Allscripts Sues Epic and New York City’s Public Hospital System

One of the country’s largest providers of electronic medical records has lodged a complaint against New York City’s public hospital system for awarding a $303 million contract to a rival. The company, Allscripts, lost its bid last month to replace the public hospital system’s fragmented and antiquated medical-records system with an integrated system that would link 11 public hospitals, 70 clinics, thousands of doctors and more than one million patients and allow them to communicate with one another.

The contract went instead to Epic Systems Corporation, Allscripts’s chief rival for the highly competitive medical-records business. The industry is getting a huge lift from billions of dollars in federal stimulus money to help health care providers share medical records. Allscripts claimed that when all ancillary costs were included, its system would be more than $700 million cheaper to build than the $1.4 billion total cost over 15 years that the hospitals corporation has estimated it will take to build the Epic system.

“If you’re going to spend that much money, just tell me why,” Glen Tullman, the chief executive of Allscripts, based in Chicago, said on Tuesday. “This is a trade-off. Do I hire more teachers, more doctors, more nurses, or do I give the money to a software company?” Allscripts has filed a complaint with a procurement-review board within the Health and Hospitals Corporation, which runs the city’s public hospitals. The contract will not be in force until the complaint is formally resolved...