1. Military

Company says James A. Haley VA hospital in Tampa refuses to pay for software

Published Sep. 2, 2012

TAMPA — Software developed by a Tampa company transformed pharmacy operations at the James A. Haley VA Medical Center starting in 2006, benefiting thousands of veterans.

The software improved pharmacist performance, reduced errors and led to veterans being released from the hospital faster, a Haley pharmacist wrote in a 2007 letter that was approved by the assistant pharmacy chief.

But the Department of Veterans Affairs hospital now refuses to pay the company, QueueVision Inc., for software that its nurses and pharmacists have been using daily since 2006, according to Michael Blom, a company partner.

Haley's director, Kathleen Fogarty, told the company that it had no contract with the hospital — which is true.

"As a purchase order does not exist, we are unable to process your request," she said in a Feb. 24 letter.

But Haley pharmacy officials nonetheless repeatedly assured QueueVision that the hospital, one of the VA's busiest, would buy the software and that payment with a purchase order, or PO, was being processed, QueueVision's owners said.

In fact, Haley pharmacy leaders indicated in emails to QueueVision that a PO was being processed and that Haley would pay the company for its work.

"The PO has been cut and priority assigned," Stephen Vose, Haley's assistant pharmacy chief, wrote in a Sept. 11, 2007, email to QueueVision's project manager.

Haley officials declined comment for this story, saying their attorneys were handling the matter.

Blom said QueueVision is owed $213,750, a modest fee that he said makes the refusal to pay all the more puzzling.

He said development costs for QueueVision, a small company which had a dozen employees while working for Haley, totaled more than $600,000. But Blom said the company discounted its Haley billing in hopes of gaining entry at other VA hospitals, a potentially lucrative market.

Blom said he thinks the VA played on his naivete, knowing he would go years without payment because he wanted to help veterans.

"We were suckers," said Blom, who said the refusal to pay has damaged a small business. "They took us. I figured the veterans were so happy, the staff was so happy, everybody loved it. So we thought they would pay. We never fathomed that they would lie to us."

Fogarty said in her February letter that Haley had "initiated the removal of the software." But Blom said he thinks Haley is still using it.

Fogarty also said Haley helped develop the software and that the hospital "reserves its right to pursue ownership interests."

Blom said the threat is enraging. QueueVision's end-user license, sent to Haley by QueueVision at the hospital's request, notes that by loading the software Haley acknowledged it is the company's intellectual property.

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Blom's company also holds the software's patent.

• • •

Blom, a longtime banking and health care consultant, formed QueueVision in 2004 with partner Joseph Minichini to sell the software, PatientEase, to hospitals around the nation.

The software is billed as a patient management system. At Haley, nurses could check a computer to track a prescription. Patients were no longer confined to cramped waiting rooms and could see a prescription's status on large screens around the hospital.

The Haley pharmacy had long been a bottleneck before 2006. Nurses had to call or walk to the pharmacy to get information on prescriptions patients needed before they could be discharged. Patients facing long waits often got angry. Pharmacists found it hard to do their job with the constant ringing of phones.

"Within two weeks, we have seen an almost complete elimination of phone calls coming from the nurses," pharmacist Maria Castellanos wrote in a March 7, 2007, memo approved by Vose, the assistant pharmacy chief. "This has dramatically reduced the stress in our department and we find that our performance ... has improved. I have heard from the nurses that their stress has dropped.

"They no longer need to spend as much time on the phone trying to find out a prescription status or having to come down to the pharmacy. ... They say that their performance has improved as well."

A pilot program successfully ended in early 2007. "I want to buy it," Vose said at a meeting between the VA and QueueVision, meeting minutes show.

Then, on Sept. 10, 2007, Vose said in an email to David Loban, QueueVision project manager, that the pharmacy director has the "2237," an apparent reference to a VA request form for supplies and services.

The next day, Vose emailed Loban: "The PO has been cut and priority assigned. I would think the priority would be high. If I find out what it is, I will tell you. We do have millions to spend."

After the close of the VA's fiscal year every Sept. 30, a facility is often left with unspent money, hence Vose's reference to "millions to spend," said Blom.

A few days later, Loban sent an email to Vose asking if it would help speed matters if he provided more information on the software.

He was told to hold off. Vose said in an email: "It was explained to the (pharmacy) director. I will check on the PO."

But Blom said the company was given a series of excuses about delayed payment, usually that QueueVision would have to wait until the next fiscal year because the year-end budget was too tight.

QueueVision had only sold PatientEase to one other hospital by 2007. Blom said he didn't push Haley too hard for payment, not wanting to jeopardize a potentially profitable relationship.

"We thought they were good for it," Blom said.

In 2009 the Haley pharmacy moved, and Haley asked Blom's company to help install the software in the new building, said Blom.

Emails show Haley and QueueVision communicating about minor software issues through the end of 2010. Then on Feb. 22, 2011, Vose asked Loban: "Get paid yet? I was told (pharmacy chief Mike) McCormick told your boss how to get paid."

Attorney Amy Galloway, representing QueueVision, said in a June 29 letter to the VA that the refusal to pay was "shocking." She said business required "good faith and fair dealing."

"That obligation," Galloway said, "is the minimum owed when an American company engages in business with its own government, here providing a service that was ... encouraged and repeatedly praised as surpassing all expectations."

William R. Levesque can be reached at or (813) 226-3432.


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