After long delay, Cerner reaches agreement with VA on EHR contract

Nearly a year after the deal was first announced, the Department of Veterans Affairs (VA) and health IT giant Cerner have finalized a $10 billion contract for Cerner to replace the VA’s in-house electronic health record (EHR) system.

After then-VA Secretary David Shulkin, MD, had awarded Cerner the contract without a competitive bidding process last summer, negotiations stalled over concerns about interoperability—a key reason Cerner had been given the project because it had already begun an EHR rollout at the Department of Defense (DOD).

The deal’s future was questioned after Shulkin left the VA amid reports that friends of President Donald Trump had reservations about Cerner products. The department ended up meeting a Memorial Day deadline to finalize the contract.

“This is one of the largest IT contracts in the federal government, with a ceiling of $10 billion over 10 years,” said Acting VA Secretary Robert Wilikie. “And with a contract of that size, you can understand why former Secretary Shulkin and I took some extra time to do our due diligence and make sure the contract does what the president wanted.”

The size of the contract is lower than the original estimate of $16 billion. The VA said in its press release that once implemented, the VA will have the same MHS Genesis platform as the DOD, allowing patient data to be “seamlessly” shared between the departments as well as community providers.

Finalizing the deal ends a financial headache for Cerner. The company saw its first quarter 2018 earnings fall by $13 million partially due to the delay in wrapping up the VA contract.

“We expect this program to be a positive catalyst for interoperability across the public and private health care sectors, and we look forward to moving quickly with organizations across the industry to deliver on the promise of this mission,” Cerner president Zane Burke said in a statement.

There are still concerns about the implementation of the Cerner EHR at the VA. For example, the contract “lacks specific clinical and interoperability requirements,” according to Politico. It’s also replacing the VistA system well-liked by VA physicians.

Adding to the potential stumbling blocks are the problems seen with the MHS Genesis rollout at the DOD. An April 30 report from the department said there have so many issues with the Cerner platform’s usability and interoperability that it recommended suspending the rollout indefinitely.