VA stands to improve payment process for controversial EHR contract, watchdog reports

The Department of Veterans Affairs’ inspector general on Wednesday issued an advisory in response to allegations that the department was not adequately overseeing a contractor’s progress reports before making millions of dollars in payments for work to modernize it beleaguered electronic health record system.

The department’s IG received an allegation that Oracle Cerner had submitted invoices for approximately $5.8 million between October 2019 and March 2020 with progress reports on deliverables that were not adequately detailed.

While the IG wasn’t able to substantiate those claims, it did report that the VA’s timeline for working with Oracle Cerner to correct issues with insufficient progress reports connected to invoices wasn’t adequate and could be improved.

“The complainant reported being told the progress report was just ‘a cover page, there’s an agenda, there’s six empty pages, there’s an ending. That’s what they turned in to get paid for this deliverable,’” the VA OIG management advisory memorandum issued Wednesday said.

The IG found there was actually detailed information in the progress reports, so it didn’t substantiate the allegation. However, the watchdog did conclude that “VA lacked timelines for when contractors needed to provide corrections to insufficient progress reports,” and therefore “the delays observed for contractors’ corrections to progress reports could limit VA’s ability to promptly and accurately monitor contractors’ progress on particular tasks.”

For 18 of the 48 Cerner progress reports reviewed by the IG, the VA required Oracle Cerner to resubmit the report with corrections, to which Cerner complied. But because there was no timeline in place, it impacted the VA’s ability to properly manage actions from the multiple and ongoing reports.

The IG requested that the VA inform it regarding what actions, if any, it plans to take to strengthen the deliverable review process in future contract requirements.

The VA’s EHR modernization office concurred with the information in the memorandum and had no additional comments. In addition, the VA’s Office of Information and Technology agreed with the memorandum without comment.

Veterans Affairs CIO Kurt DelBene told FedScoop last month that he is “cautiously optimistic” that Oracle Cerner can turn around EHR modernization after years of grave performance issues since it was rolled out in October 2020, including repeated outages that, according to the agency’s watchdog, have resulted in serious harm to veterans.

In May, the department announced it had reached a revised contract agreement with Oracle Cerner that it said “dramatically increases” the government’s ability to hold the contractor accountable for reliability, responsiveness and interoperability.