VA puts Oracle Cerner on a short leash in $10B health records contract

The Department of Veterans Affairs extended its $10 billion contract with Oracle Cerner to deliver its electronic health record software, but added some accountability measures designed to improve performance on the stalled and troubled modernization program.

Dr. Neil Evans, who currently leads the Office of Electronic Health Records Modernization on an interim basis, said in a statement that the new contract "now includes stronger performance metrics and expectations" over multiple areas including reliability, responsiveness, interoperability with outside health care systems and with other VA applications.

The extension was inked, as scheduled, at the conclusion of its fifth year of a possible 10. VA opted to extend the contract for just a single year, rather the full 5-year period allowable under the terms of the 2018 agreement. 

"VA will have the opportunity to review our progress and renegotiate again in a year if need be," Evans said in a statement. 

The new deal includes opportunities for penalties and redress if Oracle Cerner misses its targets over 28 performance metrics, including uptime, help desk speed and effectiveness and more.

The news comes as VA is in the midst of a pause of new deployments of the Oracle Cerner system, which currently is in service in just five clinical settings.

"The system has not delivered for veterans or VA clinicians to date, but we are stopping at nothing to get this right—and we will deliver the efficient, well-functioning system that veterans and clinicians deserve," Evans said.

Top Republicans on the House Veterans Affairs Committee would certainly agree that the Oracle Cerner system isn't working as hoped, but they have doubts that the new contract terms are the answer.

"While we appreciate that VA is starting to build accountability into the Oracle Cerner contract, the main questions we have about what will be different going forward remain unanswered," Reps. Mike Bost (R-Ill.) and Matt Rosendale (R-Mont.) said in a joint statement. "We need to see how the division of labor between Oracle, VA and other companies is going to change and translate into better outcomes for veterans and savings for taxpayers. This shorter-term contract is an encouraging first step, but veterans and taxpayers need more than a wink and a nod that the project will improve." 

Bost, who chairs the Veterans Affairs Committee, and Rosendale, who leads a subcommittee in charge of oversight of VA tech, have introduced legislation to force Oracle Cerner to hit specific performance targets consistently under the threat of canceling the program and reverting to VA's homegrown electronic health records system VistA.