New York City's public healthcare network is trying to toss out the information systems vendor it picked a year ago to automate its Medicaid HMO, but the vendor is fighting through the courts to stay on.
US Servis, a Somerset, N.J.-based management services and healthcare billing company, was hired by New York City Health and Hospitals Corp. in early 1996 to automate the operations of MetroPlus Health Plan, which has about 42,000 Medicaid enrollees.
But in February, HHC told the vendor it wasn't satisfied with the performance of systems and services and would seek to terminate the contract if things didn't improve.
When HHC made good on its threat three months later, US Servis gained a temporary restraining order on May 30 preventing termination of the services agreement. A hearing on its motion for a preliminary injunction is set for July 2. US Servis also is seeking damages from MetroPlus and HHC for breach of the agreement.
According to HHC spokeswoman Jane Zimmerman, the vendor "is in material breach of the contract" and "had a track record of deficiencies in terms of their ability to fulfill the terms of the contract."
Graham King, chief executive officer of US Servis, said the lawsuit was filed after attempting in good faith to resolve MetroPlus' performance concerns but finding "we are, if anything, further from a resolution of this issue than we were in February."
The two-year contract, worth an estimated $5 million, is the vendor's largest account, King said.
The restraining order prevents MetroPlus from bringing in another vendor, but it's ready with a "backup plan" if it can oust US Servis, Zimmerman said.
HHC wouldn't comment further on the specifics of the disagreement, but MODERN HEALTHCARE has learned that it is dissatisfied with efforts to integrate financial and clinical records of enrollees as called for in the original request for proposals. Another issue reportedly involves efforts to provide an outpatient billing systems capacity.
A US Servis spokesman would say only that such claims are "outlandish and without merit."