Illinois upholds Epic's $62 million university contract

Epic System Corp.'s $62 million contract with the University of Illinois Hospital and Health Sciences System for software at UI Health will stand, the Illinois Procurement Policy Board determined Tuesday.

The university health system's move to an Epic electronic health record will put it on the same EHR software as the other two major academic medical centers in the city, Rush University Medical Center and Northwestern Medicine.

"This is a good thing for the patients of Chicago," said Stephen Tokarz, chief of staff at consultancy HCI Group and a former Epic employee.

Epic scored the seven-year contract in September, but the road has been rocky from the beginning. Cerner challenged the award, saying the bidding process was unfair and that there was a conflict of interest. They alleged that Impact Advisors, a firm that has worked with Epic on software implementation, helped craft the proposal request and selections criteria.

Cerner leaders also said that their bid of $60.5 million included all implementation costs and was therefore substantially lower than Epic's.

In April, the Illinois Procurement Policy Board recommended canceling the contract and sending the matter to the Illinois Executive Ethics Commission. But the board later realized it had to let Epic request a hearing first.

Before the hearing, Epic CEO Judy Faulkner wrote in a letter to the Illinois Procurement Policy Board that Cerner's claims weren't true—that there was no conflict of interest and that Epic's estimated cost included implementation. She also contended that the total cost would be $151 million for an Epic EHR compared to $154 million for a Cerner system.

On Tuesday, after representatives from both Epic and Cerner spoke before the policy board, the board didn't find any violations and did not void the contract, according to board Executive Director Matt von Behren.

Though Epic leads in U.S. acute-care market share, with just over a quarter of the market, Cerner leads worldwide with 17% compared to Epic's 9%.

Neither Epic nor Cerner representatives were immediately available to comment.