Pinnacle Health System, Harrisburg, Pa., late last month filed suit against NeoDyme Technologies Corp., alleging that the College Station, Texas-based capital equipment maintenance firm failed to live up to its contractual promises.
The lawsuit, filed in U.S. District Court in Harrisburg, is at least the fifth against the firm since February (Aug. 20, p. 14). In general, the lawsuits accuse NeoDyme of neglecting to pay vendors for maintenance, jeopardizing hospitals' relationships with vendors and forcing hospitals to pay again.
"NeoDyme has been and will continue to be in direct discussions with Pinnacle to resolve the areas of disagreement that have arisen between us," Eugene "Sonny" Lyles Jr., NeoDyme's senior vice president and general counsel, said in a written statement. "We would anticipate a fair and friendly resolution" of the dispute with Pinnacle. The company previously denied the allegations in the other lawsuits.
In its 17-page lawsuit, the four-hospital Pinnacle system sued NeoDyme to recover more than $726,000 it claims the company "repeatedly failed and refused to pay" Pinnacle's equipment vendors. The not-for-profit Pinnacle is anchored by its flagship Polyclinic Hospital in Harrisburg.
NeoDyme essentially acts as a middleman between hospitals and equipment vendors. Hospitals pay NeoDyme to assume responsibility for the management and maintenance of capital equipment, which can include everything from diagnostic imaging machines to computers and telephones.
NeoDyme, in turn, acts on behalf of the hospital to negotiate new maintenance contracts with vendors and to ensure that the vendors are paid for their services.
Pinnacle terminated its agreement with NeoDyme in April after contracting with the company for nearly three years, according to the lawsuit. That agreement was valued at $16.1 million over a five-year term. NeoDyme's failure to pay vendors as the company was contracted to do "has resulted in a loss of the good name and credit standing of Pinnacle Health and has deprived Pinnacle Health of the use of its equipment to treat ill and injured hospital patients," the suit says.
The lawsuit also charges NeoDyme with negligent misrepresentation, arguing that the company falsely promised to shave more than $1.8 million off Pinnacle's annual $4.7 million capital equipment maintenance budget. The suit does not specify how much or how little Pinnacle actually saved.