VA budget bill maintains EHR funding but imposes additional ‘reset’ oversight

VA Secretary Denis McDonough, shown here at a 2021 hearing, will have to keep Congress up-to-date on progress on the agency's multibillion health record refresh as a condition of obtaining necessary funding.

VA Secretary Denis McDonough, shown here at a 2021 hearing, will have to keep Congress up-to-date on progress on the agency's multibillion health record refresh as a condition of obtaining necessary funding. Chip Somodevilla/Getty Images

The bipartisan FY24 budget package allocates over $1.3 billion for the agency’s new electronic health record system but makes 25% of that funding contingent on enhanced transparency around VA’s ongoing EHR “program reset.”

The bipartisan budget package introduced by lawmakers on Sunday includes more than $1.3 billion in funding for the Department of Veterans Affairs to continue deploying its new Oracle Cerner electronic health record system, but would make part of that funding dependent upon VA being more transparent with Congress about its efforts to rectify ongoing performance issues.

The fiscal year 2024 Military Construction, Veterans Affairs and Related Agencies Appropriations Act — one of six bills rolled out by House and Senate appropriators to avert a partial government shutdown on March 8 — would make 25% of the EHR modernization project’s funding contingent upon VA Secretary Denis McDonough providing information to the House and Senate Appropriations committees on efforts to, in part, remediate issues during an ongoing delay in deployments of the new system.

VA initially signed a 10-year, $10 billion contract with Cerner in May 2018 to modernize its legacy health record system and make the software interoperable with the Pentagon’s new Cerner EHR system. Cerner was later acquired by Oracle in December 2021 and the department agreed to extend its contract with the combined company last May, although the reworked agreement included performance metrics to incentivize software improvements. 

Almost since the moment the initial 2018 contract was signed, however, VA’s modernization project has been plagued by cost overruns, patient safety concerns and technical issues. The department ultimately paused future rollouts of the new software in April 2023 as part of a larger “program reset” to address a host of performance challenges. As of last April’s pause, the new Oracle Cerner software had only been deployed at five VA medical facilities.

While the FY23 Consolidated Appropriations Act similarly withheld 25% of the EHR modernization program’s budget until McDonough provided information to lawmakers on a previous October 2022 EHR system delay and other issues with the software’s rollout, the FY24 budget would require the VA secretary to submit a report to Congress detailing the status of issues that resulted in the ongoing reset period announced last April.

The new budget also requires McDonough to provide relevant congressional committees with a report on the status of “measurable operational metrics” that are being used to determine when to re-start EHR deployments, as well as to certify in writing “whether the system is stable, ready and optimized for further deployment at VA sites, and if not, an estimate of the timeline required to begin further deployments.”

As part of the 2024 funding proposal, lawmakers also required VA to submit to the House and Senate Appropriations committees “a report containing an earned value analysis of the veterans electronic health record system, including a graphic performance report, a schedule and cost performance indexes, an estimate of completion and a budget at completion and a variance analysis for cost and schedule.”

The release of the bicameral budget package comes after it was disclosed during a House Veterans’ Affairs Subcommittee on Technology Modernization hearing last month that interoperability issues between medical facilities using the new EHR system and those still using the legacy system have resulted in roughly 250,000 veterans being at risk of receiving the wrong medication or clinical determinations.

The bill’s reporting requirements regarding VA’s deployment pause are in addition to the department’s continuing commitment to provide lawmakers with quarterly briefings on the EHR modernization program and reports on its “obligations, expenditures and deployment schedule by facility.”