Lawsuit: Area Healthcare Provider Stiffed Fresno Company for $1.5 Million
A Fresno company that provides electronic medical record services says it’s owed more than $1.5 million by local healthcare provider Santé Health Systems and several of its affiliated entities.
The Physician Network Advantage Inc. filed a civil suit last month alleging breach of contract against Santé, Community Foundation Medical Group, and Santé Health Systems CEO Scott Wells. The suit also alleges fraud in connection with the unpaid bills.
PNA is seeking compensatory as well as punitive damages and has requested a jury trial.
The company’s attorney, Ian Wieland, declined to comment on the suit other than to say that “PNA is a local company that provides e-health services for providers in Fresno County.”
The lawsuit includes nine separate complaints: breach of written and oral contract; breach of implied covenant of good faith and fair dealing; fraud — concealment of material facts, intentional misrepresentations, and promises made without intent to perform; restitution for unjust enrichment; common count: goods and services rendered; and accounting.
According to the lawsuit, PNA had signed a contract with Santé to install and provide support services for the Epic Electronic Medical Record system, or EMR, for health care providers. The system allows patient records to be shared to improve patient care and health care practice work flows while maintaining patient privacy.
Contract Signed in 2013
The lawsuit alleges that PNA and Santé Health Foundation signed a contract in 2013 to provide the EMR system to Santé physician practice groups. Federal tax records report that Wells is the foundation’s principal officer.
The lawsuit says the foundation was responsible for seeking grant funding from Community Medical Centers to pay for a portion of the EMR installation and support services, with the remainder coming from the Santé physicians group. Santé Health Systems handled the invoices.
PNA alleges that Community Medical Centers stopped providing grant funding to the foundation because it was out of compliance, but PNA was assured that steps would be taken to restore the foundation to compliance and urged by Santé to continue providing support services for the Epic system.
In addition, the lawsuit alleges the physician groups were responsible for paying a portion of PNA’s contract to provide support support services, but that money was not forwarded by Santé to PNA.
Instead, the lawsuit alleges that the foundation, Santé Health Systems, and Wells “intended to profit personally or through their entities from the payments to Defendant SHS from the Santé Physician Practice Groups and other reasons.”
The amount owed so far totals $1,550,660, the lawsuit contends.
Response from Santé
Kelly Lilles, a spokesperson for Santé, released the following statement Friday: “Santé, a local, physician owned and governed organization, works in good faith to advance the health and wellbeing of nearly half a million Central Valley patients. We operate with professionalism and integrity in everything we do, for the benefit of our patients, valued partners and physicians.
“Last week, a lawsuit filed by Physician Network Advantage (PNA), an entity controlled by Community Health System, put forth a number of unfounded allegations against our organizations that are without basis in either fact or law. Under the terms of our agreement with PNA, Santé was only liable for payment if and when we received the grant funding required to cover PNA’s services from Community Health System. PNA is well aware of this condition and was fully informed by their parent organization Community Health System that the funding would cease on or around September 1, 2020. PNA and Community Health System opted to continue services knowing that they would not be entitled to compensation under the terms of the contract. Obviously, PNA assumed its parent company, Community Health System, would reimburse them for the services provided.
“We are confident the facts affirm our honesty, credibility, and dedication to our patients and local community. In the meantime, we remain focused on improving the quality of care and accessibility of health services in the Central Valley.”
Santé and Wells are defendants in a lawsuit filed in September by Community Medical Centers over the emergency room physician strike last year that jeopardized Community Regional Medical Center’s status as a Level 1 Trauma Center.
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