By Marla Durben Hirsch
In the market for an electronic medical records (EMR) upgrade or even a new system? Be forewarned: EMR vendor contracts are more onerous than ever, with vendors limiting their liability if their software causes users problems - conveniently just as several problems are coming to light.
EMRs have been maligned for their usability and functionality problems for years. But in recent months bigger issues have been surfacing.
For instance, it has been discovered that some systems default to particular billing functions when they shouldn’t, causing providers to bill improperly. The bills are now being denied and the providers are being required to return the ensuing overpayments, according to attorney Robert Markette, with Hall, Render, Killian, Heath & Lyman in Indianapolis.
Other snafus have garnered more media attention. eClinicalWorks paid $155 million several months ago to settle claims that it misrepresented the capabilities of its software and falsely obtained certification in the EMR Meaningful Use incentive program. Allscripts was hit by a ransomware attack in January, causing 1,500 providers to suffer service outages, some lasting a week.
“It’s especially bad when their software screws up,” says Markette.
Physician practices have filed class action lawsuits against both vendors for their respective transgressions.
However, these lawsuits may not do much good, since the vendor contracts the practices signed could leave the practices with little recourse if something goes wrong, according to attorney Elizabeth Litten, with the law firm of Fox Rothschild in Princeton, New Jersey.
“You may be on the hook for their failures,” warns Litten.
Just a quick search on the Internet bears this out. Here is a paragraph from a form contract between Yale New Haven Health Services Corporation and its hospitals with a physician practice that enables the practice to access Yale’s Epic Systems EMR:
“Limitation on Liability. Neither YNHHSC nor Hospital shall have any liability for any damages whatsoever (including loss of profits or loss of goodwill) resulting from, arising out of or in connection with the use or inability to use or the performance or non-performance of the EMR System or any items or services provided under or in connection with such EMR System or this Agreement or the Practice Equipment, even if it has been advised of the possibility of such damages or should have known of the possibility of such damages, and whether such liability is based on contract, tort, negligence, strict liability, products liability or otherwise. Practice agrees that YNHHSC’s and Hospital’s aggregate liability for damages arising under this agreement, regardless of the form of action and irrespective of fault or negligence, shall in no event exceed an amount equal to the aggregate Practice Payments made by Practice under this Agreement during the immediately preceding 12-month period. The limitations of liability and disclaimers of warranty stated in this Agreement form an essential basis of the bargain between the parties.”
In essence, the most the practice can obtain – according to the contract -- is what it paid for the privilege of access in the past year.
“This will be a frequently debated issue,” says attorney Michael Kline, also with Fox Rothschild.
Know where you stand
Practices may not have a lot of negotiation leverage regarding their EMRs, but some contracts are more fair than others, so if you’re in the market shop around. If you find a system you like but the contract is onerous, it can’t hurt to try to negotiate better terms.
At the very least, read the fine print of any new, existing or renewal contract and know what the vendor is willing to be on the hook for should its software adversely affect you. You probably won’t be made whole but at least you won’t be blindsided.