Hospital group wins $106m settlement in Cerner dispute

By Tony Collins

 A US health organisation Trinity Medical Centre has won a $106m settlement in  a legal dispute with Cerner, which is one the main suppliers of patient record systems to NHS trusts in London and the south.

Under the NPfIT BT has installed Cerner at trusts that include the Royal Free, London, Barnet and Chase Farm Hospitals NHS Trust, Weston Area Health NHS Trust, Barts Health NHS Trust, North Bristol NHS Trust and more recently at Croydon Health Services NHS Trust.

The Wall St Journal says a clinical patient accounting program Trinity bought from Cerner in 2008 was defective and didn’t deliver the promised benefits, which Cerner disputed. Trinity sought about $240m in damages; Cerner estimated $4m.

The companies agreed to submit the dispute to arbitration which began in October 2013.

Cerner said it “strongly disagrees” with the award and believes the claim was based on unique circumstances. It called the award the only material judgment against Cerner in its 34-year history.

US lawyer Michael Dagley says his firm won a $106m settlement for North Dakota-based Trinity Medical Centre in an arbitration case against Cerner.

The firm says that Trinity alleged in 2012 that patient accounting software and other services purchased from Cerner were defective, producing thousands of billing errors.

“We think it’s tremendously significant because it represents the first major victory that we’re aware of by a health care provider against a software vendor,” Dagley said in a statement.

“Providers are under pressure to automate and vendors are under pressure to offer integrated products. Providers want one vendor for all their IT needs, so the vendors have this incentive to deliver software to the market as quickly as possible, and that can lead to products being introduced that are immature and defective, which in health care, can cause tremendous damage.”

Last year Cerner said it believed the chance of a material loss related to the matter was remote and it had 147 hospitals and 735 clinics using the patient accounting program.

Despite the settlement Cerner’s share price has held up well.

Trinity Medical Centre is a non-profit organisation with about 2,700 employees.