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Medfusion sues Allscripts, alleges fraud

Medfusion sues Allscripts, alleges fraud

By Modern Healthcare
Posted: May 16, 2014 - 2:30 pm ET

Medfusion, a developer of patient portals for physician offices, has escalated its feud with Allscripts with a lawsuit against the company alleging breach of contract, fraud and unfair competition.

In April, Medfusion terminated its nearly 5-year-old relationship with the Chicago-based information technology company. The agreement called for Allscripts to incorporate Medfusion's portal into its electronic health-record systems and market the portal to its customers.

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In a lawsuit filed May 15 (PDF) in Wake County Superior Court in Raleigh (Medfusion is based in Cary, N.C.), Medfusion alleges that Allscripts negotiated the acquisition of a competing portal company—Jardogs, maker of FollowMyHealth—at the same time it remained obligated to market Medfusion's technology.

Allscripts unveiled the Jardogs deal at the 2013 trade show of the Health Information and Management Systems Society, where Medfusion representatives had been planning to market their portal with Allscripts.

With 18 months still left on their contract with Medfusion, Allscripts turned its attention to promoting FollowMyHealth, including to customers who were using Medfusion's portal (or waiting for it—Medfusion says Allscripts created a backlog that cost the company $10 million in lost revenue).

Medfusion also alleges that Allscripts changed its interpretation of the revenue-sharing arrangement after an amended agreement was entered in 2011. By April 2014, when Medfusion terminated the relationship, Allscripts had failed by about $5.5 million of what Medfusion billed, the lawsuit says.

An Allscripts spokeswoman said the company does not comment on pending litigation.

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