Five Pitfalls to Look for When Negotiating EHR Vendor Contracts

Monday, August 10, 2015
By: Lance O. Leider, J.D.

In late 2012 a group of physicians filed a class action lawsuit against electronic health records (EHR) giant Allscripts.  The suit was brought on behalf of approximately 5,000 physician practices which purchased Allscripts MyWay EMR solution.  It is alleged that after years of problems related to functionality and quality, Allscripts abandoned MyWay and offered the physicians a "free" upgrade to a new EHR program. In this blog, I use "EHR" and "EMR" (electronic medical record) interchangeably.

Increasing Number of Physicians are Dissatisfied with the EHR Systems They Purchased.

The lawsuit alleges that the only catch was that the physicians would have to pay for training their employees and to migrate their data out of the old system and into the new.  Industry surveys indicate an increasing number of physicians are dissatisfied with the EHR systems they purchased.

Many of the problems faced by these physicians could have been resolved in contract negotiation stages if only the providers had not signed the "Standard Agreement" presented by the EHR vendor.

Five Things to Keep in Mind When You Are Shopping For, or Negotiating the Purchase of, a New EHR System.
(1)    Everything is negotiable.  Do not sign the Standard Agreement.  Take the time to review every part of the contract and decide what level of risk is acceptable to you.  You will not be able to rewrite the entire contract, but you should be able to polish some of the rougher terms down to something acceptable.  Remember, in a crowded marketplace you have something the vendor wants too, your money.

(2)    Time is not of the essence.  Do not fall for the sales person's "act now or the price will go up" ruse.  If a company does not want to give you the time to review the sales or licensing agreement or to investigate its references, you do not want to do business with it.

(3)    Plan your exit strategy.  You should spend at least as much time thinking about and negotiating what happens at BOTH the natural end of the contract and possible early termination as you do thinking about and negotiating the price.  With so many unhappy customers out there in the EHR market, you should plan for the worst.  

(4)    Do not allow your data to be held hostage.
  This goes hand-in-hand with planning your exit strategy and is probably the most important term in the entire deal.  You absolutely have to make sure that your data remains yours at the end of the contract no matter what.  The terms of the data export should be set out in detail including things like: the file format, the time line for exporting it, the media onto which it is exported, the cost of converting and exporting the data and an entitlement to export even if the EHR vendor considers you to be in default on the agreement.

(5)    Avoid the revolving door.
  You should try and negotiate a restriction into the contract making it difficult for the vendor to take experienced and qualified people off of the project and replace them with newer inexperienced ones.  It is best to try and get a specific person assigned to the project so you have a defined point of contact for all issues.  It is important to avoid the double whammy of having a trainee training your people to use the system.

(BONUS)    Although it seems counterintuitive, but getting your attorney involved earlier will actually speed the process up.  Practices should avoid having lay people negotiate the contract and then forward it to a legal advisor at the eleventh hour.  Often times this results in the attorney identifying a number of issues that were not previously considered and can give the appearance of slowing the transaction down.  (Coincidentally, this is the reason why many sales people give artificial time limitations on pricing.)

By getting an attorney involved early on in the process it is possible to more  quickly identify issues that need to be negotiated and close the transaction sooner.

To read one of our past blogs on EHR vendors, click here.


What is your opinion on the use of EHR systems like Allscripts? Have you faced any problems with EHR systems and how did you respond? Please leave any thoughtful comments below.


Torrieri, Marisa. "What Physicians Can Learn from the Allscripts EHR Lawsuit." Athena Health.  (May 16, 2013). From:

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About the Author:  Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

Keywords: Electronic Medical Records, EMR, electronic medical records systems, EMR systems,
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