VA renews EHR contract, sets higher penalties for performance metrics missed by vendor

The Department of Veterans Affairs is renewing its multibillion-dollar contract for a new Electronic Health Record, with new terms meant to hold the vendor accountable for persistent outages.

The VA announced Tuesday that it reached an agreement on a renegotiated contract with EHR contractor Oracle-Cerner.

Tuesday marked the deadline for VA and Oracle-Cerner to renew the five-year base period contract signed in 2018.

The VA announced last month it is indefinitely putting all future deployments of the Oracle-Cerner EHR on hold, until it addresses problems at the five VA sites already using the system.

The VA has obligated about $9.4 billion on the EHR modernization program since fiscal 2018.

The renegotiated contract includes larger fines Oracle Cerner will need to pay VA, if the EHR doesn’t meet performance targets.

Instead of renewing EHR contract for another five years, as the original contract outlined, the VA renegotiated with Oracle-Cerner to extend the contract for five one-year terms.

Neil Evans, acting program executive director of VA’sEHR Modernization Integration Office, said that change gives VA the opportunity “to review our progress and renegotiate again in a year if need be.”

“Ultimately, we believe that this new contract gives VA the tools we need to hold Oracle Cerner accountable to deliver an EHR that will meaningfully improve Veterans’ health outcomes and benefits,” Evans said. “The system has not delivered for Veterans or VA clinicians to date, but we are stopping at nothing to get this right.”

The new contract includes 28 performance metrics for Oracle-Cerner to meet or exceed, and includes a higher standard for reliability and uptime.

Those standards include minimizing outages, or periods when the EHR completely crashes — as well as moments when one EHR component isn’t working or when the EHR is operating slowly.

The VA experienced a systemwide outage of the Oracle-Cerner EHR for 224 minutes on April 25. The outage also impacted the Defense Department and Coast Guard, which are much further ahead with the deployment of the system.

The Oracle-Cerner EHR also experienced a five-hour outage across the VA, DoD and Coast Guard on April 17. The outage stemmed from a significant upgrade added to the EHR over the weekend, meant to improve database capability and failover capability.

Oracle-Cerner so far has refunded VA about $325,000 of the $4.4 billion paid through the contract so far. Those payments are meant to compensate VA for EHR system crashes.

If the new contract terms had been in place since the original contract was signed in 2018, the VA said it would have recovered 30 times as much money back from Oracle-Cerner for EHR system outages.

Mike Sicilia, executive vice president of Oracle Global Industries said the new agreement “reflects Oracle’s commitment to veterans’ health care as well as complete confidence in our technology and our partnership with the VA to deliver an EHR that far exceeds the expectations of users.”

The new contract also set a higher bar for the vendor to resolve help tickets and VA clinician requests with the system.

The VA said the new contract additionally includes language to ensure the VA can quickly access patient health records from private-sector hospitals, when needed.

The VA said the new contract takes steps to ensure the new EHR is interoperable with its website, mobile app and other critical applications related to veteran health care.

VA Secretary Denis McDonough told House appropriators in March that the Oracle-Cerner EHR rollout to date has been “no question a disservice” to veterans.

“Obviously, inherent in the idea that there’s a five-year review is that you’re not just reviewing it to continue it,” McDonough told members of the House Appropriations Committee’s subcommittee on military construction, VA and related agencies on March 29, when asked about the possibility of the agency switching vendors. “We’d be in a position to sustain what we have, and then see if there’s another technology.”

But House and Senate lawmakers say a renegotiated contract is only the start of what the VA needs to do to get the troubled Oracle-Cerner EHR contract back on track.

Senate VA Committee Chairman Jon Tester (D-Mont.) said the committee will “keep holding VA and Oracle Cerner’s feet to the fire in implementing these changes,” and called on Congress to pass his bill setting a higher bar for the VA to resume its EHR rollout.

“I’ve said from day one that the EHRM system has to deliver for veterans, VA medical professionals and the American taxpayer — and this new contract is a step in that direction,” Tester said. “But this is just the start of what’s needed to get this program working in a way deserving of our veterans and taxpayers.”

Top Democrats and Republicans on the House VA Committee are backing Tester’s EHR Program RESET Act.

The bill would prevent the VA from proceeding with EHR go-lives at additional facilities, until performance data from the five current sites already using the system shows improvement.

House VA Committee Chairman Mike Bost (R-Ill.) and Technology Modernization Subcommittee Chairman Matt Rosendale (R-Mont.) said their biggest questions about how a new contract will change VA’s EHR rollout “remain unanswered.”

“We need to see how the division of labor between Oracle, VA and other companies is going to change and translate into better outcomes for veterans and savings for taxpayers,” Bost and Rosendale said. “This shorter-term contract is an encouraging first step, but veterans and taxpayers need more than a wink and a nod that the project will improve.”

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