Healthcare Business News

Montana hospital sues developer over electronic health-record certification

By Joseph Conn
Posted: January 7, 2014 - 3:45 pm ET

A small Montana hospital may be among the first of many providers to go to court to resolve their frustrations with electronic health record systems developers that are either lagging or failing to update their software to the new, more stringent testing and certification requirements of the federal EHR incentive payment program.

Mountainview Medical Center in White Sulphur Springs is suing NextGen Healthcare Information Systems in federal court for failing to provide a certified EHR system in a timely manner.

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“That's the most important thing in this whole deal, to be federally certified,” said Aaron Rogers, CEO of the 25-bed Mountainview. “This is a huge, huge deal for every hospital, and we're certainly in that group. Ultimately, the reason there is a lawsuit is because certification was not attained, plain and simple. It didn't meet the criteria that we have to have federally.”

The critical-access hospital argues in the lawsuit that it was promised “a certified electronic health record system as defined by federal law” when it licensed software from NextGen in 2012.

Under new federal requirements that went into effect Oct. 1 for hospitals (and on Jan. 1 for office-based physicians) providers are no longer eligible for EHR incentive payments if they are still using 2011 Edition-compliant software. Thus, even for hospitals and physicians seeking to meet Stage 1 meaningful use for the first time, they must use 2014 Edition software to qualify for incentive payment.

A Modern Healthcare review of the Certified Health IT Product List compiled by HHS' Office of the National Coordinator for Health Information Technology showed that in September just 79 companies, providers and other organizations had software tested and certified to 2014 Edition criteria. That's compared with nearly 1,000 IT vendors whose products were tested and certified to the 2011 Edition criteria initially suitable for Stage 1 of the program. The precipitous drop in the number of vendors with certified products suggests many providers could be left in the lurch after investing substantial sums of money on EHR systems they believed would allow them to meet the federal requirements.

Mountainview's agreement with NextGen, according to a complaint filed last month in U.S. District Court in Helena, said the EHR was to be installed no later than June 1, 2013, but when NextGen failed to meet that date, it asked for and was given an extension until Oct. 1, 2013.

In September, however, the hospital “learned that NextGen did not have an (EHR) that was certified pursuant to the 2014 (Edition) standards” required for use by hospitals after Oct. 1, 2013. The complaint is asking for economic and unspecified compensatory damages, attorney fees and other court costs.

The complaint said Mountainview has already spent “in excess of $441,000 to facilitate” the EHR installation. That includes license fees, hardware and other costs.

Rogers said the hospital has been using electronic lab and imaging systems since 2009, but does not have a complete EHR. It is seeking to meet Stage 1 meaningful use in the 2014 fiscal year.

NextGen's Inpatient Clinicals complete EHR for hospital inpatient use was certified by the Chicago-based Certification Commission for Health Information Technology as meeting the 2014 Edition criteria. But that certification didn't come until Nov. 25, according to a copy of the test results from the Office of the National Coordinator for Health Information Technology. NextGen spokeswoman Michelle Rovner said in an email that, “While we cannot comment on pending litigation, other than to say that we firmly believe the allegations made by Mountainview Medical Center regarding our inpatient application are without merit and we will defend against them vigorously, we confidently stand behind the quality and performance of our products and offerings.”

Rovner said the CCHIT certification means hospitals can use the software to meet both Stage 1 and Stage 2 meaningful use requirements.

According to the database created by the CMS and the ONC, 62 of NextGen's hospital customers have met meaningful-use criteria, giving the company a 1.3% share of the hospital inpatient complete EHR niche. NextGen ranks fourth in the database of 455 vendors of complete EHRs for use by physicians and other eligible professionals in ambulatory care with nearly 17,850 meaningful users.

Follow Joseph Conn on Twitter: @MHJConn

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