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Cerner Files Protest over $62M EHR Contract Awarded to Epic

December 18, 2017
by Rajiv Leventhal
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Cerner Corp. has filed a protest against rival EHR vendor Epic Systems following an “unfair bidding process and a possible conflict of interest” for a recent IT implementation contract awarded by the University of Illinois (UI) medical center.

According to a report in the News-Gazette, Kansas City-based Cerner filed a protest with Illinois’ Chief Procurement Office for Higher Education over a $62 million, seven-year contract awarded Sept. 7 to rival software firm Epic, based in Verona, Wis. The report stated, “In a seven-page protest filed in late September, Cerner argued that its bid was $1.5 million lower than Epic's, at $60.5 million, and included all implementation costs whereas Epic's didn't.”

The medical center is associated with the University of Illinois in Chicago, and according to the report, the organization's chief financial officer told UI trustees recently that he believes proper processes were followed. And in information obtained by the News-Gazette from the state's chief procurement officer through the Freedom of Information Act, the university said its process was fair and complied with state procurement rules.

The project was launched so that UI Health could update and unify its 20-year-old electronic health records (EHRs) and billing systems. Cerner currently handles about 70 percent of UI's health records, and Epic has a smaller share, according to a Cerner attorney, the report noted.

Cerner also stated in its protest that Cerner it was unfairly denied a chance to demonstrate its product; Epic was the only bidder to provide a demonstration. However, UI Health’s response cited problems with Cerner products in the past and said Epic outscored Cerner in the evaluation of the contract proposals, according to the News-Gazette. The healthcare provider also said that the reason Cerner didn’t get the chance to demonstrate its product was because the proposals were first evaluated on technical merit and then pricing, and Cerner did not meet those standards.

But Cerner is arguing that UI Health’s request for proposal (RFP) required that "all costs" for the implementation of the project be included. Cerner's price included design, implementation, training and support. Epic failed to include "millions of dollars of implementation costs" that UI Health would incur, Cerner is alleging, per the News-Gazette report.

And to support these claims, Cerner cited price estimates compiled by Impact Advisors showing that the long-term cost of the project could amount to anywhere between $135 million to $165 million. These estimates put the cost of the project between $73 million to $103 million above Epic’s contract bid.

Meanwhile, Cerner is also stating that Impact Advisors, the Naperville, Ill.-based health IT consulting firm, “could benefit if Epic receives the contract because it has worked closely with that firm on the implementation of similar projects.” Impact, in response, said that it is an independent firm and works with numerous software firms on IT projects of this ilk.

For now, the project has been put on hold until the protest is resolved, according to the report.

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