Cerner Pays $106M After Losing Arbitration Ruling
Cerner, the Kansas City-based electronic health record (EHR) vendor, will pay a North Dakota hospital $106 million after losing out in an arbitration ruling over a patient accounting product.
According to The Kansas City Star and a filing with the Securities Exchange Commission (SEC), Trinity Medical Center in Minot, N.D. told Cerner that it was transitioning away from the company’s patient accounting software and certain IT services, which it bought in 2008. Trinity alleged that the software was defective and did not deliver on promised benefits.
After discussions, the parties agreed to arbitrate the dispute, including Cerner's counterclaim, and a hearing commenced Oct. 9, 2013.The ruling awarded Trinity damages and the company recognized a gross pre-tax charge of $106.2 million, which cut into its fourth quarter earnings. According to The Star, Trinity claimed damages of $240 million and Cerner had an expert witness say any liability by the company would be worth up to $4 million.
The SEC filing notes that the hospital remains a client of Cerner's.
