VA underreported EHR project costs by $2.5B, OIG finds
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The Department of Veterans Affairs undershot cost projections for its electronic health records overhaul by billions of dollars, according to the findings of the department’s Office of Inspector General.
The auditors identified “weaknesses” in how the VA devised its cost estimates for the project that led the department to get the price tag wrong by $2.5 billion, says the report, which the inspector general published Wednesday.
Three years ago, the VA reported to Congress that the 10-year, systemwide implementation of a new Cerner Corp. EHR system would cost roughly $16.1 billion, including $4.3 billion to pay for upgrades to the department’s IT infrastructure. The Office of Inspector General found, however, that the VA didn’t account for $2.5 billion worth of other needed technology improvements. The VA “assumed” the money would come from other parts of the department, the report says.
The VA Office of EHR Modernization believed those costs were outside he scope of what the department is required to report to Congress and that the monies would come from the budgets for the VA Office of Information and Technology (OIT) and the Veterans Health Administration (VHA), officials told the auditors. The VA is gearing up to restart its EHR rollout in the coming weeks after wrapping up a strategic review of the project in June.
The inspector general’s report specifies, however, that the VA must report all related costs to lawmakers, regardless of the funding source.
The VA may not have enough money to cover those $2.5 billion in expenses, according to the OIG. The Office of EHR Modernization doesn’t have formal agreements with the OIT and the VHA that would facilitate those divisions to contribute funding to the EHR project, the report says.
“Although there was a general understanding that the OIT and the VHA will pay for some IT infrastructure upgrades necessary to deploying and sustaining the new electronic health record system, establishing formal agreements would help clarify who will fund the upgrades,” the inspector general reported.
The Office of EHR Modernization also didn’t present additional updates to its infrastructure costs to Congress as it identified them and the VA didn’t have complete documentation of how it reached the $4.3 billion figure, which made it difficult to determine how accurate the estimate is, the report says.
Since January, the Office of EHR Modernization has developed new procedures for its staff that align with cost-estimating guidance from the Government Accountability Office and has made improvements to its cost models, which will likely improve the reliability of future projections, according to the report.
The report’s findings mirror an OIG report released in May that found the VA may not have budgeted enough money for necessary physical infrastructure upgrades.
House lawmakers raised concerns about the latest report’s findings on Thursday and announced a July 21 hearing on recent OIG reports and VA progress on the EHR initiative.
“I continue to have serious concerns about the management of the EHRM program—including the lack of clarity around life-cycle costs, failures in staff training, and inadequate change management practices,” Rep. Frank Mrvan (D-Ind.), who chairs a subcommittee overseeing VA technology, said in a news release.
In a separate report this week, the OIG found “significant” issues with EHR training provided to clinical and administrative staff at Mann-Grandstaff VA Medical Center in Spokane, Washington, which was the first site to go live with the new EHR system last year. Shortcomings included a lack of training for staff who use the system as part of their daily work and not providing adequate time to cover complex topics.
Fifty-five percent of the hospital’s staff said they weren’t able to document patient care in the new EHR without difficulty and 65% said they weren’t able to navigate the different applications of the new EHR without difficulty, according to an OIG survey administered two to three months after the VA implemented the new records system.
The VA paused the EHR rollout to take a “strategic review” of the project in March following an assessment conducted during VA Secretary Denis McDonough’s first month in office.
The department is committed to the new EHR, which is designed to more easily share data with the Defense Department’s Military Health System, but may adjust the timeline for future deployments, McDonough said at the time.
The VA is unable to comment on the EHR project until officials testify about the strategic review at a Senate Veterans’ Affairs Committee next Wednesday, said department spokesperson Melissa Bryant.
“VA takes the findings of this and other OIG reports relating to the challenges of our electronic health record rollout very seriously,” she wrote in an emailed statement.