VA EHRM: Oracle Contract, Cost Growth, and Deployment

The VA Electronic Health Record Modernization program is the Department of Veterans Affairs’ effort to replace its 40-year-old in-house health records system, VistA, with a commercial platform built by Oracle Health. Originally contracted in 2018 at an estimated $16.1 billion, the program is now projected to cost $37.2 billion, was paused for roughly two years over patient safety failures, and as of mid-2026 has reached only 14 of the VA’s roughly 170 medical centers. It is the VA’s fourth attempt since 2001 to modernize its health records and one of the most scrutinized IT projects in federal government.

What the Program Is and Who Builds It

In May 2018 the VA awarded a 10-year, $10 billion contract to Cerner Corporation, which Oracle later acquired and renamed Oracle Health. Including IT infrastructure and program management, the VA initially told Congress the total effort would run about $16.1 billion over a decade.¹

The VA chose Cerner in June 2017 specifically because the Department of Defense had already awarded Cerner its own contract in 2015. The stated goal was a single health record that would follow a service member from active duty into VA care. The DoD calls its version MHS Genesis; a Federal Electronic Health Record Modernization office coordinates the shared environment across the VA, DoD, Coast Guard, and NOAA.²

After persistent system failures, the VA renegotiated the Oracle contract in May 2023, converting the single five-year base period into five one-year option periods so the department could reassess annually. The revised deal added 28 performance metrics, larger financial penalties for missed targets, and higher standards for uptime and help-desk response. At the time of the renegotiation, Oracle had refunded only about $325,000 of the $4.4 billion it had been paid. The VA said the new terms would have recovered 30 times that amount for past system crashes.³ As of May 2025, the VA had exercised the third of the five options.⁴

How the Cost More Than Doubled

The 2018 estimate of $16.1 billion broke down as $10 billion for the Cerner contract, $4.3 billion for IT infrastructure, and $1.8 billion for program management.¹ It excluded the physical infrastructure — wiring, cabling, heating and cooling — that VA facilities needed to run the new hardware.

A 2021 OIG audit found the VA had underreported roughly $2.5 billion in IT infrastructure costs and had never disclosed them to Congress. A separate OIG review estimated true physical infrastructure costs at $3.1 billion to $3.7 billion, against agency figures ranging from $1.1 billion to $2.7 billion.⁵ A 2022 independent estimate by the Institute for Defense Analyses put lifecycle costs at $49.8 billion, factoring in a longer deployment timeline and 15 years of post-deployment maintenance. The VA’s own revised number, as of September 2025, is $37.2 billion.⁶

Through the second quarter of fiscal year 2025, the VA had obligated about $13.84 billion.⁷ Congress allocated $3.4 billion in a recent funding package but withheld 30 percent of it until July 2026, contingent on the VA delivering an updated lifecycle cost estimate and a site-by-site deployment schedule.⁶ At a December 2025 hearing, legislators estimated that nationwide staffing increases needed to compensate for EHR-related workflow inefficiencies could add another $3.5 billion to $10 billion in payroll.⁸

What Went Wrong at the Early Sites

The first go-live was at the Mann-Grandstaff VA Medical Center in Spokane, Washington, on October 24, 2020, after two delays — one because the system was only 75 to 80 percent ready, and another for COVID-19.⁹ Four more sites followed in 2022: Walla Walla, Columbus, Roseburg, and White City. Each deployment surfaced serious problems.

The Unknown Queue

The most consequential failure was a defect that routed clinical orders — prescriptions, imaging requests, follow-up appointments — into an undetectable “unknown queue” instead of the intended department. Between the October 2020 go-live and June 2021, more than 11,000 orders went undelivered. About 77 percent were radiology studies.¹⁰

Clinical reviews identified 149 instances of patient harm: two major, 52 moderate, and 95 minor.¹¹ In one major-harm case, a psychiatric follow-up order for a suicidal veteran went to the unknown queue. The veteran was never scheduled, later contacted the Veterans Crisis Line with a plan to kill himself, and required psychiatric hospitalization.¹⁰ The VA Inspector General found no evidence that Oracle Cerner had told the VA about the unknown queue before go-live, and concluded the vendor placed the burden of finding and fixing the problem on VA staff.

Pharmacy Errors and Staffing Costs

A March 2024 OIG report found that a software coding error caused inaccurate medication and allergy information to be transmitted from new-EHR sites to facilities still running the legacy system, potentially affecting 250,000 veterans.¹² Affected patients were not initially notified.¹³ Pharmacies at early sites had to increase staffing by at least 20 percent to run manual workarounds, and the VA projected large medical centers could need up to a 60 percent increase in pharmacy staff. At the Columbus outpatient clinic, a prescription backlog led to a permanent 62 percent increase in clinical pharmacists.

Training and Clinician Burnout

A July 2021 OIG audit of the Spokane rollout found that training had focused on what staff called “button-ology” without teaching the clinical workflows needed to do actual jobs. Only 5 percent of surveyed staff reported they could perform all four core EHR functions — navigating, finding patient information, documenting care, and sharing data — without difficulty.⁹ An academic study found EHR usability declined significantly after go-live and did not recover by ten months, while the burden of using the system nearly doubled. Clinicians described organizing peer-support channels on Microsoft Teams because help-desk tickets rarely resolved on time, and reported burnout at levels they had never previously experienced.¹⁴

The 2023 Reset

On April 21, 2023, VA Secretary Denis McDonough announced a full program reset, halting all future deployments and acknowledging that the system was “not meeting expectations.” The pause built on an earlier freeze that had been in place since July 2022. Resources were redirected to fixing the system at the five sites already using it: Spokane, Walla Walla, Columbus, Roseburg, and White City. The VA estimated the pause saved $400 million in fiscal year 2023.¹⁵

One exception went forward during the freeze: the Captain James A. Lovell Federal Health Care Center in North Chicago, Illinois, a jointly run VA-DoD facility, went live in March 2024 to keep pace with the DoD’s completed rollout.¹⁶ VA officials called the launch a “qualified success”; the emergency room and inpatient units maintained full capacity and no critical safety incidents were reported. Sustaining operations during transition required 100 new staff and 800 experienced users borrowed from other military facilities.⁸

Congress applied its own pressure. Senator Jon Tester introduced the EHR Program RESET Act of 2023, which would have barred new deployments until existing sites met performance baselines.¹⁷ A House companion, H.R. 2809, would have required the VA to consider terminating the Oracle contract if performance targets were not met within 180 days.¹⁸ Neither bill passed, but the VA’s administrative reset carried out several of their goals.

Where Deployment Stands in 2026

In December 2024 the VA announced it would begin planning new deployments. On April 11, 2026, the system went live at four Michigan hospitals — Ann Arbor, Battle Creek, Detroit, and Saginaw — the first new sites in over two years.¹⁹ On June 6, 2026, three more medical centers followed: Cincinnati (with its Fort Thomas location), Chillicothe, and Dayton.²⁰

The VA plans 13 sites total in 2026: three Indiana facilities (Fort Wayne, Marion, and Indianapolis) in August, followed by Alaska and Cleveland in October.²¹ The department shifted to a strategy of simultaneous go-lives at multiple sites per wave rather than one at a time. Full deployment across roughly 170 sites is targeted for 2031.²²

The VA reports that the system ran at 100 percent uptime for 10 of the 16 months leading up to December 2024, with no outages for over 200 days. User interruptions such as freezes and delays have been reduced to what the VA calls “near zero” per day, and veteran outpatient trust scores rose at all initial EHR sites.¹⁹

What Oversight Bodies Are Still Flagging

The Government Accountability Office has been the program’s most persistent critic. Between June 2020 and December 2025, the GAO issued five reports containing 18 recommendations. Twelve are priority recommendations; as of December 2025, only two had been fully implemented.⁷

A March 2025 GAO report found that 58 percent of EHR users believed the system increased patient safety risks, only 13 percent believed it made the VA as efficient as possible, and 75 percent disagreed that the system improved their efficiency.²³ As of February 2025, about 1,800 complex configuration change requests remained unaddressed.²⁴ The GAO also warned that the VA’s integrated master schedule was outdated, that the agency had not provided the updated independent lifecycle cost estimate Congress had requested, and that the plan for simultaneous multi-site deployments was “very risky” given that roughly 160 medical centers (94 percent) still lacked the new system in mid-2026.⁷ A June 2026 GAO report on cybersecurity found the interagency EHR office had not defined common cybersecurity goals or performance measures for the shared system and had not fully followed leading practices for interagency data-privacy collaboration.²⁵

DoD Interoperability

The single health record has proved elusive in practice. A March 2024 GAO review of the Lovell FHCC — the only site where VA and DoD staff use the shared system side by side — found that of 69 topics identified for configuration alignment, stakeholders recommended convergence on only 31. The remaining 38 required the departments to use different configurations because of legal, policy, and operational barriers the agencies had not fully identified. Lovell operates with dual patient-care location hierarchies, two separate pharmacy systems reflecting different drug costs and billing rules, and a dental setup that requires staff to use two computers at each workstation.²⁶

DOGE and Support Contracts

The program also intersected with Department of Government Efficiency reviews in early 2025. Following a February 2025 congressional hearing, the VA, in coordination with DOGE advisors, terminated various support contracts and positions connected to the EHR effort. The EHRM Integration Office lost 24 employees through firings or deferred-resignation offers. Career officials asked DOGE advisors to reinstate a contract they described as vital for testing digital products with veterans, but the request was denied. The prime contract with Oracle Health was not affected. Congressional staff and program observers raised concerns that cutting support capacity while accelerating deployment created, as one source put it, an “impossible” math problem.²⁷

Whether the improvements made during the reset hold through the Indiana and Alaska waves later in 2026, and across the remaining 156 medical centers after that, will determine whether the VA’s fourth attempt succeeds where the first three failed.

1
VA Office of Inspector General. Unreliable IT Infrastructure Cost Estimates for the EHRM Program
2
Federal Electronic Health Record Modernization Office. About FEHRM
3
Federal News Network. VA Renews EHR Contract, Sets Higher Penalties
4
VA News. VA Continues Partnership With Oracle Health
5
Federal News Network. VA’s Unreliable Infrastructure Estimates Raise More Questions About EHR’s Cost
6
MeriTalk. Lawmakers Question VA’s EHRM Program Cost Estimate as April Restart Nears
7
U.S. House Committee on Veterans’ Affairs. GAO Testimony on EHRM Program
8
U.S. Medicine. VA EHR Rollout at Lovell FHCC
9
VA Office of Inspector General. Review of EHR Training at Mann-Grandstaff VAMC
10
VA Office of Inspector General. The New EHR’s Unknown Queue Caused Multiple Events of Patient Harm
11
Healthcare IT News. OIG Report on VHA Finds Multiple Events of Patient Harm
12
Fierce Healthcare. Lawmakers Grill VA, Oracle Leaders Over Pharmacy-Related Patient Safety
13
VA Office of Inspector General. EHR Modernization Caused Pharmacy-Related Patient Safety Issues
14
National Library of Medicine. Clinician Experiences With Oracle Cerner EHR Transition
15
VA News. VA Announces Reset of Electronic Health Record Project
16
Federal News Network. VA, DoD Launch New EHR at Joint Site
17
U.S. Congress. S.1125 – EHR Program RESET Act of 2023
18
U.S. House Committee on Veterans’ Affairs. H.R. 2809 Introduction
19
VA Digital Service. VA Begins Early Stage Planning for Next Federal EHR Rollout
20
VA Digital Service. VA Health Record System Back on Track With Michigan Deployments
21
VA Digital Service. EHR Deployment Schedule
22
Federal News Network. VA in 2026 Looks to Get EHR Rollout Back on Track
23
Government Accountability Office. VA’s Ongoing Struggle to Modernize Its EHR System
24
Government Accountability Office. GAO-25-108091
25
Government Accountability Office. GAO-26-107673
26
Government Accountability Office. GAO Review of Lovell FHCC Integration
27
Federal News Network. VA Cuts Support Work for New EHR After Canceling Hundreds of Contracts