EHR vendor CliniComp International filed a lawsuit on Friday against the U.S. Department of Veterans Affairs (VA) in its awarding of an EHR contract to Cerner Corp.
San Diego-based CliniComp said the VA didn't conduct a competitive bidding process before giving Cerner the contract. The company said it may have been interested in bidding for the contract if the VA conducted a public process.
VA Secretary Dr. David Shulkin said the VA avoided a competitive bidding process because it needed to replace VA’s struggling homegrown VistA system quickly. However, in its suit, CliniComp said the VA’s actions were “arbitrary, capricious, an abuse of discretion” and violated regulations.
The contract awarded in June could be lucrative for Cerner, which snagged a $4.3 billion deal with the Department of Defense (DOD) two years ago. But with government deals comes scrutiny, and potential roadblocks not often found in the private sector, like concerns with the bidding process.
In approving the VA spending bill in June, lawmakers said they want to see a roadmap for interoperability with the EHR, along with a comprehensive plan for developing it and expected lifetime and annual costs.
The new MHS Genesis will use Cerner's Millennium EHR product as its core. The first site went live in the middle of July at Naval Hospital Oak Harbor near Seattle. It's not the VA's only push toward modernization. Earlier this month the agency announced three telehealth and mobile application initiatives to expand veteran healthcare access.
Shulkin said the VA did not use a competitive bidding process for the EHR contract because it didn't have the more than two years the DOD took when it selected Cerner. "[F]or the reasons of the health and protection of our veterans, I have decided that we can’t wait years, as DoD did in its EHR acquisition process, to get our next generation EHR in place," Shulkin wrote at the time.
Industry leaders celebrated the news back in June. CHIME CEO and President Russell Branzell said, "Secretary Shulkin's announcement underscores the importance of achieving nationwide interoperability, highlighting many of the challenges experienced by healthcare CIOs today. I was pleased to hear that Secretary Shulkin consulted healthcare leaders, including hospitals CIOs, as he arrived at his decision to join the Department of Defense in moving toward a single EHR system from enlistment through retirement."
Two months later, CliniComp, which has worked with the VA and Department of Defense in other projects, is alleging the process was improper. The San Diego-based vendor said the VA would have found other options, including CliniComp, if it had researched the EHR market.
The VA EHR contract is a major win for Cerner, which said in May that it holds one-quarter of the acute EHR market next to competitor Epic, which also has one one-quarter of the market. Cerner’s VA contract gives the company a huge platform to promote their EHR and could open the door for more federal contracts to foster more interoperability between departments.
However, before that can happen, Cerner and the VA will need to wait for a federal court’s decision about whether the VA should have granted a contract to Cerner in the first place.