CHICAGO – An Internal Revenue Service ruling in May that encouraged not-for-profit hospitals to provide healthcare information technology to medical staff physicians is paying off for Allscripts, a Chicago-based vendor of clinical software solutions for physicians.
Since the IRS ruled that it would not consider donations of IT and supporting services as kickbacks that would jeopardize healthcare providers’ non-profit status, Allscripts has lined up several new contracts, helping to reverse what had been a slower-then-expected business quarter.
“Some of the hospitals were holding back” until the IRS ruling, said Allscripts CEO Glen Tullman. “That seems to have opened the floodgates.”
In recent weeks, Allscripts has secured contracts with the Butler Health Systems in Butler, Pa., which is deploying the TouchWorks Electronic Health Record to 60 physicians and plans to offer it to another 65; the Frankford Health Care System in Philadelphia, which is deploying TouchWorks to 100 employed and independent physicians; Saint Francis Hospital in Hartford, Conn., which is deploying TouchWorks to 650 physicians; Northwest Hospital in Seattle, which is deploying TourchWorks to 50 physicians and plans to offer the solution to another 250 over the next few years; and the Blessing Health System of Quincy, Ill., which is deploying TouchWorks to more than 60 employed and independent physicians.
“By offering both affiliated and non-affiliated physicians the Allscripts electronic health record and practice management solutions, we can provide a seamless connection to critical patient information along the entire continuum of care,” said Jerry Jackson, president and CEO of Blessing Physician Services, in a press release.
According to Tullman, the IRS memo clarifying the Stark anti-kickback law should spur physicians to seek ambulatory EHR systems through their hospitals. Prior to that ruling, physicians had struggled to acquire the technology training and the funding for EHRs.
“This clearly represents another funding source,” he said.
Allscripts had reported in early August that its profit had more than doubled during the second quarter, rising to $6 million, or 10 cents per share, while revenue grew 17 percent to $70 million. That wasn’t enough for investors, who had predicted that the company would earn 14 cents per share during the quarter on $73.4 million in revenue, and the company’s stock slipped to $23.14 per share on August 8.
However, analysts also pointed out that the company had reported $54 million in bookings for the third quarter, above estimates of $50 million or below, and the company’s stock has since risen back up above $24 as of August 20.
Allscripts also secured a contract with Novant Health of Winston-Salem, N.C., which is deploying the company’s practice management solution to some 794 physicians across 232 locations in North and South Carolina. This agreement follows an earlier contract in which Novant deployed Allscripts’ EHR.
“It’s in our best interest to have a single, integrated workflow between the clinical and administrative sides of our medical group and clinics,” said A.J. Patefield, MD, executive vice president of Novant and physician sponsor of the EHR.