Pentagon to Increase Health Records Contract Ceiling By Another Billion

The Defense Department plans to raise the ceiling of the contract for overhauling its outdated electronic health record system by an estimated $1.1 billion, agency officials said Tuesday.

The MHS Genesis contract with Cerner Corp. and systems integrator Leidos is currently valued at $4.3 billion with a total contract lifecycle value of $9 billion if all options are exercised.

The department will officially announce the decision on Tuesday in a justification and approval on FedBizOpps, and the revised contract will likely be finalized in the coming months, officials said.

The announcement comes two months after the Pentagon revealed major setbacks in the MHS Genesis rollout and the department’s director of operational test and evaluation called the platform “neither operationally effective nor operationally suitable.”

Stacy Cummings, program executive officer for Defense Healthcare Management Systems, told reporters the Pentagon expanded the contract include the Coast Guard in the project and also gain additional capabilities that were specified in the original contract.

Veterans Affairs Department in May signed a deal with Cerner to implement the same platform as the Pentagon, which included features that weren’t in the Defense contract. The revised deal would bridge that gap, Cummings said.

“A standard electronic health record baseline for the Department of Defense, Department of Veterans Affairs and U.S. Coast Guard will enable more efficient, highly reliable, safe and quality care,” she said.

The Pentagon temporarily suspended the MHS Genesis rollout in February after it generated more than 14,000 help tickets, including hundreds of incidents that could have led to patient deaths. Initial tests found platform could only perform about 56 percent of the 197 tasks used to measure the system’s performance, according to a report released in May.

Field tests at three military health facilities went so poorly the testing agency canceled plans to test at a fourth location, but as of July 13 the platform was up and running at all four sites, Cummings said. The agency is still troubleshooting the platform at the initial facilities, but the overall adoption’s shown “measurable success,” she added, noting the backlog of help tickets has fallen significantly since the May report.

Cummings said the department plans to publish a second evaluation report by the end of the year.

She also announced the four locations that will be part of next wave of MHS Genesis deployment: Naval Air Station Lemoore, Travis Air Force Base, U.S. Army Health Clinic Presidio of Monterey in California and Mountain Home Air Force Base in Idaho.

The Pentagon is also working closely with VA to make sure both agencies stay abreast of each other's issues and don’t slow down project timelines, Cummings said. She added she thinks both groups stand to benefit by taking advantage of each other’s work.

VA officials said adopting Genesis would enable seamless interoperability between the two agencies, but tech leaders said setbacks at the Pentagon “don’t bode well” for the VA rollout. Earlier this month, VA created a special office to manage the implementation of Genesis and lawmakers also stood up a new subcommittee to oversee the project.

Though its addition to larger Pentagon contract is still pending, the Coast Guard in April announced it would adopt MHS Genesis after years of unsuccessful projects—and millions wasted—trying to build its own system.