Judge orders Wisconsin health system to settle dispute with Cerner outside of court

A Wisconsin district court judge has dismissed Fond Du Lac, Wis.-based Agnesian Healthcare's lawsuit against Cerner, a Kansas City, Mo.-based health IT company.

Agnesian Healthcare sued Cerner in September, claiming issues with its revenue cycle management software caused the system to lose $16 million. In its complaint, Agnesian alleged it began experiencing "pervasive errors" in patient billing immediately after going live on Cerner's RCM system in August 2015. Agnesian says the problems caused it to spend time and money to manually process patient billing statements and resulted in a significant backlog of patient claims for reimbursement. The health system said it continues to suffer damages of at least $200,000 per month due to the billing software problems.

On Sept. 21, Cerner asked the court to dismiss the case due to the existence of an arbitration agreement between the parties. On Dec. 8, J.P. Stadtmueller, a U.S. district judge for the Eastern District of Wisconsin, granted Cerner's motion.

"This case must be dismissed for improper venue because Agnesian was not allowed under the parties' contract to initiate a lawsuit rather than arbitration," the order states. "Although it appears that the parties will agree to arbitrate if it is sought in Missouri, the court leaves any question of the enforceability of the arbitration provision for the Western District of Missouri to decide, if necessary."

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