Electronic health record vendor Allscripts has filed a lawsuit alleging that the New York City Health and Hospitals Corporation improperly awarded a contract worth about $303 million to a rival EHR vendor -- Epic Systems -- which also is named as a defendant in the lawsuit, Modern Healthcare reports (Barr, Modern Healthcare, 12/14).
Allscripts filed the lawsuit last week in New York State Supreme Court in Manhattan (Dolmetsch, Bloomberg, 12/13).
About the Contract Bids
In September, Allscripts lost a bid to replace HHC's fragmented EHR system with a new, integrated EHR system that would link 11 public hospitals, 70 clinics, thousands of physicians and more than one million patients. Allscripts' proposal would have cost $299 million, according to HHC documents.
Instead, HHC awarded a $303 million contract to Epic. The HHC documents characterized the price difference as minimal (iHealthBeat, 10/11).
In October, Allscripts filed a protest of the contract award. The filing claimed that although the final bids differed by only $4 million, the total ownership cost for Allscripts' EHR system would be hundreds of millions of dollars less (Goedert, Health Data Management, 12/14).
Details of the Lawsuit
In its lawsuit, Allscripts alleged that HHC's selection of Epic was "arbitrary, capricious, an abuse of discretion and lacks a rational basis."
According to Allscripts, its proposal would have saved HHC $535 million compared with Epic's proposal (Modern Healthcare, 12/14).
"HHC failed to follow evaluation criteria which required that award be based, in part, on the comparative total cost of ownership of offerors," the suit alleged.
Response From HHC
HHC in a statement said, "Allscripts' claim that it underbid Epic by more than half a billion dollars is absurd and strikes us as an ill-fated attempt to reassure investors and inflate its sagging stock price" (Bloomberg, 12/13).
The statement added, "Unfortunately, as our multi-year review has revealed, Allscripts lacks a truly integrated [EHR] solution and has repeatedly lost business to Epic and other vendors as a result. HHC will defend its well-supported decision and prevail in this lawsuit."
Epic declined to comment on the case, according to Health Data Management (Health Data Management, 12/14).