time word has gotten out. According to a report in The Kansas City Star, a critical access hospital northwest of Pittburg, Kan. has sued Cerner Corp. over an allegedly botched EMR installation.

In its suit, Girard Medical Center has made some ugly accusations against the HIT giant, including allegations that Cerner promised features that the system it bought didn’t have. (Oops.)

The suit also says that Cerner had demonstrated “disparaging attitudes” about the hospital. Hey, given the size projects it usually takes on, maybe Cerner didn’t feel the $2.9  million project was worth its time, and wasn’t so diplomatic about it.

What does seem to be established fact is that after a year of work, and $1.29 million in payments from Girard, Cerner backed out of the project last September.

Girard, for its part, demanded that Cerner repay the $1.9 million. Getting no satisfaction, it filed suit, accusing Cerner of a host of no-nos such as breach of contract, negligent misrepresentation and fraud. Since that point, the suit has been kicked into arbitration, moved there by a provision of the contract Cerner managed to enforce.

Obviously, we are unlikely to ever know exactly what happened here, but I have a few theories:

–  As the story notes, Girard was desperate for Meaningful Use payments, but Cerner didn’t meet the initial deadline as the two sides had apparently agreed.  Did Cerner understand how important meeting such a deadline would be for a small hospital which depended on the incentive to finance the EMR?

– Maybe Cerner assigned junior people to this “little” project and they didn’t have what it took to get through the task.

–  Perhaps this is an EMR install failure like many others, but one ending in a lawsuit since the tiny hospital couldn’t afford to lose its investment.

What are your thoughts, readers?

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

1 Comment

  • I was hoping to find some comments already! 🙂

    I’d love to know a few things;
    1. what was missing? (see below for hints) Was it contracted for – both in initial cost and annual support?
    2. has any analysis been done or reports provided as to the actual status of the system, and what was delayed before Cerner ‘departed’?
    3. Do we know anything about how the project was run – department by department analysis work flow and needs, implementation plan?
    4 Internal servers or cloud/asp/saas?
    5. Communication and status updates, and level of staff cooperation during implementation?
    6. Were all payments made before system completion, or are payments made after completion of a phase of work? What’s normal for this? I have read that the contract was for $2.9 million, and that 1.9 – or 1.2, had been paid. That at a certain point the hospital ‘halted payment’ to ‘get Cerner’s’ attention’.

    Just a few items, most of which I’m guessing we have no detail on. But I’m sure many of us could learn from whatever we can find out.

    What we do sort of know;
    1. 25 or 35 bed hospital but apparently ‘full service’, maybe mostly elderly or uninsured patients
    2. Other related hospitals and clinics (part of lawsuit?)
    3. Supposedly both EHR and hospital admin included. Presumably this included billing.
    4. Supposedly hospital told that attendance, electronic billing, lab test functions would increase cost annually by $100k.

    Other articles on this;
    http://www.corepointhealth.com/geni/lessons-learned-one-hospital%E2%80%99s-vendor-struggles
    http://mobile.blogs.wsj.com/cio/2012/06/26/kansas-hospitals-failed-emr-project-shows-peril-of-vendor-relations-gone-bad/

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