UVA grapples with GE in electronic records suit

UVA filed suit against the software company it hired to create an electronic medical system for its hospital in 2009, a decade after it first entered the contract. Photo by Jack Looney.

More than three years after it filed a $30 million lawsuit against the software company hired to design an electronic records system for its hospital, UVA heads to Charlottesville Circuit Court this week, and while the suit is expected to suck up an unusually large amount of the court’s time, it’s just the latest chapter in a battle over new technology that’s lasted 13 years.

According to UVA’s complaint, the deal dates to 1999, when UVA contracted with tech firm IDX to develop an electronic medical record system, or EMR, for its hospital. But problems started early, UVA claimed, with IDX failing to hit milestones on the multi-phase project. When technology company GE took over IDX in 2006, the parties got together to rework the contract. But UVA said the issues continued, and it ultimately pulled the plug, saying GE failed to meet its obligations.

GE, meanwhile, claimed it was UVA that broke contract. The two parties had agreed to work together on the complicated project, according to the company’s counterclaim. UVA was to act as a development partner, collecting and processing two decades’ worth of patient data and building and testing the system. But the medical center didn’t hold up its end of the bargain, said GE, making it impossible for the company to stay on schedule.

By 2007, UVA was dragging its feet, said GE, pushing off its own deadlines and quietly looking for another company to finish the project. GE said that in June 2008, the University announced it was searching for a new vendor.

In February 2009, UVA awarded a $60 million contract to Epic Systems Corporation and filed suit against GE, demanding the $20 million it had paid the company and $10 million in damages. GE wants $1.6 million it claims it’s still owed by UVA, as well as unspecified compensation for lost profits and expenditures.

Besides involving big names and big numbers, the suit also highlights the fact that contract squabbles slowed the UVA medical center’s adoption of a comprehensive system for digitized medical records—technology that industry and the government now consider essential. Many large teaching hospitals, including those at Duke, Vanderbilt, and the University of Wisconsin, had patient and prescription records in place for years before UVA fully implemented EMR in 2010 and 2011.

Neither UVA’s nor GE’s attorneys responded to requests for comment, and a medical center spokesman said he couldn’t discuss current litigation. But Charlottesville civil attorney Robert Yates, who isn’t involved in the suit, said that in a battle over who broke a deal first, it’s rare to find litigants settling out of court.
“It’s very difficult for these parties to get together, because they get entrenched in saying who owes who money,” said Yates.

In many ways, the suit isn’t that different from any other contract dispute, but it’s generated some buzz in the local legal community, he said, because it’s got a very big footprint.

Circuit Court Judge Edward Hogshire has been sifting through thousands of pages of filings in the case, and has set aside three weeks to hear it because of the amount of complex technical testimony involved. The sheer volume of evidence attorneys will be slogging through was a big part of why it took so long to get the case on the docket, Yates said.

“You can imagine the scope of a contract of this magnitude in terms of the data—20 years of medical records, and however many hundreds of thousands if not millions of patients,” he said. “The legal issues are not that complicated. It’s the evidence that’s complicated.”

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