Doctors Group Sued for Alleged Unpaid EHR Implementation Fees

A Fresno health IT firm is suing one of the city’s largest physician networks, alleging that the network failed to pay more than $1.5 million in fees for Epic EHR implementation and maintenance services, according to reporting from The San Joaquin Valley Sun.  

Physician Network Advantage, Inc. (PNA) filed the complaint against Santé Health Foundation, its for-profit arm, Santé Health System, Inc., and CEO Scott Wells in late October.

Santé retained PNA for EHR services after making a request for funding from its hospital partner, Community Medical Centers.

The complaint noted that Community is unable to directly hire physicians to work in its facilities under California law, so it provides grant funding to physician groups to pay salaries and cover the cost of services, including the EHR software provided by PNA.

Beyond one-time setup fees, funding requests for individual Santé doctor groups “was to include funding to partially compensate for monthly maintenance and support services provided for a certain period of years,” the complaint alleged.

The complaint focused on an unnamed physician group, “Santé Physician Practice Group 1,” which set out to leverage PNA EHR implementation services in July 2019.

PNA demanded $318,750 from Santé for the EHR system’s initial set-up in January 2020, the complaint reads.

The suit alleges that Santé either failed to make a grant request to Community or withheld the six-figure grant funds for EHR payments. The doctor network also failed to pay for ongoing monthly maintenance fees for Santé Physician Practice Group 1, the health IT firm alleged.

The same nonpayment issues arose in other Santé doctor groups that had retained PNA, the company said in the complaint.

According to the lawsuit, PNA alleged that Community notified Santé that it would need to make changes to continue to receive grant funding in spring of 2020.

The complaint alleges that Santé Health Foundation, Santé Health System, Inc., and Wells assured PNA they were working to meet Community’s requirements to maintain their status as a proper recipient of grant funding.

However, Community stopped distributing grant funding to Santé Health Foundation by the end of August 2020 due to the network’s failure to comply with required changes, the complaint claims.

The complaint goes on to allege that Community committed to fulfill its grant obligations through August 2020.

However, despite having its grant funding cut off by Community, the company alleged that Santé officials continued to make it seem as if they were working to remain in compliance and keep funds coming.

In total, PNA alleges that the doctor network has failed to pay $1,550,660 in fees and claims Santé breached the contract, along with engaging in material concealment, intentional misrepresentation, and making promises without the intent to perform in pursuit of a fraud.

In a statement issued to The Sun, Santé officials claimed that the allegations from PNA were unfounded.

“Under the terms of our agreement with PNA, Santé was only liable for payment if and when we received the grant funding required to cover PNA’s services from Community Health System,” the doctor network said.

“PNA is well aware of this condition and was fully informed by their parent organization Community Health System that the funding would cease on or around September 1, 2020, when Community Health System discontinued grant funding for Santé physician services and ended a 10-year partnership,” Santé officials continued.

The statement claimed that PNA and Community opted to continue services knowing that they would not be entitled to compensation under the contract.

“Obviously, PNA assumed its parent company, Community Health System, would reimburse them for the services provided,” the officials added.

Ian Wieland, an attorney for PNA, pushed back on assertions made by Santé relative to Community Health System.

“PNA is a local Fresno-based business that specializes in implementing an electronic medical record system, which helps healthcare providers improve practice workflows and patient care,” Wieland said. “PNA is an independent business that is not controlled by Community and Community is not the parent organization of PNA.”