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Questions arise about a $600+ million contract between Epic Systems Corp. and the VA

June 6, 2017 GMT

A contract between Epic Systems Corp. and the U.S. Department of Veterans Affairs -- worth more than $600 million -- could be in jeopardy now that the VA has chosen an Epic competitor to provide other electronic health records services.

Veterans Affairs secretary David Shulkin said Monday his agency will use the same technology as the Department of Defense is using, a system known as MHS Genesis, being developed by Cerner Corp. and Leidos.

Cerner and Leidos had beaten out a team of Epic and IBM in 2015 for that hotly contested Defense Department contract, which is worth $4.3 billion over 10 years.

Epic was not a contender for providing the main electronic health records for the VA, announced Monday. The agency had also considered updating its own internally developed records system, known as Vista, and did not seek outside bids.

But Epic won a separate contract in 2015 to produce an online medical appointment scheduling program for veterans, worth $624 million over five years. Epic was working with Systems Made Simple, which was then a subsidiary of Lockheed Martin. Systems Made Simple was acquired last August by Leidos, the company working with Cerner on the huge military records contract.

A pilot project on the veterans medical appointment software is underway, with results expected in 18 months, a Veterans Health Administration official told a Congressional committee in February, according to an article on the Healthcare Informatics website.

The VA did not respond Monday to repeated messages seeking clarification on whether the Epic/Systems Made Simple contract would be affected by Shulkin’s announcement, and Shulkin did not mention that contract.

But he said his goal is to make health records seamless as members of the military become veterans.

“Having a veteran’s complete and accurate health record in a single common (electronic health records) system is critical to that care, and to improving patient safety,” Shulkin said.

He also mentioned, though, that the plan “will require a meaningful integration with other vendors to create a system that serves veterans in the best possible way.”

A statement from Epic did not clarify the future of the company’s VA contract, either.

“As the largest electronic health record vendor in the United States, covering two-thirds of the nation’s patients, we are proud to serve our veterans both through the VA scheduling project and through our customers that care for millions of veterans across America. These customers are the top health systems in America and we stand with them, committed and eager to ensure veterans get the very best medical care regardless of where they receive it,” spokeswoman Meghan Roh wrote in an email exchange.

Meanwhile, Cerner spokesman Dan Smith said the Kansas City company -- also a major health care technology force -- is “honored and humbled” to be chosen.

“We believe this project, in concert with ongoing progress towards implementing the Department of Defense’s MHS Genesis system, will lead to ongoing innovation, improved interoperability and the creation of a single longitudinal health record that can facilitate the efficient exchange of data among military care facilities and the thousands of civilian health care providers where current and former service members receive health care,” Smith said in an email exchange.

Privately owned Epic, of Verona, has more than 9,600 employees and had $2.5 billion in revenue in 2016.