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A Sunnyside, Washington-based health system is laying the blame for its 2019 bankruptcy squarely on the shoulders of its EHR vendor — Cerner.
In a lawsuit filed last week, Astria Health claims that Cerner’s EHR and billing and collections platforms “failed so spectacularly” that they drove the system into bankruptcy in May 2019. The health system eventually emerged from bankruptcy in early 2020, but not intact — one of its hospitals had to close.
North Kansas City, Missouri-based Cerner began pursuing Astria Health’s business in 2016, intentionally making several misrepresentations about the capabilities, features and pricing of its products and services, the suit alleges. The health system contracted with the vendor in 2017 for EHR services, and the following year, signed a contract for Cerner’s RevWorks revenue cycle management platform, which was deployed at all three hospitals.
The RevWorks platform failed to operate properly from the time the rollout began resulting in serious cash collections issues, the health system claims. Prior to the platform rollout, collections were 97% of net revenue. This figure dropped to 54% of net revenue after the system was implemented, Astria Health alleges.
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“…as a result of issues with RevWorks, Astria suffered a significant and catastrophic decline in cash flow from collections on accounts receivable,” the health system states in the lawsuit.
Astria Health ended up defaulting or falling behind on its payments to lenders, which, in turn, led to it filing for Chapter 11 bankruptcy protection, the lawsuit states. Further, the health system was forced to close Astria Regional Medical Center in Yakima, Washington, due to its cash collection issues.
Cerner denies the allegations made in the lawsuit, said Anamarie Rebori Simmons, a company spokesperson, in an email.
“We categorically deny the allegations made in the lawsuit, we disagree on the merits, and we will vigorously defend the company,” Simmons said. The company did not address any specific allegation.
It appears that Astria was not the only health system dissatisfied with Cerner’s RevWorks. In fact, in a 2019 KLAS report, 70% of clients said they would not buy the platform again. Cerner finally sold it to R1 RCM last June.
Cerner not only misrepresented the RevWorks platform, but also its EHR system and how the two would work together, Astria Health said in the lawsuit.
In 2017, Cerner claimed that its EHR and revenue cycle software fully integrate, combining clinical data and financial information. But Astria later learned that Cerner’s EHR system did not properly integrate with the RevWorks platform.
Astria Health insists that the issues with the Cerner systems “will continue to damage Astria in ways that cannot yet be quantified.” The health system is still using both the Cerner EHR system and RevWorks platform at its facilities, said Ashley Oswald, an Astria Health spokesperson, on a phone call.
The health system is seeking damages and the costs and attorneys’ fees they will incur in connection with this lawsuit.
In addition, it is asking for the $2.4 million that it paid to Cerner for the EHR and revenue cycle management systems.
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