Shulkin’s Firing Leaves $16B Effort to Merge DoD/VA Health Records Up In The Air

Former Veterans Affairs Secretary David Shulkin

Former Veterans Affairs Secretary David Shulkin Andrew Harnik/AP

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Secretary Shulkin championed a contract with Cerner to develop a new health records system for Veterans Affairs, but the deal seems precarious now.

Last year, then-Veterans Affairs Secretary David Shulkin took center stage during a White House press briefing to announce a groundbreaking electronic health records contract to fix years of interoperability failures between VA and military health records.

With Shulkin’s firing Wednesday, that deal—pegged at upwards of $16 billion—is in a precarious position.

The secretary had expected to finalize a contract with the tech firm Cerner in the coming weeks to bring VA onto the same commercial health records platform as the Pentagon, an effort that came after VA wasted billions in a years-long effort to improve record sharing between the agencies.

Cerner referred questions from Nextgov about the contract Thursday to VA. A VA official said the agency would not comment on “ongoing contract negotiations,” suggesting a deal is not yet solidified. The White House, which advised Shulkin on his decision to sole-source a contract to Cerner, did not respond to requests for comment.

Shulkin’s firing comes after appropriators allocated $782 million in the coming fiscal year to support the rollout of the new electronic health records system. The contract was delayed after disagreements over the interoperability of the system, as VA wants seamless health records transfers for soldiers who transition to veterans.

President Trump nominated Adm. Ronny L. Jackson, who has served as the White House physician since 2013, to replace Shulkin. In the interim, Defense Department Undersecretary for Personnel and Readiness Robert Wilkie will serve as acting VA secretary.

Jackson’s positions are unknown on key issues, such as the electronic health records deal or a controversy regarding privatizing health care services at VA, though they are likely to come out during the Senate confirmation process.

In the interim, House lawmakers—some of whom forged strong partnerships with Shulkin—are approaching Jackson cautiously.

“I am in the process of reaching out to Dr. Jackson and I look forward to building a strong relationship with him also,” said Phil Roe, R-Tenn., Chairman of the House Veterans Affairs Committee, in a statement.

“At the end of the day, cabinet secretaries serve at the pleasure of the president,” Roe added, saying that he “hate[s] to see Shulkin go" but respects Trump’s decision.