Hunter
12/25/23
The company in charge of maintaining medical records at Mercy Iowa City is asking bankruptcy court to intervene in a dispute with the hospital and clinics.
The Cedar Rapids Gazette reports that Mercy IC believes any gap or abrupt termination of system operations provided by Altera Digital Health Incorporated would pose “significant” threat to Mercy and its patients.
Therefore, Mercy has notified Altera that it plans to exit their agreement but only after Altera first maintains services through Mercy’s transition to UI ownership and then for a yearlong “support term” through March 9, 2025.
But Altera, based in New York, is asking a bankruptcy judge to force Mercy to either assume or reject the current agreement between the two, which runs through March 2031.
According to the Gazette, if Mercy assumes the contract, Altera would continue its work and Mercy would stay in compliance with agreement terms by transferring all rights and obligations to the UI when it officially takes over Mercy.
But by rejecting the contract, Altera could stop its work with the hospital. Altera told the court it doesn’t object to Mercy assuming and assigning the agreement to UI but does object to Mercy’s, quote, “attempt to allow (the UI) to use the software without assumption and assignment of the agreement.”
Also in dispute is the “cure” amount, the money paid by Mercy to end the contract through bankruptcy. Mercy claims that amount is $8 million; Altera says they’re due at least $12 million plus damages.
Mercy has blamed Altera for using a “flawed system” for coding, billing and collecting for patient services that caused a precipitous loss of revenue in late 2022 and early 2023, severely affecting their financial liquidity.
The bankruptcy court has not indicated when a decision on the request would be made.