VA Renegotiates EHR Contract to Increase Oracle Cerner Accountability

The Department of Veterans Affairs (VA) has renegotiated its $10 billion EHR contract with Oracle Cerner to include stronger performance metrics and larger financial penalties, according to reporting from The Spokesman-Review.

The EHR platform, which VA first launched at Spokane's Mann-Grandstaff VA Medical Center in October 2020, has been plagued by problems. VA officials have confirmed that system deficiencies contributed to more than 150 cases of harm and the deaths of four veterans.

The original Oracle Cerner contract, signed in May 2018, was supposed to last ten years with a five-year option period that expired earlier this week.

"VA has reached an agreement on a modified contract with Oracle Cerner to deliver the high-functioning, high-reliability, world-class electronic health record that Veterans deserve," the department said in a press release.

VA added that the modified contract "dramatically increases VA's ability to hold Oracle Cerner accountable across a variety of key areas."

Officials said that the new contract aims to minimize recurrent system outages, address end-user problems more quickly, and improve how the EHR interacts with non-VA hospitals and the rest of the Veterans Health Administration (VHA).

In each of those areas, the department said, the contract now includes "stronger performance metrics and expectations" and larger financial consequences for Oracle if it does not meet standards.

"This new agreement reflects Oracle's commitment to Veterans' healthcare as well as complete confidence in our technology and our partnership with the VA to deliver an EHR that far exceeds the expectations of users," Mike Sicilia, executive vice president of Oracle Global Industries, said in a statement.

Instead of another five-year contract term, the contract will continue for five single-year terms, with the chance to renegotiate it next year.

In a joint statement, the Republican chairmen of the House committee and the subcommittee charged with oversight of the system called that structure "an encouraging first step." Still, they added, "Veterans and taxpayers need more than a wink and a nod that the project will improve."

"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," said Representatives Mike Bost (R-Ill) and Matt Rosendale (R-MT). "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."

Senator Jon Tester (D-MT), the Democratic chair of the Senate VA Committee, promised to "keep holding VA and Oracle Cerner's feet to the fire" while working to pass a bipartisan bill to pass stronger reforms on the project.

"I've said from day one that the EHRM system has to deliver for veterans, VA medical professionals, and the American taxpayer—and this new contract is a step in that direction," Tester said in a statement. "But this is just the start of what's needed to get this program working in a way deserving of our veterans and taxpayers."

Senator Jerry Moran (R-KS), the top Republican on the Senate VA Committee, agreed that the contract changes are an improvement but that the EHR requires "a major overhaul." Moran has introduced his own bill that seeks to fix the VA EHR project.

"Our veterans deserve the best care our country can offer, and I will continue working to make certain this program works for our veterans," he said in a statement.