VA watchdog lists EHR modernization as a major management challenge

The top watchdog for the Department of Veterans Affairs said the agency’s project to modernize its legacy electronic health record system remains a major administrative concern, even as VA readies to resume deployments of the oft-beleaguered new software in just a few months.

VA paused most rollouts of its new Oracle Health EHR system in April 2023 to address problems at the medical sites where the software had been deployed, which included usability issues and concerns about patient safety. 

This April, almost three years to the day it instituted its program reset, VA is planning to implement the system at four Michigan-based medical sites. The department is also readying to deploy the new software at nine additional medical facilities this year, bringing the total to 13 go-lives in 2026.

In an annual report released on Thursday, VA’s Office of Inspector General outlined five major management challenges across the agency that included its information systems and innovation efforts, particularly highlighting the EHR modernization project. 

As the report noted, the new EHR software “experienced major performance incidents — 360 outages, severe degradations, and functionality issues at its first five sites — which contributed to VA’s decision to halt deployment at other planned sites.” VA has 170 medical centers.

During the ensuing reset period, VA conducted a joint rollout of the Oracle Health EHR system with the Defense Department in March 2024 at the Captain James A. Lovell Federal Health Care Center in North Chicago, Illinois. The new software is meant to be interoperable with DOD’s new EHR system, which is also provided by Oracle. VA deemed that go-live a success and said that lessons learned from the deployment would inform future rollouts. 

The OIG report also said that “inadequate controls for handling major performance incidents primarily occurred because of the way the original May 2018 contract was written.” 

VA initially signed a $10 billion contract — later revised to over $16 billion — with Cerner in May 2018 to modernize its legacy system. Oracle later acquired Cerner in 2022 and rebranded the new unit as Oracle Health. 

Although VA subsequently modified its contract with Oracle Health in 2023 to enhance performance requirements, OIG said its recommendations “that address the process for assessing performance issues remain open.” In total, the watchdog said “there remain 32 OIG recommendations that are not fully implemented as VA resumes system deployments.”

The report added that “continued major performance incidents can lead to further costly delays in system implementation and pose an ongoing risk to patient safety.”

The EHR modernization project was not the only major IT overhaul that the OIG flagged. The report also detailed challenges with the rollout of VA’s new Integrated Financial and Management System, or iFAMS, as well as VA’s Caseflow system to process claims and appeals.

“VA has historically struggled to effectively deploy new IT projects,” OIG said, also noting that “ambitious timelines for development and deployment often conflict with the department’s ability to design, govern, secure, and fully stabilize those systems.”

In the report’s foreword, VA Inspector General Cheryl Mason also wrote that the EHR project and other large-scale modernization efforts — including VA’s efforts to use automation and artificial intelligence to enhance its operations — “test VA’s ability to put veterans and their families first while making the best use of taxpayer dollars.”