A Wisconsin district court judge has dismissed Agnesian HealthCare's lawsuit against Cerner and ruled that the health system must settle its dispute through arbitration in the vendor’s home state.
Agnesian filed its claims against the software vendor in September alleging that “pervasive errors” within Cerner’s billing and coding software cost the system at least $16 million since its installation in 2015. Agnesian also claimed it continues to spend $200,000 per month to manage system defects.
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But J.P. Stadtmueller, a U.S. district judge for the Eastern District of Wisconsin, sided with Cerner, which had filed a motion to dismiss the lawsuit in favor of arbitration. In an order filed on Friday, the judge pointed to language in the sales agreement that required the two companies to submit the dispute to binding arbitration.
The judge also ruled arbitration must take place in Cerner’s home state of Missouri since Agnesian is the party that initiated the dispute. Agnesian had pushed for arbitration to take place in Wisconsin, but Stadtmueller specifically called out the health system for trying to “gain a favorable venue” by filing a lawsuit in Wisconsin.
“Such gamesmanship cannot be tolerated,” the order states. “If Agnesian has a dispute with Cerner, the contract says that it must take its complaint to Cerner.”