Allscripts Healthcare Solutions has sued the New York City Health and Hospitals Corp. in civil court over its allegation that the 14-hospital public system improperly awarded a $302.8 million electronic medical-record system contract to Epic Systems Corp., which also is named as a defendant. The New York system disputes the assertions in the suit.

In the suit (PDF), filed in New York County court, Chicago-based Allscripts alleges that the system's selection of Epic as the EMR provider was "arbitrary, capricious, an abuse of discretion and lacks a rational basis," arguing that calculated properly, Allscripts' proposal would save $535 million when compared with Epic's. In an e-mailed statement, Allscripts added: "Our goal remains the same: We want transparency in the process. We want the bid process reopened so that the competing proposals can be reviewed fairly, consistently and side-by-side to ensure that the taxpayers of NYC obtain the best-value electronic health-record solution."

In response to the suit, New York City Health and Hospitals released its own statement. "Allscripts' claim that it underbid Epic by more than half a billion dollars is absurd and strikes us as an ill-fated attempt to reassure investors and inflate its sagging stock price," wrote the health system. "Unfortunately, as our multiyear review has revealed, Allscripts lacks a truly integrated EMR solution and has repeatedly lost business to Epic and other vendors as a result. HHC will defend its well-supported decision and prevail in this lawsuit."

A spokeswoman for Verona, Wis.-based Epic declined comment, as did a spokeswoman for Cerner Corp., Kansas City, Mo.; court documents say Cerner was the third finalist for the account.