Washington health system blames Cerner for bankruptcy

Astria Health's former EHR and revenue cycle vendor is to blame for the health system's bankruptcy and the closure of one of its hospitals last year, according to a complaint filed March 22 in bankruptcy court. 

Astria Health, which operates hospitals in Sunnyside and Toppenish, Wash., filed for Chapter 11 bankruptcy in May 2019. At that time, Astria comprised three hospitals. In early 2020, the health system closed its hospital in Yakima, Wash. 

In its complaint, filed as part of an adversary proceeding in bankruptcy court, Astria claims Cerner and its subsidiary, Cerner RevWorks, made "intentional misrepresentations" before entering a contract for EHR and billing services, according to the Yakima Herald. Several times throughout the complaint, Astria alleges Cerner's revenue collection systems were responsible for its financial strain.

"Cerner's faulty EHR and billing and collections platforms failed so spectacularly that they drove Astria, a revered nonprofit hospital system in Eastern Washington, into bankruptcy in May 2019," the complaint states. 

Astria cited issues with its revenue cycle vendor since it filed bankruptcy, but it didn't initially name Cerner in bankruptcy court documents. In a press release issued May 6, 2019, the health system said it was facing a significant shortfall in cash flow due to issues with the company it contracted with to manage its billing in August 2018. 

In the recently filed complaint, Astria alleges that claims submitted to government payers were frequently rejected after switching to Cerner. The system says collections were at 97 percent of net revenue before installing the billing system in the summer of 2018, and that fell to 54 percent after the switch, according to the report. 

In a statement to the Yakima Herald, a Cerner spokesperson said the company will dispute the allegations. 

"We categorically deny the allegations made in the lawsuit, we disagree on the merits and we will vigorously defend the company," the statement said, according to the report. 

Astria is seeking damages from Cerner and has asked the court to void any claims the company has filed against the health system during the bankruptcy process. 

Read the full article from the Yakima Herald here

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