EMR Vendor Extortion for Renewal Fees

Posted on October 15, 2010 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 15 blogs containing almost 6000 articles with John having written over 3000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 13 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

A reader of EMR and HIPAA recently emailed me about the title of this post. The way they saw it, the software renewals fees for an existing EMR user amounted to EMR vendor extortion. This person felt like providers had little options when it came to the renewal fees that EMR vendors would charge them.

The fact of the matter is that it’s not actually extortion (from what I’ve seen), but it certainly can feel that way if you’re a provider that’s getting charge a train load of money to renew or update your license with your EMR vendor. Unfortunately, once you’re in that position you really don’t have many options. Plus, your options are always very specific to the contract you signed with the EMR vendor.

Instead of focusing on those who are stuck with little options, I think it’s more valuable to try and help those that are just signing and negotiating their contracts with an EHR vendor. This is such a crucial part of the EMR implementation process. Here are a couple paragraphs of the three pages on contract negotiation from my EMR selection e-Book:

Once you have made a final decision on an EMR vendor, it is time to start negotiating the contract with the vendor. It is interesting that doctors are use to negotiating contracts for purchases of large medical devices, but for some reason do not often negotiate the details of their EMR contract. The amount of negotiation room you have in a contract will depend on a number of factors. Generally the larger the EMR vendor the less negotiation room you have with the contract. Interestingly, the larger your organization the more negotiating power you will have as well. That is not to say that large EMR vendors and small doctors do not negotiate the contract. They are just less likely to negotiate or there is less room to negotiate.

There is always some room to negotiate with your EMR vendor. The vendor’s first proposal or contract is always their first offer. You should never take it since price and contract details can always be negotiated.

Many doctors find themselves handing their contract over to their lawyer to handle the negotiation. You will want a lawyer to look over it for final review. However, very few attorneys know much about negotiating tech software contracts. Lawyers usually bill by the hour and you do not want to be paying your lawyer by the hour to negotiate commas and periods that will have little meaning or value to your practice.

The contract negotiation with the EHR vendor is the key time when you make sure it’s very clearly stated the types of fees that you’ll have to renew the software. This should all be clearly stated in the contract and if it is not, then get it changed. As it says above, don’t leave it to an inexperienced lawyer who knows little about EMR software and the types of fees they’ll charge to understand these details. Experience is valuable at this stage of the process.

Another part of the contract should be the details of how you could get the data out of your EMR should you decide to ever move to a new EMR. Access to the database schema and clearly defined data ownership are two key parts of the contract that will be needed should you choose to move to a new EMR. There’s real value in an EMR vendor knowing that you can easily move to another EMR. For some reason, those EMR vendors don’t seem to charge the outrageous unexpected renewal fees.

Many EMR companies might baulk at the idea of providing a method for providers to switch EMR companies. That might be telling you something. Yes, I definitely come from the philosophy of “If you make it easy for people to leave, they’re more likely to stay with you.” Chew on that concept for a little while.

Either way, providers need to make sure they’re protected against the unknown future. That protection comes during the EMR selection process and contract negotiation phase.