A West Side Chicago hospital is seeking more than $2 million in damages from a Nebraska software company, claiming it provided a flawed new information system that caused havoc in the facility’s medical record-keeping.
Sacred Heart Hospital accuses American HealthNet Inc. of Omaha of fraud, breach of contract and deceptive trade practices related to the sale and implementation of a new information system, according to a lawsuit the hospital filed Dec. 30 in U.S. District Court in Chicago.
The hospital, at 3240 W. Franklin Blvd., said it had problems with billing and record-keeping almost immediately after the system was installed in August 2002 until late last year when the system was abandoned.
American HealthNet denies wrongdoing, describing the suit as a response to the company’s efforts to collect on past-due payments from Sacred Heart.
The damages are a significant claim for Sacred Heart, one of the city’s smallest hospitals, with 96 beds. Expenditures for information systems are big-ticket items for any hospital.
Furthermore, the hospital said the surrounding dispute and alleged flaws in the system could have put patients’ health at risk.
“Multiple numbers were assigned to the same patient and different patients were assigned the same number, confusing patient records and medical histories and precluding Sacred Heart from pulling complete records for many patients,” the suit states. American HealthNet said it entered into an agreement in April 2002 to install portions of its system, to be upgraded later to its new “Clarus” software. But the hospital fell behind in paying its bills to American HealthNet by the end of 2002 and the newer software was never installed.
“In 2003, AHN limited their services to Sacred Heart awaiting payment,” a statement from American HealthNet said. “In December 2003, AHN initiated a collection action on sums due. Sacred Heart, in turn, responded with the suit in Chicago.”
No patients are known to have been hurt from the system problems, the hospital’s attorneys said, but extra measures had to be taken to ensure patient safety and to prevent records from being mixed up.
“It required our staff to engage in a lot of manual activity that they did not have to do before and did not expect to do under the new system,” said James Pranger, a Chicago attorney representing Sacred Heart.
“It created certain risks potentially to patients and put the hospital at risk for being out of compliance for regulations,” Pranger added. “It generally bogged down our ability to perform all of the functions typically done using this type of software.”
American HealthNet executives wouldn’t agree to an interview but said its system installed by Sacred Heart has been operated successfully by “many other hospitals over the past several years.”
Sacred Heart and its parent corporation, West Side Hospital Inc., seek more than $2 million in damages plus interest, attorney fees and related costs.
Sacred Heart said it spent “significant sums” purchasing new hardware and paid American HealthNet more than $260,000 for licensing and support fees, the suit states.
