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VA renegotiates health record modernization contract

Agency aims to make its health care systems contractor, Oracle Cerner, more accountable

Sen. Jon Tester, chairman of the Senate Veterans’ Affairs Committee, calls the new agreement “a step in the right direction.”
Sen. Jon Tester, chairman of the Senate Veterans’ Affairs Committee, calls the new agreement “a step in the right direction.” (Tom Williams/CQ Roll Call file photo)

The fraught effort by the Department of Veterans Affairs to modernize its electronic health care record system will now be governed by a modified contract that the agency pledged will boost accountability over a process that has drawn concern from lawmakers. 

According to an overview of the updated agreement shared by a congressional aide Tuesday, the renegotiated arrangement has built in a series of performance metrics to ensure contractor Oracle Cerner is incentivized to log improvements in areas ranging from minimizing system crashes to enabling interoperability with the system and other platforms. 

The overview, which the aide said was provided by the VA earlier on Tuesday, states the new contract contains larger fines that Oracle Cerner will have to pay if executives aren’t able to meet expectations laid out in the framework. 

The original contract, signed in 2018, included a five-year base period and five-year extension option. However, the overview noted that under the updated parameters, that five-year extension has been tweaked to five one-year terms, allowing 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,” the overview states. “The system has not delivered for Veterans or VA clinicians to date, but we are stopping at nothing to get this right — and we will deliver the efficient, well-functioning system that Veterans and clinicians deserve.” 

Officials from the VA didn’t immediately return a request for comment, but Mike Sicilia, executive vice president at Oracle Global Industries, said in a statement that the deal “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 news comes after VA leaders last month announced a “program reset” tied to the electronic health record platform, indefinitely halting the deployment of updated software at new sites beyond the five locations where it’s already been installed.

That phase follows the VA’s prior so-called assess and address period, under which future system deployments were set to be delayed until June. The overview document linked the lessons learned from that period to the contract’s “new accountability measures” as officials work to boost system reliability and performance under the reset. 

Senate Veterans’ Affairs Chairman Jon Tester, D-Mont., called the new contract “a step in the right direction.” 

“But this is just the start of what’s needed to get this program working in a way deserving of our veterans and taxpayers,” he continued. 

Tester was among the lawmakers from both parties who praised the VA’s April decision to undertake a program reset, saying at the time it was indicative of the agency’s seriousness toward “getting this program working for the veterans it serves.”

In recent months, members of Congress have championed a host of bills seeking to overhaul the electronic health record modernization. That includes Tester’s own bill, introduced in March, and House companion legislation from Veterans’ Affairs Chairman Mike Bost, R-Ill., and ranking member Mark Takano, D-Calif., which followed in April. 

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