DoD: Price tag for new electronic health record might grow by $1.2 billion

The Defense Department is modifying its multibillion dollar contract for a new electronic health record to allow for up to $1.2 billion in additional costs over the next five years, saying the changes are necessary in order to harmonize its new EHR with the one the Department of Veterans Affairs has just agreed to buy.

A justification and approval document published Tuesday raises the total contract ceiling for the system, known as MHS Genesis, to $5.5 billion, a 27 percent increase over the initial award DoD made in July of 2015 to Leidos and its lead subcontractor, Cerner.

Although VA’s decision this spring to buy its own $10 billion Cerner EHR was based largely on the goal of getting the departments to use the same system, VA’s sole-source contract included technical features that weren’t incorporated into DoD’s original agreement, said Stacy Cummings, the program executive officer for Defense Health Management Systems.

“We want to have a common solution, and there were some things that the contract didn’t allow us to be able to adopt and sustain,” she told reporters on a conference call. “So the benefit that we’re getting is that as the VA configures a solution, we will not have to pay to do that work because the VA will. But we will need to be able to maintain that solution and have it hosted.”

Defense officials said they estimated the contract modification would increase the new EHR’s capabilities by roughly 30 percent. The change also accounts for the Coast Guard’s recent decision to adopt MHS Genesis, although its needs aren’t expected to have a major impact on the project’s overall cost, since it operates just 30 small outpatient clinics.

Matthew Hudson, the contracting officer for the Genesis project, said it’s possible that DoD will not spend all of the funds allowed for in Tuesday’s ceiling increase.

“We’ve taken a pretty cautious approach because we don’t want to have to take a second bite at the apple with another J&A,” he said. “I think it’s important to remember that this is only the first step of the laundry list in getting us to a common baseline, and the amount you see in the J&A is what we view as the worst case. We may or may not ever get to even a significant portion of that, and we’ll work through that over time.”

System installation

Also on Tuesday, Defense officials said they had selected the next bases where Genesis will be installed. They include three California sites: Travis Air Force Base, Naval Air Station Lemoore and the Army health clinic at the Monterey presidio, along with Mountain Home Air Force Base in Idaho.

That rollout — what DoD refers to as “wave one” — will incorporate lessons learned at the first four bases in the state of Washington where the department first deployed Genesis.

Based on a review of three of those sites in late 2017, DoD’s independent office of operational test and evaluation determined in May that Genesis was “neither operationally effective nor operationally suitable.”

But Cummings asserted that things have improved significantly since that review, when OT&E found that it took users anywhere from three minutes to 20 minutes to successfully login to the system. Login times are now down to an average of 40 seconds, she said.

“During the stabilization and adoption period, we upgraded the system and we were able to streamline and really look at our end to end processes,” Cummings said. “40 seconds is not necessarily where we want to be in the long run, but it’s a significant improvement. And we continue to balance things that DoD requires, like cybersecurity, and the types of logins that we do on the Defense side that might be a little different than they do in a commercial environment. And we continue to balance that access versus speed to make sure that we are absolutely protecting our beneficiaries’ personal health data.”

The department says it remains on track to eventually deploy Genesis to all 431 of its hospitals and clinics by 2022, but has not yet set a date for when it will start installations at the newly-announced California and Idaho sites.

One provision of the House-Senate agreement on the 2019 Defense authorization bill, also released Tuesday, would prohibit DoD from deploying Genesis to any more military treatment facilities until it delivers a detailed report on how it’s fixed the problems OT&E identified in its May report.

Defense officials said the schedule was also dependent on “pacing items” coming out of the lessons it learned at the first four Pacific Northwest deployments, including the need to do more modernization of the military health system’s IT networks prior to Genesis installations.

“We are a large government organization undertaking a critical strategic project,” said Vice Adm. Raquel Bono, the director of the Defense Health Agency. “An effort this big merits the attention and the scrutiny it is receiving, since it affects over 30 million Americans and directly impacts our readiness mission. Feedback from our frontline users is most important, but input from Congress, the media and our patients are both to be expected and welcomed. It’s how we plan to get better.”