With Shulkin out at VA, what happens to the Cerner deal?

The Department of Veterans Affairs looked set to ink a $10 billion deal for new health record software system. Then the secretary got fired.

health data (everything's possible/Shutterstock.com)

When the omnibus funding bill was signed into law on March 23, it included $782 million for the Department of Veterans Affairs to get moving on its long-awaited electronic health record modernization project.

Estimated at $16 billion, the 10-year project involves the retirement of the VA's homegrown Vista health record system and includes the $10 billion acquisition of a commercial health record platform offered by Cerner.

As secretary, David Shulkin used his authority to announce a sole-source deal with Cerner in June 2017, arguing a compelling national interest in using the same system as the Department of Defense and the need to move quickly, avoiding the two-plus year competition process used by DOD for its health record modernization effort.

Despite the reported need for speed, the deal was held up for a variety of reasons. First, the VA needed to move money between budget accounts  --  a request that was stalled by the House and Senate Appropriations committees. Then, Shulkin put a freeze on the deal while a team at MITRE probed the extent to which the Cerner system would be interoperable with the systems of community care providers. The MITRE report, while never made public, generated 51 recommendations that were baked into the performance requirements in the VA's health record modernization in a March 15 update.

Then, on March 28, President Donald Trump fired Shulkin and announced his intention to nominate Adm. Ronny Jackson, the White House physician, to the post.

Shulkin exited with some harsh words for his political opponents in a New York Times essay, but without signing the Cerner deal.

And according to two former VA IT executives with current ties to the agency, there's a decent chance the deal now might not get done at all.

Opinions in the VA project management office in charge of the health record modernization project are split. The optimists think the Cerner deal could get signed under the incoming secretary,  assuming Jackson is confirmed by the Senate. Others  think that the scope of the project will be revisited as officials explore privatizing some of VA's health care delivery.

The optimists say that the White House is ready for the Cerner deal "to be a win," explained one former VA official. "They're not ready for it to be Shulkin's win."

Another former IT executive said that the political schedule will play a role. Assuming the vetting of Jackson goes well and a confirmation hearing is quickly scheduled in the Senate Veterans Affairs Committee, it will still be at least six to eight weeks before Jackson can be confirmed. This source said that if the Cerner deal isn't signed within the first 30 days of the next secretary's term, "the deal is dead."

That sentiment was echoed by former VA CIO Roger Baker, who is advising Cerner on the health record modernization. He said that Shulkin had to get buy-in from multiple constituencies in VA, on Capitol Hill and among veterans groups to go ahead with the plan to retire Vista and go commercial.

"Unless a new person comes in and says 'I'm signing the deal right now,' they're going to have to go back and rebuild all that."

Congress will also have something to say about it. The omnibus spending bill appropriates $782 million for the down payment on the new system. The money is good for three years, but it can't be spent on anything other than the electronic health record modernization.

Sen. Johnny Isakson (R-Ga.), chairman of the Senate VA committee, backed the Cerner deal when it was first announced in June 2017 and, according to a spokesperson, still wants to see a "fully interoperable health record" between DOD and VA. Isakson intends to talk to nominee Jackson about the health record modernization plan when they meet ahead of the confirmation hearing, the spokesperson said.

It remains to be seen whether appropriators who funded the plan or other members of Congress with oversight stakes in VA and government technology will press VA to go ahead with the plan.

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