Cerner to pay $1.9M to settle racial discrimination claims in deal with federal regulators

Health IT vendor Cerner struck a settlement deal with the U.S. Department of Labor to resolve claims that the company engaged in discriminatory hiring practices against qualified Black and Asian job applicants.

Cerner agreed to pay $1.86 million in back pay and interest as part of a deal with federal regulators made public this week.

The company entered early resolution to resolve the allegations voluntarily and agreed to split the money among 1,870 applicants who sought employment as medical billing account/patient account specialists, system engineers, software interns and technical solution analysts between 2015 and 2019, according to a Department of Labor (DOL) news release.

The DOL's Office of Federal Contract Compliance Programs said it found evidence of discrimination after a routine compliance review of the company. Cerner holds federal contracts with the Centers for Disease Control and Prevention and the U.S. Department of Veterans Affairs, according to DOL.

An agency order prohibits federal contractors from discriminating in employment based on race, color, religion, sex, sexual orientation, gender identity or national origin.

The federal regulator alleged that Cerner systemically discriminated against qualified Black and Asian applicants who applied for positions to work at five facilities in Missouri and Kansas, specifically at its Cerner Oaks Campus and Cerner Innovations Campus in Kansas City, Missouri, and at its Cerner Corp. and Cerner Continuous Campus North Tower in Kansas City, Kansas.

Office of Federal Contract Compliance Programs Regional Director Carmen Navarro said the agency will work with Cerner to ensure that the issues identified in the compliance evaluation are resolved and that Cerner puts into place "procedures to ensure compliance with equal employment opportunity laws."

In addition to the distribution of back pay and interest under the agreement, the company will ensure that its hiring procedures are monitored and free from discrimination. 

Cerner does not admit liability and denies the allegations.

Federal regulators claim they found statistically significant differences in the hiring rates for Black and Asian applicants compared to similarly qualified white applicants in their review of Cerner's hiring practices, according to the compliance agreement between Cerner and DOL.

The alleged bias in hiring practices resulted in a shortfall of Black and Asian hires at Cerner during the four-year period, according to DOL.

In its review, the federal regulator found statistically significant differences in the hiring rates for racial minority applicants when compared to similarly  qualified white applicants for medical billing and patient account specialist positions, resulting in a shortfall of 35 Black/African American hires and five Asian hires.

Systems engineers had a shortfall of 20 Black hires and 12 Asian hires, and technical solutions analysts had a shortfall of 10 Asian hires, the DOL said.

Software giant Oracle bought Cerner in a $28.3 billion deal in June. Oracle has ambitious plans to leverage the EHR vendor to build a national health record database that would pull data from thousands of hospital-centric EHRs, Oracle's chairman Larry Ellison said.

The database giant also inherited Cerner's $16 billion beleaguered VA tech project and is working to fix the problem-riddled system.