The VA renews the EHR contract, and sets higher penalties for performance measures that the seller misses Federal News Network

The Department of Veterans Affairs is renewing its multibillion-dollar contract for a new electronic health record, with new terms intended to hold the vendor liable for continued outages.

The Department of Veterans Affairs announced Tuesday that it has reached agreement on a renegotiated contract with electronic health records contractor Oracle-Cerner.

Tuesday was the deadline for the VA and Oracle-Cerner to renew the core five-year contract signed in 2018.

The VA announced last month that it would indefinitely suspend all future deployments of Oracle-Cerner EHR, until it addressed issues at the five VA sites already using the system.

The Department of Veterans Affairs has committed nearly $9.4 billion to the electronic health record update program since fiscal year 2018.

The renegotiated contract includes larger penalties that Oracle Cerner will need to pay the VA, if the EHR does not meet performance goals.

Instead of renewing the EHR contract for another five years, as described in the original contract, the VA renegotiated with Oracle-Cerner to extend the contract for five one-year terms.

The change gives the VA the opportunity to “review our progress and renegotiate again in a year if necessary,” said Neil Evans, acting executive director of the VA’s EHR Modernization Integration Program.

“Ultimately, we believe this new contract gives the VA the tools we need to hold Oracle Cerner accountable for delivering an electronic health record that will improve health outcomes and benefits for veterans,” Evans said. “The system hasn’t been handed over to veterans or veterans’ physicians yet, but we’re stopping at nothing to get this right.”

The new contract includes 28 Oracle-Cerner performance metrics to meet or exceed, and includes a higher standard for reliability and uptime.

These measures include reducing outages, or periods when the EHR is completely down – as well as moments when an EHR component is not working or when the EHR is running slowly.

The VA experienced an Oracle-Cerner EHR system outage of 224 minutes on April 25th. The outage also affected the Department of Defense and the Coast Guard, which are far ahead in deploying the system.

The Oracle-Cerner EHR also experienced a five-hour outage across the VA, DoD, and Coast Guard on April 17. The outage stemmed from a significant upgrade added to the electronic health records over the weekend, which aims to improve database capacity and failover capability.

Oracle-Cerner has so far refunded to the VA about $325,000 of the $4.4 billion paid through the contract to date. These payments are intended to compensate the VA for failures of the EHR system.

If the new contract terms had been in place since the original contract was signed in 2018, the VA said it would have refunded 30 times the money back from Oracle-Cerner for EHR system outages.

The new agreement “reflects Oracle’s commitment to veterans’ health care as well as complete confidence in our technology and partnership with the VA to deliver an electronic health record that exceeds users’ expectations,” said Mike Cecilia, executive vice president, Oracle Global Industries.

The new contract also set a higher bar for the vendor to resolve assistance tickets and VA doctor requests with the system.

The VA said the new contract additionally includes language to ensure the VA has prompt access to patients’ health records from private sector hospitals, when needed.

The VA said the new contract is taking steps to ensure that the new electronic health record is interoperable with its website, mobile app, and other critical applications related to veterans health care.

Dennis McDonough, secretary of the Department of Veterans Affairs, told House sources in March that the Oracle-Cerner EHR rollout so far has been “undoubtedly a disservice” to veterans.

McDonough told members of the House Appropriations Committee Subcommittee on Military Construction, the VA and Related Agencies on March 29, asked about the possibility of an agency switching vendors. “We’ll be in a position to preserve what we have, and then see if another technology becomes available.”

But lawmakers in the House and Senate say the renegotiated contract is just the beginning of what the VA needs to do to get the troubled Oracle-Cerner EHR contract back on track.

Senate VA Committee Chairman John Tester (D-Mont.) said the committee “will continue to lift the feet of the VA and Oracle Cerner in implementing these changes,” and called on Congress to pass its bill that sets a higher standard for VA appeals to roll out EHR.

“I’ve said from day one that EHRM should be offered to veterans, VA medical professionals and American taxpayers — and this new contract is a step in that direction,” Tester said. “But this is just the beginning of what is required to make this program work in a way worthy of our veterans and our taxpayers.”

Senior Democrats and Republicans on the House Veterans Affairs Committee support the Tester EHR Program Reset Act.

The bill would prevent the VA from moving forward with operating electronic health records at additional facilities, until performance data from the five existing sites already using the system show improvement.

House Committee Assistant Chairman Mike Post (R-Illinois) and Subcommittee Chairman Matt Rosendell (R-Mont.) said their biggest questions about how the new contract will change the rollout of VA electronic health records “remain unanswered.”

“We need to see how the division of labor between Oracle, the VA, and other companies changes and translates into better outcomes for veterans and savings for taxpayers,” Post and Rosendhal said. “This short-term contract is an encouraging first step, but the veterans and taxpayers need more than a wink and a sign that the project will get better.”