Medfusion has terminated its partnership with medical software company Allscripts over a payment dispute, putting a major chunk of the Cary company’s business in play.
But Medfusion CEO Steve Malik said the company is confident that, by making an irresistible offer, it can sign up as customers the bulk of the 30,000 doctors who up to now have been using the Allscripts Patient Portal Powered by Medfusion.
“We actually see it as a great opportunity,” Malik said in an interview Monday. “There is a bounce in our step over the opportunity to directly work with these providers.”
Medfusion, a privately held company with more than 120 employees, announced Monday that it has pulled the plug on its relationship with Allscripts, a publicly traded medical software company that is based in Chicago. Allscripts has 7,000 employees worldwide, including more than 1,600 in Raleigh.
Medfusion cited “unresolved payment disputes” with Allscripts as the reason for its move. Malik declined to elaborate except to say: “We have tried to resolve a payment dispute with them for quite some time.”
Allscripts declined to comment on the situation.
“Allscripts does not as a matter of policy, speak publicly to specific terms of contractual relationships with its vendors,” spokeswoman Concetta DiFranco said in an email.
Under Medfusion’s partnership with Allscripts, approximately 30,000 physicians who use Allscripts’ medical software also use Medfusion’s patient portal technology. Allscripts also provides its own patient portal called FollowMyHealth.
Medfusion’s patient portal technology enables patients to make appointments, pay their bills, request prescription refills, complete medical forms, review lab results and perform other tasks over the Internet. It also enables doctors to share medical charts with patients, a requirement of the federal government’s “meaningful use” program that provides financial incentives to doctors that use electronic health records.
Medfusion isn’t pulling the plug on those physicians, however. Instead, it will provide them with free portal service through the end of May while it tries to sign them up as customers.
“We think it is important for them to have no interruption of service,” Malik said. “We want to let people continue to use what they have been using.”
Altogether, Medfusion portal technology is used by more than 65,000 physicians who serve more than 9 million patients. So the 30,000 doctors who were indirectly Medfusion customers via Allscripts represents a crucial portion of Medfusion’s business.
Malik said Medfusion will charge physicians less than what they were previously paying if they’re willing to make a longer-term commitment than month-to-month, while at the same time offering more services. The latter includes allowing patients to connect to the portal through mobile devices, something the vast majority haven’t been able to do up to now.
“That’s what patients want to use today,” Malik said. “That’s where they are.”
Also working in Medfusion’s favor, Malik said, is that busy doctors aren’t really interested in devoting staff time to training on a new patient portal system and then getting patients to sign up for a new system.
“We have a customer support center set up to make it easy for them” to become Medfusion customers, he said.
Malik said he expects that Medfusion’s revenue ultimately “will likely increase” because it won’t have to share revenue from the doctors with Allscripts.
In 2010, Malik sold Medfusion to Intuit for $91 million. In August he bought the company back for an undisclosed sum.
Malik said he has been pleased with the company’s performance since he took over as owner and that revenue is on track to rise 25 percent this year. The company also has added 30 employees within the last 90 days.