VA finally pulls trigger and awards Cerner $10B EHR contract

The agreement culminates a year of negotiations between the agency and the health IT vendor.

After nearly a year of negotiations with Cerner, the Department of Veterans Affairs on Thursday awarded the vendor a $10 billion electronic health record modernization contract to replace the VA’s decades-old legacy EHR system.

“I am pleased to announce we have signed a contract with Cerner that will modernize the VA’s healthcare IT system and help provide seamless care to veterans as they transition from military service to veteran status, and when they choose to use community care,” said Robert Wilkie, the VA acting secretary. “This is one of the largest IT contracts in the federal government, with a ceiling of $10 billion over 10 years. And with a contract of that size, you can understand why former Secretary Shulkin and I took some extra time to do our due diligence and make sure the contract does what the President wanted.”

In June 2017, then-VA Secretary David Shulkin announced his decision 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. However, President Trump’s recent firing of Shulkin and the resignation of the VA’s acting chief information officer Scott Blackburn cast doubt on the agency’s EHR efforts.

“With this contract, VA will adopt the same EHR platform as the Department of Defense,” added Wilkie. “Patient data will be seamlessly shared between VA, DoD, and community providers through a secure system. Health information will be much easier to share, and healthcare will be much easier to coordinate and deliver, as well as faster and safer.”

The agency had been under enormous pressure from Congress to make the award to Cerner. The VA’s announcement about the deal comes just two days after members of the U.S. Senate and House of Representatives sent a letter to Deputy Secretary Thomas Bowman accusing the VA of “malign neglect” regarding its delayed EHR modernization efforts.

Also See: Lawmakers accuse VA of ‘malign neglect’ regarding EHR modernization efforts

“The Department of Veterans Affairs (has) announced an agreement with Cerner Government Services, a wholly owned subsidiary of Cerner Corporation, a global leader in healthcare technology, for the VA to use off-the-shelf Cerner solutions to provide veterans, transitioning service members and their care providers access to their medical history through a single electronic health record system,” said the company in a written statement. “Using technology that has been deployed successfully at Department of Defense medical facilities and thousands of provider sites globally, Cerner plans to provide seamless care across the VA’s high-performing integrated network, including VA facilities, community providers and DoD facilities.”

According to Wilkie, the two agencies are “collaborating closely to ensure lessons learned at DoD sites will be implemented in future deployments at DoD as well as VA.”

The award is welcomed news for Cerner. Earlier this month, the vendor reported results for the 2018 first quarter that ended March 31, with revenue below expected levels, which the company blamed in part on the delay of the VA’s EHR contract.

“We’re honored to have the opportunity to improve the health care experience for our nation’s veterans. The VA has a long history of pioneering health care technology innovation, and we look forward to helping deliver high-quality outcomes across the continuum of care,” said Cerner President Zane Burke. “My thanks to the administration for selecting Cerner to collaborate in creating seamless care as service members transition from active duty to VA medical centers and community providers. We expect this program to be a positive catalyst for interoperability across the public and private health care sectors, and we look forward to moving quickly with organizations across the industry to deliver on the promise of this mission.”

Late last year, the VA submitted a formal request to congressional appropriators to reprogram $782 million of fiscal year 2018 funding to kick start its planned procurement of the Cerner EHR. The VA’s Fiscal Year 2019 budget request includes $1.2 billion for the EHR modernization. According to the latest data provided to Congress, it will cost the agency a total of $15.8 billion over 10 years to implement the system—including $10 billion for the Cerner contract.

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