VA extends EHR contract with Oracle Cerner for 11 months

The Department of Veterans Affairs announced on Thursday that it extended its contract with Oracle Cerner to modernize its legacy electronic health record system, with the new 11-month agreement emphasizing “improved fiscal and performance accountability.”

VA initially signed a five-year contract with Cerner in 2018 to deliver its new EHR system. The project included making the system interoperable with the Department of Defense’s EHR software, which was also provided by Cerner. VA’s deployment of its new system, however, has been bogged down by technical issues, cost overruns, usability problems and patient safety concerns. Oracle subsequently acquired Cerner in 2022.

VA and Oracle Cerner renegotiated their contract in May 2023 to include additional accountability measures in the agreement and to change the terms of the contract from a 5-year term to five 1-year terms. Those discussions came after VA announced in April 2023 that it was pausing deployments of the EHR system as part of a “program reset” to address issues with the software. 

VA officials previously cited the joint VA-DOD rollout of the EHR software at the Captain James A. Lovell Federal Health Care Center in North Chicago, Illinois in March as a key test of the reset period’s effectiveness. That deployment was the only rollout not paused by VA’s program reset and marked the Pentagon’s last deployment of its new EHR software.

Citing positive reports from Lovell about the new software, VA Secretary Denis McDonough told lawmakers in April that the department anticipates that it will restart deployments of the Oracle Cerner EHR system during fiscal year 2025. 

VA signed a one-month contract extension with Oracle Cerner last month to allow for continued discussions over the next one-year term. VA Press Secretary Terrence Hayes told Nexgov/FCW at the time that the negotiations were “focused on additional considerations to support long-term success of the program for veterans and clinicians alike.”

In a press release, VA said the new 11-month contract focuses on supporting the six medical facilities currently using the new EHR system, as well as pre-deployment and deployment activities in FY25.

The department said the contract negotiations for the second 1-year option period focused on “supporting value-added services, such as system improvements and optimizations, and achieving better predictability in hosting, deployment and sustainment — all while keeping an eye on fiscal responsibility.”

Although the beleaguered deployment of the new system has led to bipartisan criticism from Congress, VA and Oracle Cerner officials voiced a more positive view of the system’s future.

“Executing the second option period of the contract allows VA and Oracle Health to continue to drive forward on the goals of the reset and future deployments,” VA Deputy Secretary Tanya Bradsher said in a statement.

Oracle also said in a press release that the contract extension “is a testament to the progress Oracle and VA have made to fortify the EHR system over the past two years.”