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VA Renegotiates EHR Modernization Contract With Oracle Cerner

The Department of Veterans Affairs has revised its electronic health record system modernization contract with Oracle Cerner a month after VA halted deployments of the EHR system as part of a program reset, Bloomberg Government reported Tuesday.

In April, VA reset the program in a move to address EHR-related issues that were identified at five department-run health facilities during the “assess and address” period.

Under the renegotiated contract, the five-year period has been changed to five one-year terms to provide the department an opportunity to reassess progress each year and renegotiate if the need arises, according to a copy of the VA announcement obtained by BGOV.

VA would receive larger monetary credits if the company fails to meet expectations under the revised contract, which comes with 28 performance metrics and one of those is outage-free time.

Cerner, which Oracle (NYSE: ORCL) acquired in June 2022, was awarded a $10 billion contract in 2018 to help VA replace its Veterans Health Information Systems and Technology Architecture, also known as VistA, with a modernized EHR system.

“This new agreement reflects Oracle’s commitment to Veterans’ health care 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 for Oracle Global Industries, said in a statement to GovCon Wire.

Reps. Mike Bost, R-Ill., chairman of the House Committee on Veterans’ Affairs; and Matt Rosendale, R-Mont., chairman of the subcommittee on technology modernization, said that they welcome the renegotiated contract but there are still questions that have not been answered.

“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,” the two House lawmakers said in a joint statement.

Sen. Jon Tester, D-Mont., chairman of the Senate Veterans’ Affairs Committee, issued a separate statement on the modified contract agreement between VA and Oracle Center.

“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,” said Tester.

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