What does Dr. Shulkin's firing mean for $16B VA-Cerner contract?

The Department of Veterans Affairs' EHR contract with Cerner could be in jeopardy now that the agency's Secretary David Shulkin, MD, has been fired from his post, according to Nextgov.

The VA has been in the process of drafting an EHR overhaul contract with Cerner since Dr. Shulkin announced his intention to replace the agency's legacy system, VistA, with the North Kansas City, Mo.-based vendor in June 2017. No contract has been finalized yet — primarily due to concerns over the interoperability of the VA's EHR with the Department of Defense's — but it's estimated to cost nearly $16 billion.

Roughly $782 million has already been allocated to the effort for the coming fiscal year. However, with Dr. Shulkin out, some analysts are speculating the VA's deal with Cerner may be up in the air.

"This disruption in leadership at the VA puts in doubt the timing (and potentially the certainty) of [Cerner] signing a long-awaited $10+ billion deal to modernize the VA infrastructure for medical records," Wells Fargo analysts said in a note published March 29 and obtained by Politico Morning eHealth newsletter.

Cerner deferred Becker's Hospital Review's request for comments to the VA, which said it does not typically comment on ongoing contract negotiations.

President Donald Trump nominated White House physician Rear Adm. Ronny L. Jackson, MD, to take over for Dr. Shulkin, but many have raised questions over his lack of experience leading a large organization. Until Dr. Jackson is confirmed, DOD Undersecretary for Personnel and Readiness Robert Wilkie will serve as acting VA secretary.

Wells Fargo analysts believe the VA is unlikely to sign the contract until the agency's leadership gaps are filled, but they don't think the VA will select a different vendor. Instead, they believe it may just take more time to reach an agreement.

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