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Budget Slates $1B for VA-Cerner Deal as Uncertainty Mounts


Nearly 9 months after it was announced, the deal has not been finalized. Some lawmakers are expressing frustration.

VA Secretary David Shulkin testifies before Senate Committee on Veterans' Affairs on September 27, 2017. Photo courtesy of the VA. Image has been cropped for size.

The Trump era has been feast or famine for health information technology (IT) advocates. Administration officials have held interoperability summits, while budget proposals have suggested cuts to agencies that run interoperability programs. Telehealth legislation has gained a foothold for Medicare and Medicaid recipients, though the scope of those 2 programs has turned into an even larger political football than it was a few years ago.

The Department of Veterans Affairs (VA) serves as a microcosm of the current health IT confusion. Though it has scored telehealth wins, its electronic health records (EHR) modernization efforts are an ongoing area of confusion.

When Trump’s appointee to head the VA, David Shulkin, took office, he quickly announced that the department would move its EHR to Cerner’s platform to achieve interoperability with the Department of Defense (DoD), which had linked with the vendor earlier.

The administration’s full 2019 budget proposal—recently released in its full 1,300 page form—would increase funding for the VA by more than $8 billion over the 2017 budget. It shrinks the agency’s IT budget by $300 million, but apportions more than $1.2 billion for the Cerner project.

“The Veterans Electronic Health Care Record appropriation funds necessary expenses related to the development and deployment of a new veterans electronic health record (EHR) system,” the budget states. “This new EHR will allow VA to move toward a single common health record that has full interoperability between DoD and VA, as well as community providers.”

Of the appropriated money, $675 million would be earmarked for the EHR contract, $120 would go toward project management, and $412 would be for infrastructure. From the VA Office of Information and Technology’s reduced budget, hundreds of millions of dollars would be devoted to maintaining its legacy VistA system until the Cerner system was ready.

The deal with Cerner, however, still is not finalized. In a hearing before the Senate Committee on Veterans Affairs last month, Shulkin insisted that it was still on course and that the pause in progress was “strategic,” though the MITRE Corporation had been enlisted to compile a report on the agency’s needs

In an appearance at the beginning of 2018, Shulkin described an uneasy meeting with Cerner officials: “To say it wasn't a good meeting would be an understatement.” The tension stems from disagreements about the meaning of interoperability—the fundamental concept that the deal was meant to address.

Lawmakers have continued to express concern and frustration over the project—and the VA’s broader ability to complete IT initiatives on time and within budget. In response to a Government Accountability Office (GAO) report showing that the VA had spent over $1 billion on various EHR modernization initiatives, all of which were abandoned, Rep. William Hurd (R-TX) said, “Let's be honest: There is not a track record of successes here.”

In a recent letter to Shulkin (embedded below), Sen. Jerry Moran (R-KS) wrote that “VA’s inconsistent messages regarding the urgency of finalizing the contract and willingness to give up on your own self-imposed timeline raises concern.” The VA requested $782 million in November to begin transitioning facilities in the Pacific Northwest to Cerner systems to keep up with DoD, which had already begun implementing the technology in that region.

“Further delay disrupts your implementation plan that requires 900 Cerner IP engineers to support the deployment of the system in the Pacific Northwest,” Moran wrote. “Unless you finalize the contract this month, there will be a considerable shift within Cerner to reassign those 900 IP engineers to other projects.”

The letter was written in January. As of mid-February, the contract still is not finalized. Moran’s letter requests a copy of the MITRE report upon completion.

Secretary Shulkin, the father of the VA’s most recent EHR modernization efforts, is himself facing scrutiny this week over the potential misuse of taxpayer funds. According to recent reporting, senior officials in the agency may have misled ethics officials about the nature of Shulkin’s trip to Europe over the summer, during which he and his wife attended the Wimbledon tennis championships and spent a substantial amount of time sightseeing. The trip is believed to have cost the agency in excess of $100,000.

Moran’s letter to Shulkin can be read below:

Related Coverage:

GAO Details Failed VA EHR Initiatives as Agency Requests New Interoperability Rule

Island Health System Struggling with Cerner Transition

VA Spent $1 Billion Trying to Modernize VistA

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