Cancer clinic sues tech company over software malfunctions

Tennessee Oncology paid $900,000 to Allscripts Healthcare, but remains unhappy with results

Email | Print By Glenna DeRoy

A statewide cancer clinic claims it paid for technology services it never received and has sued the Chicago-based tech firm that vowed two years ago to move the company toward an electronic medical records system.

Tennessee Oncology, which provides cancer care, chemotherapy and support services, sought to streamline its systems in 2005 to increase its use of electronic record-keeping methods and reduce expenses incurred with the operation of multiple software systems.

Allscripts Healthcare Solutions Inc. sold the company a version of its TouchWorks software program after TN Oncology selected it from among several companies' offerings.

Allscripts announced yesterday it will merge with London-based Misys Healthcare, also a medical software company. Matthew Curley, the Bass, Berry & Sims lawyer representing TN Oncology, said he did not think Chicago-based Allscripts (Ticker: MDRX) has yet secured representation in this legal action.

Todd Stein, of Allscripts' public relations department, did not return a call for comment Wednesday afternoon.

TN Oncology CEO Dr. Charles McKay was under the impression Allscripts could complete the project within the agreed-upon time frame, according to the complaint. But the software proved too unstable to operate and the cancer care company has paid almost $900,000 without being satisfied with the result.

"Allscripts essentially used TN Oncology as a test site where they developed the software during the course of the implementation and hoped they could work out the flaws during that process," the lawsuit claims.

TN Oncology's situation illustrates the struggles gripping many sectors of the healthcare sector, which – while it is growing at a healthy clip – has long lagged other industries in implementing effective IT innovations. In one of the most noteworthy cases in recent years, California-based Kaiser Permanente spent billions on an EMR system that suffered from reliability and scalability issues.

McKay alleges he was assured the newest version of Allscripts' software program would be ready to go by the summer of 2006, but the system does not work properly to this day. Curley declined to offer more specific information about the system's flaws.

"The crux of it was it just didn't work," he said.

Allscripts CEO Glen Tullman was notified multiple times in late 2007 of these deficiencies, according to the lawsuit, and at that time, he promised the company would increase its effort and resolve all the problems. But the lawsuit claims those concerns were never addressed.

The complaint asserts TN Oncology was unable to meet obligations and lost out on business opportunities as a result of these issues. The company further claims that its business was less efficient on Allscripts' system than it had been on the various older software programs it used. TN Oncology has asked for their $900,000 back and also seeks further damages.