Senate probes VA's electronic health record spending

After a June 2017 decision to switch to a commercial electronic health record system, the Department of Veterans Affairs has received $1.2 billion in appropriations for modernization and the agency is seeking another $1.2 billion in its fiscal year 2019 budget. But because of multiple delays in signing the contract, Senate appropriators are wondering when the money will be spent.

At a May 9 hearing, Sen. John Boozman (R-Ark.), chairman of the Senate Appropriations subcommittee that funds VA, pressed agency Chief Financial Officer Jon Rychalski about the delay in signing the contract, and wondered if VA was going to be able to spend the money.

According to VA sources, the $10 billion contract has been in final form since February, after multiple reviews to ensure the Cerner software VA planned to acquire would met agency expectations when it comes to interoperability with commercial systems. The award was further delayed when David Shulkin was fired from the VA secretary job in March.

Rychalski said that acting VA Secretary Robert Wilkie has promised to make a decision by Memorial Day on whether to sign the contract.

"When [Wilkie] came in, he sort of came in cold," Rychalski said. "He felt he needed to do due diligence to make sure that he was comfortable making a decision of this magnitude. So that's been sort of this second delay."

Over this year and next, Rychalski said, about $1.1 billion of the money is set to go to Cerner. The balance of the money is for infrastructure and equipment. He estimates that $160 million of the 2018 money will carry over until next year.

Sen. Brian Schatz (D-Hawaii), the ranking member on the subcommittee, asked whether Congress needed to "adjust" the funding for the 10-year modernization project. "There's no reason to appropriate $2 billion that's going to sit in a pile when we have other urgent needs," he said.

Rychalski said he didn't anticipate "substantial delay" with the first increment of funding, and promised a "deep dive" into the spend plan for this year and next. "I don't want [to sit here] and commit my reputation to [say] we're going to need every dime of every dime of it," he said, but "it looks like they're on track with it."

A former senior VA official told FCW that the run rate on the appropriated funds was less significant than the agency getting a head start modifying its equipment and infrastructure to support the modernization – a lesson the Department of Defense learned the hard way. About $200 million of the FY18 funds are supposed to go to those improvements.

If the signing of the deal with Cerner "gets pushed out another month or two, it will get difficult to spend that much money in in a responsible way," the former official told FCW. "They should get moving now – that's a big takeaway from the DOD deal."