Senators React to Renegotiation of VA’s Contract with Oracle

May 21, 2023
Instead of another 5-year term, the renegotiated contract is for 5 one-year terms, providing VA with more frequent opportunities to review progress and renegotiate

The Department of Veterans Affairs has renegotiated its EHR contract with Oracle Cerner in a manner that increases accountability and penalties across a variety of key areas while shortening the contract length and including stronger performance metrics. The new contract also now includes larger fines or “monetary credits” Oracle Cerner will need to pay VA if they do not meet the agreement’s terms.

Members of Congress who have oversight responsibility expressed satisfaction that the contract has been renegotiated. “It’s important to see that this renegotiated contract increases VA’s ability to hold Oracle Cerner accountable on key performance markers and hard metrics—something the contract negotiated under the Trump Administration severely lacked,” saidU.S. Senator Patty Murray (D-WA), Chair of the Senate Appropriations Committee and the VA Subcommittee, and a senior member of the Senate Committee on Veterans Affairs, in a statement.

In October 2022, VA announced it would delay the rollout of the Oracle Cerner EHR system at VA Puget Sound Health Care System until after June 2023. Since then — in April 2023 — VA announced that future deployments of the EHR would be halted in order to prioritize improvements at the five sites that currently use EHR, including Mann-Grandstaff in Spokane and Jonathan M. Wainwright in Walla Walla.

Under the new contract, Oracle Cerner will be penalized for failing to meet expectations on system reliability, responsiveness, and interoperability with other health care systems and applications, Murray explained. And importantly, instead of another 5-year term, the renegotiated contract is for 5 one-year terms—providing VA with more frequent opportunities to review progress and renegotiate.

“All in all, this is a much stronger contract, and I’m hopeful it will help VA ensure that Oracle Cerner gets this EHR program to work for Washington state providers and veterans,” Murray said. “Our veterans deserve the very best healthcare we can offer, and our VA providers deserve a system that works—I will continue using every tool at my disposal to push VA and Oracle Cerner to get this right.”

Senator Murray has been conducting oversight on what she calls the “flawed EHR rollout in Washington state” since the Trump Administration first negotiated the contract with Cerner (later acquired by Oracle), and at every point in the process since then.

“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 U.S. Senator Jon Tester (D-Mont.), Chairman of the Senate Veterans’ Affairs Committee, 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. That’s why I’ll keep holding VA and Oracle Cerner’s feet to the fire in implementing these changes while we work to pass stronger reforms under my bipartisan EHR RESET Act.

The EHR RESET Act would deliver a complete overhaul of the EHRM program. This includes provisions to restructure, enhance, and strengthen the entire EHRM program while also mandating aggressive reporting to Congress to increase oversight, accountability, and transparency following a series of challenges with the system and program, including those found in VA’s recent EHRM Sprint Report, a review from the Government Accountability Office, and countless VA Office of Inspector General reports. The legislation also included provisions requiring VA to aggressively negotiate new contract terms that better protect taxpayers and strengthen performance enforcement mechanisms and penalties while also developing a “Plan B” should the contract negotiations fail or technology continue to underperform.