Biden budget cuts funding for health record refresh amid ongoing program 'reset'

The White House’s proposed fiscal year 2025 budget would allocate more than $369 billion to the Department of Veterans Affairs but would not provide funding directly toward any new deployments of VA’s modernized electronic health record system amid an ongoing pause to address challenges with the software’s rollout.

VA’s budget proposal represents a roughly 10% increase over the estimated FY24 budget total and would boost spending for a number of departmentwide priorities, including efforts to prevent veteran suicides, enhance claims processing and expand access to critical services.

“Veterans, their families, caregivers and survivors deserve the very best health care and benefits that this country has to offer — and President Biden’s proposed budget will help us deliver exactly that,” VA Secretary Denis McDonough said in a statement. “With these investments, we at VA can continue delivering more care and more benefits to more veterans than ever before in our nation’s history.”

The FY25 request, however, would only allocate $894 million for ongoing efforts to modernize the department’s EHR system, which the proposal noted was already “a decrease of $969 million” from the White House’s proposed FY24 funding level for the program. 

The long-delayed 2024 budget for the VA, which President Joe Biden signed into law on March 9, ultimately included roughly $1.3 billion in funding for the EHR modernization project, with 25% of that total contingent upon VA being transparent with Congress about its ongoing efforts to address performance issues with the software.

VA and the Department of Defense both contracted with Cerner — which was acquired by Oracle in 2021 — to replace their legacy electronic health record systems with software designed to  serve veterans from their day of enlistment through their returns to civilian life and beyond. But VA’s efforts to roll out the new software have been hamstrung by technical glitches, cost overruns, performance issues and patient safety concerns since the system’s first go-live in 2020, leading to the department only deploying the new software at five VA medical facilities.

VA and DOD also completed a separate joint rollout of the new Oracle Cerner EHR system at the Captain James A. Lovell Federal Health Care Center in North Chicago, Illinois, on March 9. The rollout at the nation’s only ​​fully integrated VA and DOD facility marked the final deployment of the Pentagon’s new EHR system at department hospitals, facilities and clinics around the world. 

With the exception of the joint DOD-VA deployment at Lovell, however, VA announced in April 2023 that it was pausing future deployments of the new software until further notice as part of a ‘program reset’ to address performance issues at the sites currently using the Oracle Cerner system. The ongoing pause is expected to last until the department is confident that the EHR system is ready to be rolled out at additional sites.

Of the $894 million requested for the EHR modernization program in VA’s FY25 budget proposal, $375 million of that total would go toward supporting the five sites using the new system, as well as for related sustainment activities at Lovell. An additional $191 million would be allocated for infrastructure readiness, while roughly $328 million would go toward the department’s Electronic Health Record Modernization Integration Office. 

Notably, VA’s FY25 budget request allocates $0 to additional “site transitions” — or rollouts of the new Oracle Cerner software — with the department saying funding is focused on other issues besides further deployments of the new system, “including sustainment of the federal EHR at all live sites…as well as hosting, operations and sustainment, implementation management, change management, training content maintenance and development.”

The budget also does not include any funding for site assessments conducted prior to implementation of the new Oracle Cerner EHR system, although the request said that this is because the program previously funded assessments for several Veterans Integrated Services Networks — or VISNs — and “as a result of the deployment schedule adjusting,” there is no need to direct funding toward additional site reviews in 2025.

“The current VISNs that are funded for [current state reviews] could change based on the updated deployment plan,” the request noted, adding that additional reviews “should resume in 2026 to support future deployments and refresh [current state reviews] for the sites that have been stopped during reset.”