Allscripts Sues NYC Provider and Epic After Losing Contract Bid

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Allscripts Healthcare Solutions has sued New York City Health and Hospitals Corp. and electronic health records vendor Epic Systems Corp. after Epic got a $303 million contract from the delivery system. The lawsuit is available here (scroll down to Petition).

Allscripts in October filed a protest of the award, arguing the final bids differed by only $4 million but its system’s total cost of ownership was hundreds of millions of dollars less. Now, Allscripts argues in the suit, filed December 13 in the Supreme Court of the State of New York, County of New York, that HHC’s award “for myriad reasons, is arbitrary, capricious, an abuse of discretion, and lacks a rational basis.”

Properly calculated, Allscripts contends that the total cost of ownership of its proposal “represents savings of up to $535 million in comparison to Epic’s proposal. The little consideration that HHC gave to cost was plainly irrational. For example, HHC awarded point scores to offerors under the undisclosed evaluation criterion of ‘overall cost.’ Although Allscripts’ proposed cost was indisputably lower, Epic’s point score under this criterion was 27% higher than Allscripts’. As explained herein, HHC’s evaluation of non-cost factors was equally flawed and wholly unsupported by the administrative record.”

Allscripts further charges in the suit that HHC did not follow its own prescription for total cost of ownership. “In comparing Epic’s and Allscripts’ proposed costs, HHC failed to normalize the TCO of the two offers and presented the board with an inflated and misleading presentation of Allscripts’ base proposal costs.”

HHC officials previously contended that Allscripts simply could not offer the level of interoperability that Epic can. Allscripts in the lawsuit appears to downplay that argument, quoting HHC’s solicitation document: “We recognize that vendors may not be able to meet all requirements today. Therefore, we will evaluate vendors based on both the current functionality of their proposed solution as well as their demonstrated commitment and ability to provide the remaining functionality early in the course of the contract.”

HHC provided Health Data Management with the following statement: "Allscripts’ claim that it underbid Epic by more than half a billion dollars is absurd and strikes us as an ill-fated attempt to reassure investors and inflate its sagging stock price. Unfortunately, as our multi-year review has revealed, Allscripts lacks a truly integrated EMR solution and has repeatedly lost business to Epic and other vendors as a result. HHC will defend its well-supported decision and prevail in this lawsuit."

Epic declined to comment on the lawsuit.


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