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Report: VA, Cerner in Talks Over Terms of 10-Year EHR Modernization Contract

The Department of Veterans Affairs and Cerner (Nasdaq: CERN) are in the final phase of negotiations over the terms of a potential 10-year contract to build and deploy a new electronic health record system across 1,600 VA facilities and community health providers, Federal News Radio reported Wednesday.

VA wants Congress to incorporate funds into the department’s fiscal 2018 appropriations bill to help pay for the implementation of the EHR modernization project under the contract’s first year.

The department would ask Congress to shift approximately $782 million in funds from VA’s office of information and technology and unappropriated balances in health care accounts to help launch the new EHR project if lawmakers fail to approve all spending bills and resort to another continuing resolution to fund the rest of FY 2018.

VA Secretary David Shulkin told members of a House Appropriations Committee subpanel at a hearing Wednesday that VA would see a 5 percent increase in total EHR deployment costs if the agency fails to get the funds from other accounts in fiscal 2018 and align with the Defense Department’s EHR system implementation.

Shulkin’s testimony came months after he announced plans in June to issue a direct solicitation to Cerner to field the same EHR platform – MHS Genesis – that DoD currently deploys as a replacement to VA’s Veterans Information Systems and Technology Architecture system.

Cerner works with Leidos (NYSE: LDOS) and Accenture (NYSE: ACN) as part of an industry team that won a potential 10-year, $4.3 billion contract in 2015 to help DoD integrate a commercial EHR platform across the Military Health System.

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