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Medfusion files breach of contract suit in commercial dispute

The dispute between Medfusion and Allscripts now includes a breach of contract lawsuit. According to reports, Medfusion and Allscripts entered into an agreement in 2009, in which the Allscripts software and Medfusion's patient-physician communication technology were to come together in a new online patient portal geared toward health care providers.

Three years after the agreement, however, Allscripts bought Jardogs, one of Medfusion's competitiors. According to the breach of contract suit, Allscripts went public with the acquisition at a health care informational technology trade show in 2012, giving Jardogs' portal, FollowMyHealth, "significant publicity." Medfusion alleges that Allscripts told the media that it would be using FollowMyHealth across all of Allscripts' products, even though there was still 18 months left on the contract with Medfusion. Medfusion claims that there was a backlog caused by Allscripts that resulted in "negative financial consequences" for the company.

The suit claims that the billing issues with Allscripts continued to increase, and in April of this year, Medfusion terminated the contract two months before it was to expire and claims that Allscripts owes the company $5.46 million. Allscripts has reportedly paid Medfusion almost $1 million of the amount but is disputing the remaining $4.5 million. A spokesperson for the company refused to comment. Medfusion's chief executive officer told reporters that the company plans to seek damages in the claim.

When companies enter into an agreement that involves the publicity or promotion of a service, both parties must be aware of any kind of noncompetition clause. Commercial disputes in Maryland and other states are often complicated, but if the terms of the contractual agreement are not upheld, a breach of contract claim may be able to filed.

Source: Triangle Business Journal, "Medfusion sues Allscripts for breach of contract" Lauren K. Ohnesorge, May. 15, 2014

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