Allscripts files complaint over NYC public hospitals contract with rival Epic

EHR vendor Allscripts has filed a formal complaint against New York City's public hospital system after rival Epic was awarded a $303 million contract to build a new integrated system.

The contract was awarded after a four-year process in which a procurement-review board within the city's Health and Hospitals Corporation considered proposals from nine vendors, according to The New York Times.

The new system will be designed to facilitate communication between 11 public hospitals, 70 clinics, thousands of doctors and more than 1 million patients. That's the type of integrated system larger hospitals favor in their quest to meet Meaningful Use requirements.

The hospital system determined that replacing its aging and fragmented system would cost just $157 million more than upgrading it, and expects to receive $125 million in federal funds to help cover the difference.  

The contract with Epic will not go into effect until the complaint is resolved. Hospital corporation documents show the board found only a minimal difference in the two companies' proposals--Epic bid $303 million and Allscripts $299 million, the Times says. The bigger issue was total cost of ownership over 15 years, including third-party software and hardware and support services.  Allscripts contends that its proposal would cost $700 million less than the $1.4 billion total estimated for the Epic system.

But Alan Aviles, president of the corporation, cited among the questions about Allscripts' proposal its estimate of no cost for an application-support team for the new system. The agency has estimated that cost at $357 million.

Aviles also said the leadership shakeup at Allscripts and reports that the vendor is considering a leveraged buyout solidified the board's decision to go with Epic. Bloomberg Businessweek reported this week that Allscripts has received first-round bids from private equity firms, but is seeking a second round of offers for the company. Glen Tullman,  Allscripts' CEO, declined comment on that story to the Times.

Allscripts fired Chairman Phil Pead in April, then three board members and its CFO resigned. The turmoil continued when a shareholder launched a proxy fight. But in August, the company posted a better-than-expected second quarter, rebounding from a dismal first quarter fueled by the board discord.

To learn more:
- read the Times story
- here's the Bloomberg article

Suggested Articles

To build a successful network for health information exchange, policies must provide enough time and flexibility for the networks to develop and scale

Welcome to this week's Chutes & Ladders, our roundup of hirings, firings and retirings throughout the industry.

Federal lawmakers are taking a hard look at how the VA protects patient data shared with VA-approved health apps.