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Hospital: Cerner's Software Caused $16 Million in Losses

Agnesian Healthcare claims coding errors in billing software from Cerner forced it to send out bills by hand.

Published: September 26, 2017

BOTCHED ROLLOUT A Wisconsin hospital has sued Cerner over problems with its billing and claims software.

A Wisconsin hospital claims its registration, scheduling, billing and claims software system was rife with problems from the day it was installed, resulting in "pervasive errors" in patient billing statements that forced the hospital to send out bills by hand and resulted in losses of more than $16 million, according to a complaint filed against Cerner, the world's largest publicly traded health information technology company.

Agnesian Healthcare, in Fond Du Lac, Wis., is suing Cerner for fraud and breach of warranty over problems with the 2015 rollout of its revenue cycle system called Integrated Solution, which, court records show, the hospital purchased for $300,000. The hospital, which claims the software caused it to lose $16 million and harmed its reputation, is seeking $200,000 a month in damages and cancellation of its Cerner contract.

The problems started immediately after the hospital began using Cerner's software in its ambulatory clinics, according to the complaint. Cerner's Integrated Solution was automatically writing off reimbursable charges for services without any notice to Agnesian, the complaint states. "Due to the severity of coding issues, Cerner admitted to Agnesian that the Integrated Solution needs to be rebuilt."

In 2016, Cerner maintained that "all major issues" with Integrated Solution "were resolved," but in the past year, Agnesian discovered additional coding errors which "resulted in large amounts of undetected write-offs" of claims made to payers. Agnesian was unknowingly and automatically waiving reimbursement. Since then, Cerner has acknowledged that Integrated Solution must be rebuilt, but the employees tasked with this mission have since left the company. Now, in the months-long projection it will take to fix the problem, Agnesian must continue writing off stale charges, and the hospital might not meet federal billing requirements. $16 million is the amount that Agnesian has quantified in damages thus far, but in terms of its reputation and other far-reaching consequences, it's difficult to gauge how substantial the damage really is.

In a statement, Cerner says that it "disagrees with the allegations and will aggressively defend the case." Agnesian did not respond to requests for comment.

Joe Madsen

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