Shulkin departure leaves VA contract with Cerner up in the air

The agency had been negotiating $10 billion sole-source award to vendor replacing its legacy EHR system.

____simple_html_dom__voku__html_wrapper____>After weeks of speculation, President Donald Trump on Wednesday fired Veterans Affairs Secretary David Shulkin, MD, while announcing that he plans to replace him with his presidential physician, Rear Admiral Ronny Jackson.

The ouster of Shulkin comes as the VA is finalizing its negotiations with Cerner to award the vendor a $10 billion EHR modernization contract—effectively leaving the acquisition in limbo.

Trump announced Shulkin’s firing on Twitter and his decision to tap Jackson to lead the agency, which runs one of the country’s largest integrated healthcare delivery systems.

“I am pleased to announce that I intend to nominate highly respected Admiral Ronny L. Jackson, MD, as the new Secretary of Veterans Affairs,” wrote the President. “In the interim, Hon. Robert Wilkie of DOD will serve as Acting Secretary. I am thankful for Dr. David Shulkin’s service to our country and to our GREAT VETERANS!”

Shulkin had served as head of the VA since February 2017, when the U.S. Senate unanimously confirmed him. However, his tenure had been clouded recently by controversy stemming from a trip he took to Europe last year—that included his wife—and was the subject of an Office of Inspector General report last month.

In addition, an OIG report released earlier this month found gross mismanagement in at least three VA program offices directly under Shulkin’s watch when he served as undersecretary of health in the Obama administration in 2015 and 2016.

While Shulkin had recently come under fire, he was universally applauded when it came to efforts to modernize the agency’s IT infrastructure, which was a top priority under his leadership.

Shulkin made the decision in June 2017 to award a sole-source contract to Cerner to replace the legacy Veterans Health Information Systems and Technology Architecture with a single common EHR system with the Department of Defense based on Cerner’s Millennium platform. His decision to follow the lead of DoD and acquire a commercial off-the-shelf EHR from Cerner got high marks at the time from health IT groups.

The Cerner EHR that the VA plans to implement over 10 years will cost a total of $15.8 billion, according to the latest agency data provided to Congress. The VA’s 10-year cost estimate for the entire EHR modernization program includes $10 billion for the Cerner contract (which has yet to be signed), $4.6 billion for infrastructure improvements, as well as $1.2 billion for contractor program management support services.

Also See: Price tag for new VA EHR now totals nearly $16B

Negotiations between the VA and Cerner to finalize the EHR contract have been going on for nearly a year due to a series of delays. But, the agency has yet to announce the completion of the deal.

This past December, Shulkin ordered a “strategic pause” in the agency’s negotiations with Cerner—as part of the EHR acquisition process—to have the MITRE Corporation conduct an external assessment of the VA’s interoperability requirements. He told Congress earlier this month that as part of its interoperability assessment, MITRE provided the VA with 51 recommendations, and that the agency was building these into the contract with Cerner.

“The Department of Veterans Affairs is in active procurement negotiations for a commercial-off-the-shelf electronic health record system,” said the agency in a written statement. “VA typically does not comment on ongoing contract negotiations.”

However, Shulkin’s abrupt departure from the VA introduces an element of uncertainty into ongoing contract negotiations with Cerner, given his hands-on approach to the EHR modernization program.

Rear Admiral Jackson, an active duty Navy physician who was appointed as physician to the president by President Obama in 2013 and has served on the White House medical team since 2006, is an unknown commodity when it comes to taking the helm at the VA and his policy direction.

AMVETS, the congressionally-chartered veterans service organization, expressed its deep concerns regarding President Trump’s firing of Shulkin and questioned whether the sudden change in leadership at the VA threatens ongoing reforms.

“I am deeply concerned about the nominee,” said AMVETS Executive Director Joe Chenelly in a written statement. “Veterans’ lives depend on this decision, and the Trump administration needs to substantiate that this active-duty Navy officer is qualified to run a $200 billion bureaucracy, the second largest agency in the government.”

In particular, Chenelly questioned whether it is appropriate for an active duty military officer to run a federal agency like the VA, while noting that Jackson’s official biography does not seem to contain any indication that he’s held a command and therefore may not be fully prepared to lead such a massive bureaucracy.

“After more than a full year of progress, the VA still faces large and complex challenges that require continuity of experience and capable leadership,” Chenelly added. “It’s unclear at this point whether President Trump’s nominee would provide the VA either of those things. And any lack of clarity at the VA about its direction and leadership stymies the hard-fought progress that’s been made so far.”

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