A Texas pediatrician says he plans to open a second office with the money he won in an arbitration case against a marketer of electronic health record systems.
With attorney's fees, double damages and a potential for treble damages, the arbitrator's award is valued at nearly $609,000.
Dr. Rhaman Uddin's beef with Etransmedia Technology of Troy, N.Y., is an example of the difficulties small medical practices face when purchasing health information technology products in a shrinking EHR market.
Arbitrator Richard De Witt, in his 19-page final award in the Uddin case, describes how Uddin's problems were linked to events that began when a pair of developers discontinued their EHR products in the highly competitive health IT market.
Uddin's stereotypical small practice, Pediatric Clinic of La Porte, is located in that Houston suburb. His wife is the practice manager and he works with one physician assistant and one nurse practitioner. Between them, they see about 60 to 70 patients a day, about 85% of whom are covered by Medicaid.
No technophobe, Uddin, in the first two years of the federal EHR incentive payment program, 2011 and 2012, succeeded twice in meeting the meaningful-user criteria using an EHR and practice management system from Abraxas Medical Solutions. Chicago-based Merge Healthcare had purchased the parent company of Abraxas in 2011. Then in 2013, Merge announced it would no longer support the Abraxas software.
With $34,000 in incentive payments still attainable, Uddin went shopping for a new IT system, picking the Allscripts Professional package of EHR and PM systems offered by Etransmedia, a so-called value-added reseller of health IT products, or VAR.
Many smaller and even some larger EHR developers like Allscripts, NextGen, McKesson and GE Healthcare outsource to VARs local and regional sales and support services, according to Vinson Hudson, principal of health IT consultancy Jewson Enterprises, Youngstown, Ohio.
“It gives them a way to reach the entire population of U.S. physician practices without having sales forces (in those geographical territories), which is expensive,” Hudson said. At the time Uddin was negotiating with Etransmedia, however, he didn't know what a value-added reseller was, nor did he fully understand the pitfalls he might encounter when relations between resellers and their EHR developers go sour, as they did in 2012 between Etransmedia and Allscripts.
That's when Allscripts announced it would stop selling its MyWay brand of EHRs for small physician office practices.
Allscripts had acquired MyWay in a 2008 merger with Misys Health Solutions. But dropping MyWay left Etransmedia holding the bag on 684 pre-paid software licenses for the EHRs it had purchased from Allscripts. In August 2013, Etransmedia and Allscripts took their dispute to arbitration with allegations of fraud, deceptive practices and breach of contract.
The Etransmedia/Allscripts clash wound up in court, with a judge in 2014 affirming an arbitrator's $9.7 million award in favor of Etransmedia.
But in its sales efforts with Uddin, Etransmedia didn't tell Uddin of its “contentious relationship” with Allscripts that would “seriously impact the delivery and implementation of the systems sold by Etransmedia” to Uddin, the arbitrator said.
“All I knew was they (Etransmedia) were selling the Allscripts products and the previous company recommended they would be able to transfer my data,” from the Abraxas to the Allscripts systems, a must-have, Uddin said.
He also was looking for an EHR that could connect electronically with a major reference lab, Quest Diagnostics, and could electronically connect with the Texas Health Department's immunization registry.
In November 2013, Uddin signed a contract with Etransmedia to buy the Allscripts Pro package. He also paid $8,540 directly to Allscripts to license its patient portal. And Uddin entered into a $69,107-contract with a finance company to pay for the EHR and PM systems.
In June 2014, Uddin's practice went live with the EHR and PM systems hosted by Etransmedia, “but many of the critical features” the physician thought he was buying weren't functioning, including the interfaces with the state immunization registry, labs and Payerpath, the arbitrator found.
Also, the system was incapable of meeting the 2014 meaningful-use criteria.
“After the first six months, I realized I was not getting the services I requested and required,” Uddin said. “The (connection to) immunization records, which are very important for pediatrics, was never put in place. I was going back and forth between Allscripts and Etransmedia and my staff was going back and forth. It was a big struggle from the very beginning.”
Uddin said he tried to call the bosses of both companies, but got response. He went to arbitration in October 2015.
Early in 2016, Allscripts notified Uddin the interface with the state immunization system was connected and his meaningful use software upgrade had been made, but the lab interface remains a work in progress.
On Oct. 26, De Witt, the arbitrator in Albany, N.Y., ruled in Uddin's favor on his complaints alleging “fraud in the inducement” of his contract with Etransmedia and that Etransmedia's conduct violated the Texas Deceptive Trade Practices Act. The arbitrator granted Uddin double damages of $365,836, plus $60,000 in legal fees and a stipulation that Etransmedia properly support Uddin's EHR needs for one year, including transferring his data to a new vendor at no charge, or pay another $182,918 in damages.
Spokespersons for Etransmedia and Allscripts declined to comment. Both companies are in arbitration and litigation in North Carolina.
Uddin's hassles with switching vendors are far from unique.
“I know there are so many more out there that are affected,” added Javairia Syed, a Dallas attorney who represented Uddin. “It's a lesson to practices to know what you're getting yourself into,” she said, noting that a typical HIT contract handed to a physician is “iron clad” in its protections for the developer, not the physician customer.
Uddin, a bit wiser, is shopping around for a second clinic location and his third EHR, only this time, he'll be seeking professional help.
“We doctors are not very good at looking at the fine print,” Uddin said. “You know we're busy. I would advise hiring an expert that will help you make sure you have a system that works and have a lawyer looking at the contract.”
“That was the first thing my lawyer told me” when his legal battle started, Uddin said. Now, he said, “I agree.”
