VA needs money fast for health record program

Veterans Affairs Secretary David Shulkin is ready to sign a contract with electronic health records firm Cerner to replace the agency's aging, homegrown Vista system. But to get moving on the deal quickly, VA needs to move some money around.

The department wants to move fast, with an initial rollout of the news system planned for 18 months after the contract is signed.

To stay on track with that ambitious launch schedule, VA is looking to immediately reprogram $374 million in current funds: $324 million from its patient care fund and $50 million from the headquarters budget to start the planned project, which involves a multibillion sole-source deal with Cerner, scheduled to be signed before the end of the month.

Overall, VA hopes to reprogram $782 million of fiscal year 2018 funding, but they have to start smaller because of restrictions on transfer of funds into VA's Office of Information and Technology Office account, and restrictions imposed by the current continuing resolution.

Shulkin and others leading the VA's electronic health records modernization effort are pushing the deal out the door because they want to align their efforts with the Pentagon's work on electronic health record implementation – to take advantage of technical staff and infrastructure. The Department of Defense is in the midst rolling out the Cerner system at sites in the Pacific Northwest. The VA plans to begin their refit in the same geographic area.

John Windom, VA's executive director for Electronic Health Record Modernization, told a House committee at a Nov. 15 hearing that failure to align VA's rollout of Cerner with DOD efforts could add five percent to the overall price tag of the 10-year project.

It's not clear yet how much the Cerner deal will cost VA. Shulkin said in the public hearing that it would be "billions less" than the projected $19 billion cost of maintaining Vista for 10 years. A VA source told FCW that the Cerner contract would be closer to $10 billion, while other observers have put the deal at $18 billion.

Shulkin said VA has been able to "negotiate substantial savings in efficiencies and timelines because of DOD's experience here."

Stacy Cummings, program executive officer of the DOD's Defense Healthcare Management Systems, told reporters on a conference call to mark the completion of the initial deployment of the Cerner system at sites in the Pacific Northwest, that there was a lot of groundwork laid that VA will be able to take advantage of.

"They are going to match their deployment schedule to ours," Cummings said. "The great thing about that is the opportunity to partner up in the deployment of training as well as follow up training, and to make sure the infrastructure is optimized for the region as we bring on new users," she said.

"We're absolutely going to take advantage of the investments that DOD has already made in a single data center where both DOD and VA data will reside in a single platform," Cummings said, referring to the facility in Kansas City, where Cerner is based.

But to get started, appropriators in the House and Senate will have to approve the transfers sought by VA leaders. After 17 years of talk about VA-DOD interoperability and health record modernization, lawmakers are leery of this latest request. House appropriators asked for the hearing late last week to go on the record with concerns and complaints about the hurry-up on the Vista replacement effort.

"VA's foot-dragging on Vista has become our emergency," said Rep. Debbie Wasserman-Schultz (D-Fla.), ranking member of the Military Construction, Veterans Affairs and Related Agencies subcommittee of the House Appropriations Committee.

Shulkin said he would "prefer not to do this transfer," and instead have the electronic health record replacement be part of the 2018 appropriation. But the concern is that if a full appropriations bill including the new money doesn't pass by the end of the current calendar year, VA's efforts to maintain an aggressive schedule will stall.

Rep. Charlie Dent (R-Pa.), who chairs the subcommittee, asked whether the Office of Management and Budget is behind the project. He noted that OMB has not submitted a fiscal year 2018 budget amendment to cover additional funding, as was the case with the Defense Healthcare Management Systems Modernization project.

Shulkin said his agency has been "working closely with OMB" and "they are both aware of and supportive of this initiative."

Shulkin also disclosed that he's taking the lead in governance for this project – something that's not been done before. He said that "siloes between IT and the health system" are part of what has led to the Vista replacement being delayed as long as it has already.

Windom, who led the program executive office during part of the DOD modernization effort, will report directly to VA Deputy Secretary Thomas Bowman. Acting CIO Scott Blackburn, who also testified at the hearing, is consulting with a group of private-sector hospital CIOs, including representatives from Johns Hopkins, the Mayo Clinic, Kaiser Permanente and elsewhere, to identify pitfalls in electronic health records contracting and implementation strategy.

Shulkin said the modernization effort won't lead to layoffs among current IT staff. While the basic upkeep of the new system will be done by Cerner, Shulkin said "we need every one" of the current employees to keep Vista going during the seven- to eight-year transition. "Once we shut down Vista, staff will be utilized as part of our current IT staff," he said. "We do not believe this will be a job loss."

The public discussion was followed by a closed session, to avoid disclosing information that could derail contract talks or provide fodder for protests from other vendors. Shulkin's decision to sole-source the deal to Cerner, citing interoperability with the DOD system as a compelling reason, is already the subject of a federal lawsuit from health technology vendor CliniComp. That lawsuit was dismissed but is on appeal. The firm is hoping to settle its case in exchange for an opportunity to demonstrate its software for VA.

This article was updated Nov. 15 to include comment from a DOD official.