Agnesian HealthCare is suing health IT vendor Cerner for $16 million to recoup losses the provider says it incurred as a result of coding errors in Cerner’s billing software that resulted in large numbers of undetected claims write-offs made to payers.

The “wrongful conduct” case filed by the Fond du Lac, Wis.-based not-for-profit provider, which operates St. Agnes Hospital in Fond du Lac and hospitals in Ripon and Waupun, is in response to the implementation of an integrated Cerner registration, scheduling, billing and claims handling solution for Agnesian’s ambulatory clinics that went live in August 2015.

“Immediately after going live, Agnesian experienced pervasive errors inpatient billing statements,” states the legal complaint. “Agnesian began to expend extraordinary amounts of time and financial resources to manually process patient billing statements. Continuing problems with the integrated solution resulted in a huge backlog of patient claims for reimbursement, the effects of which Agnesian is still experiencing.”

Cerner said in a written statement that it “disagrees with the allegations and will aggressively defend the case.”

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Agnesian alleges in its complaint that, in the summer of 2016, Cerner “represented that all major issues were resolved and that the integrated solution was stable.” However, the provider subsequently learned that the system was “automatically writing off reimbursable charges for services without any notice to Agnesian” resulting in “large numbers of undetected write-offs of claims made to insurance companies and other payers.”

Still, the worst is not over, contends Agnesian as the situation “continues to cause grave damage” to its reputation with thousands of patients “subject to the stress of not being able to reconcile their billing statements to the healthcare services provided” as well as damages of at least $200,000 per month.

Agnesian’s suit also claims that the Cerner system requires a complete rebuild of the professional billing program logic, but the project “has now ground to a halt” because qualified Cerner personnel are no longer employed by the vendor. Consequently the provider says it “may not be able to upgrade to the federally mandated 2018 Certified Electronic Health Record Technology platform” which “materially impacts Medicare and Medicaid provider participation reimbursement to Agnesian.”

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