VA signs long-awaited contract with Cerner for new electronic health record

Almost one year after the initial announcement, the Veterans Affairs Department has signed a contract with Cerner Corporation for a new electronic health record.

The contract has a ceiling of $10 billion over 10 years. Acting VA Secretary Robert Wilkie described the contract as “one of the largest IT contracts in the federal government.”

Under the contract, VA will abandon its own, existing Veterans Information Systems and Technology Architecture (VistA) and implement the same EHR system that the Defense Department is deploying. All patient data will reside in one common Cerner Millennium system.

“With a contract of that size, you can understand why former Secretary [David] Shulkin and I took some extra time to do our due diligence and make sure the contract does what the president wanted,” Wilkie said Thursday in a statement.

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The announcement had been long-awaited by members in both the veterans and the federal IT communities, who had feared that recent, high-profile departures within VA had put the decision to move forward with Cerner in jeopardy.

“This transition should be done right, not fast, and I’m pleased the department took extra time to review the contract before moving forward,” House Veterans Affairs Committee Chairman Phil Roe (R-Tenn.) said in a statement. “Oversight of implementation and spending will be critical as this process continues. I spoke to acting Secretary Wilkie today, and I’m encouraged by our conversation.”

Former Secretary Shulkin had originally suggested VA would sign the Cerner contract last fall. Those plans stalled, after he paused contract negotiations to further define interoperability standards for the system.

Members of Congress had grown skeptical of the project’s status in recent weeks and months, with Shulkin’s departure and acting Chief Information Officer Scott Blackburn’s resignation.

DoD’s own setbacks in deploying MHS Genesis had also prompted some consternation among those watching the deal. The Pentagon’s first round of formal testing on the military’s new electronic health record has concluded that the $4.3 billion system is “neither operationally effective nor operationally suitable.”

DoD has deployed the system to four sites in the Pacific Northwest. The Pentagon said last week it doesn’t expect the unfavorable testing results to impact the schedule for Genesis deployments.

Members of Congress will be watching further DoD deployments carefully, as VA is counting on the Pentagon’s experience to inform its own deployments of the new electronic health record.

“Both my staff and I have taken oversight trips to the MHS Genesis initial implementation sites in Washington state to check in on DoD’s progress and to ensure VA will learn from the problems that have arisen during DoD’s transition,” Roe said. “We will continue this rigorous oversight as site assessments and in-depth planning begin.”

VA is also watching that schedule closely, because it has said it intends to follow DoD’s same deployment plan  for the new EHR.

VA has $782 million in funding for the remainder of this fiscal year to begin modernization efforts in 2018, though VA has been upgrading its infrastructure to prepare for the new health record all along.

The department also wants to create a separate $1.2 billion fund in its budget specifically for the EHR modernization project.

“As a member of a military family, serving our veterans is personal for me and is at the core of Cerner as a company,” Cerner CEO Brent Shafer wrote in a blog post Thursday afternoon. “We are honored to work with the VA on this important program, and we call on all our industry partners to join with us as we work to improve health care.”