VA extends Oracle's EHR contract for 1 month

The Department of Veterans Affairs is continuing to negotiate a new one-year contract with Oracle Cerner to modernize its legacy health record system, even as some lawmakers are calling for the effort to be terminated if significant improvements are not made in the next few years.

VA initially signed a five-year contract with Cerner in 2018 to replace its legacy health record system. The modernization effort has faced numerous hurdles since then, however, resulting in technical breakdowns, accessibility issues and patient safety concerns. Oracle acquired Cerner in 2022 and committed to righting the project, although continuing challenges ultimately led to VA pausing new deployments of the software last April. The EHR system has only been implemented at six VA medical facilities.

VA renegotiated its contract with Oracle Cerner in May 2023 to include more performance metrics in the agreement and to change the contract from a 5-year term to five 1-year terms as part of an effort to enhance oversight of the software’s rollout. 

Although the latest contract was set to expire on May 16, VA Press Secretary Terrence Hayes said that “both parties have agreed to an extension of the contract for 1 month to allow the current negotiations to continue.”

“These negotiations have been focused on additional considerations to support long-term success of the program for veterans and clinicians alike,” Hayes added. “We remain committed to holding Oracle Health and ourselves accountable to take the necessary actions to resolve ongoing challenges with deployment of the federal electronic health record.”

News of the temporary contract extension led several leading House Republican representatives to underscore the need for greater congressional oversight of VA’s EHR modernization project, including through passage of a bipartisan legislative package introduced earlier this month. 

Known as the Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act, the bill included several provisions to improve performance at the VA medical facilities using the new software, as well as additional performance metrics that must be maintained or met before additional deployments of the Oracle Cerner EHR system can occur. 

One of these provisions also calls for VA “to end the electronic health record modernization program” two years after the bill’s enactment if medical facilities using the new software do not show improvement.

In a joint statement, Rep. Mike Bost, R-Ill., the chair of the House Veterans’ Affairs Committee, and Rep. Matt Rosendale, R-Mont., the chair of the House Veterans' Affairs Subcommittee on Technology Modernization, said the EHR provisions included in the legislative package will help “ensure the system has truly improved.”

“Without transparent, enforceable standards backed up by reliable data as the bill would require, a deeply flawed EHR may be forced into more VA facilities, wasting billions more taxpayer dollars and threatening to harm more veterans,” they added.

Rep. Cathy McMorris Rodgers, R-Wash., whose district includes the first VA medical facility to use the new EHR system and who chairs the House Energy and Commerce Committee, also said the bill provides a clear message to Oracle Cerner: “either fix your deeply flawed system or your time’s up.”

Prior to VA and Oracle extending their contract discussions, a group of senators called for the department to push for the inclusion of new performance standards in the agreement. 

In a May 6 letter, three Democrats on the Senate Veterans’ Affairs Committee — Sens. Jon Tester, D-Mont., Patty Murray, D-Wash., and Sherrod Brown, D-Ohio — said VA should “use the opportunity the new contract structure provides to re-review terms and add additional accountability and oversight provisions to protect veterans and taxpayers.”

Tester, who chairs the Senate panel, has been highly critical of Oracle Cerner’s management of the new system’s rollout and was the Senate sponsor of the EHR Program Reset Act, which was introduced last July. Portions of the bill were included in the legislative package introduced earlier this month. 

Tester told Nextgov/FCW last year, however, that modernizing VA’s legacy health record system “is not optional.”