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50 HEALTHCARE NEWS Wisconsin Health System Blames Cerner Software for $16M in Losses By Ayla Ellison F ond Du Lac, Wis.-based Agnesian Health- care is suing Cerner, claiming issues with its revenue cycle management soware caused the system to lose $16 million. In its complaint, filed Sept. 15, Agnesian alleges it began experiencing "pervasive errors" in patient billing immediately aer 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. Although Cerner allegedly told Agnesian officials in 2016 that all major issues with the billing so- ware were resolved, Agnesian claims it discovered additional coding errors this year, which resulted in a large amount of undetected write-offs. Cerner then determined the billing soware needed to be rebuilt. If Cerner is able to rebuild the soware, Agnesian claims it will take "many months" for its billing and collections processes to return to normal. "In the interim, stale charges will be required to be written-off. Moreover, as a result of these flaws, Agnesian may not be able to meet federally-man- dated billing requirements," the lawsuit states. Agnesian is suing Cerner for breach of warranty, negligent misrepresentation and fraud. e health system claims it has suffered at least $16 million in damages due to the problems with the billing soware and continues to suffer damages of at least $200,000 per month. In an emailed statement to the Kansas City Busi- ness Journal, a Cerner spokeswoman said the company "disagrees with the allegations and will aggressively defend the case." On Sept. 21, Cerner asked the court to dismiss the case due to the existence of an arbitration agreement between the parties. If the court does not dismiss the lawsuit, Cerner requested the court transfer the case from U.S. District Court for the Eastern District of Wisconsin to U.S. Dis- trict Court for the Western District of Missouri, which Cerner argues is the appropriate court to compel arbitration under the agreement with Agnesian. n Physician's Resignation Drives Virginia Hospital to Close By Leo Vartorella S tuart, Va.-based Pioneer Community Hospital of Patrick began divert- ing patients from its ER Sept. 13, before announcing later in the day that it will soon close within days, according to WDBJ 7. The ER shutdown is the first phase of the hospital's closure. All admitted acute care patients will be treated until they are ready for discharge or transfer, the hospital's clinic will continue to see scheduled patients and outpatient visits continued as scheduled until September 15. The hospital filed for bankruptcy in March 2016. Administrators were hop- ing to organize a sale of the hospital and seamlessly transition service, but were not able to reach a deal with a buyer. The resignation of one physi- cian appears to be the deciding factor for the change in plans to close. In a statement, the hospital said it was exploring a sale when the physician recruited in 2016 to lead its clinic submitted his resignation on July 31, with his final day being September 30. Patrick County's Emergency Services Coordinator told WDBJ 7 the county doesn't employ full-time EMS workers. They're volunteers, and the hospi- tal closure is expected to greatly affect them and transport times, which may go from 30 minutes to two to three hours. n CHI's Operating Loss Swells to $585.2M in FY 2017 By Ayla Ellison C atholic Health Initiatives, a nonprofit 103-hospital system based in Englewood, Colo., saw revenues increase in fiscal year 2017 but ended the period with an operating loss, according to recently released bondholder documents. CHI said operating revenues climbed to $15.5 billion in fiscal year 2017, which ended June 30, up from $15.2 billion in the year prior. The increase was largely attributable to higher net patient service revenue, which grew 4.4 percent year over year to $14.5 billion in fiscal year 2017. After factoring in expenses and one-time charges, CHI ended the most recent fiscal year with an operating loss of $585.2 million, compared to an operating loss of $371.4 million in fiscal year 2016. Fueled by an increase in investment gains, CHI recorded a net surplus of $128.4 million in fiscal year 2017, compared to a net loss of $575.6 million in the year prior. CHI said it continues to make progress in efforts to turn around its finances, including entering into an agreement to sell the Medicare Ad- vantage part of its health insurance subsidiary, QualChoice. The company, which announced plans in 2016 to exit the health insurance business, expects to complete the sale in fiscal year 2018. n

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