Software provider sues Naples-based HMA, alleges $4.5M owed

— Naples-based Health Management Associates owes more than $4.5 million to a Texas company for emergency room software that it is still using, according to a lawsuit filed in Collier Circuit Court.

The dispute with Medhost, headquartered in Addison, Texas, shouldn’t have gotten to the point of a lawsuit and HMA hopes it can be resolved outside of a courtroom, said Eric Waller, an HMA spokesman.

“This is merely a business contract dispute,” he said. “We remain optimistic we can resolve the dispute outside of litigation. At the end of the day, we remain confident the great patient care will remain uninterrupted.”

HMA signed a contract with Medhost for its emergency room software in May, 2011, according to the complaint filed in circuit court in late March. The contract and the amount of the contract wasn’t included in the complaint.

The terms enabled HMA to test the software at its Seven Rivers Regional Medical Center in Crystal River, near Tampa. From there, HMA was to notify Medhost of any shortcomings within five days of a 60-day trial period ending, according to the complaint.

Medhost is represented by Naples attorney Ed Cheffy.

The complaint said HMA didn’t submit a list of any problems and the software was installed at all of the company’s 58 hospitals.

HMA paid the first two installments to Medhost, the amounts of which aren’t disclosed in the complaint, but didn’t pay the third installment of $4.5 million. The third installment was due Sept. 30, 2012, the lawsuit states.

Medhost notified HMA of the contract breach on Feb. 4, 2013, and the hospital operator failed to make the payment, according to the complaint. HMA continues to use the software and submitted two additional orders to add it at 10 more hospitals. To date, the software has been installed at eight of the 10 hospitals.

Medhost also hopes the dispute, based on software support and maintenance, can be resolved outside of a courtroom, said Tom Mitchell, vice president of HealthTech Holdings, a Tennessee holding company for Medhost.

Filing the complaint was done as a last resort after ongoing conversations with HMA since last year.

“Medhost has never filed a lawsuit in this manner before,” he said. “From our perspective, we have met all the conditions of the contract.”

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