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Epic Systems is on the verge of losing a $624 million federal contract, a congressman says

December 22, 2018

The U.S. Department of Veterans Affairs appears poised to scrap a contract worth more than $600 million for Epic Systems Corp., of Verona, and its partner, Leidos, of Reston, Virginia, to provide a software overhaul aimed at getting quicker medical care to military veterans, according to a letter from a key congressman.

U.S. Rep. Jim Banks, chairman of the House Veterans’ Affairs Subcommittee on Technology Modernization, wrote a letter to the VA acting deputy secretary, James Byrne, on Dec. 14 that says he has been led to believe the agency either already has purchased or has promised to buy an appointment scheduling software package from Cerner Corp., of Kansas City — Epic’s main competitor — even though a pilot run of the Epic/Leidos system is said to be working well at VA clinics in Columbus, Ohio.

“While all available information indicates VA’s pilot of the Epic Cadence scheduling system in Columbus, Ohio, has been successful, my understanding based on testimony from and conversations with Department leaders is that VA’s preference is to implement the Cerner Millennium scheduling package, because it has either already been purchased or a commitment has been made to purchase it,” wrote Banks, a Republican from northeastern Indiana.

Banks said Veterans Affairs officials seem to have done their best to doom the Epic/Leidos program.

“It is extremely frustrating that previous VA leaders awarded the Medical Appointment Scheduling System (MASS) contract in 2015 to deploy Epic Cadence but stopped and started it repeatedly, at one point announcing that a resource-based scheduling system was unnecessary and VSE (the VA’s old system) was sufficient,” Banks wrote.

“It seems if Epic Cadence’s implementation had been unimpeded it could have been nearly complete by now,” the letter said.

Banks’ letter was issued in a news release, reported by Politico on Wednesday.

Epic draws early praise

The MASS contract was valued at $624 million over five years. After delays in giving Epic and Leidos the go-ahead to develop the system, an initial plan to test it in Boise, Idaho, and then VA experiments with its own antiquated system, Epic and Leidos got the green light in 2017.

Their pilot program began operating in Columbus in April and won praise from Columbus VA group practice manager Joanne Kusko, who told the Wisconsin State Journal in June the system makes it easier to schedule appointments for the 43,000 patients served by that unit.

“The schedulers love it,” Kusko said at the time.

Kusko said Epic’s MyChart program lets veterans make their own appointments and cancel them if necessary, instead of calling the clinic to perform those functions. That was expected to free up staff time and appointment openings.

Leidos vice president for veterans health Will Johnson said in June he had told the VA the two partners could expand to a national deployment in two years, for less than $350 million — barely more than half the initial estimate.

Cerner, though, had won a 10-year, $4.3 billion contract along with Leidos to update the Defense Department’s electronic health records system for active military members — a deal that Epic had vied for — in 2015. Then in May 2018, with no competitive bidding, Cerner received a whopping 10-year, $10 billion contract to revamp the VA’s electronic medical records systems for all veterans, a price that quickly ballooned to $16 billion.

According to an investigation by Pro Publica reported in November, it was White House adviser Jared Kushner, President Donald Trump’s son-in-law, who pushed for the company with the DOD contract, Cerner, to get the VA job, as well, thinking that would mean military records would automatically transfer to the VA that way.

But, Pro Publica reported, the two agencies already had software programs that could share records, and it cited a former VA official who said Cerner’s system is more about facilitating billing than about getting important medical files into the hands of clinicians.

According to Pro Publica’s report, three of Trump’s supporters and Mar-a-Lago friends — Ike Perlmutter, chairman of Marvel Entertainment; physician Bruce Moskowitz; and Marc Sherman, a lawyer — have been “quietly shaping the agency’s agenda.” The trio first suggested the VA electronic records overhaul in late 2016 and continued to play an active role in the project as it has evolved, Pro Publica said.

Waiting for word

A Cerner spokeswoman, Misti Preston, would not confirm or deny Rep. Banks’ comments about the MASS program on Friday.

“We don’t have any info to offer at this time,” Preston said.

Epic spokeswoman Ashley Gibson said as far as Epic knows, no final decision has been made on which scheduling system will be implemented.

VA spokesman Curtis Cashour did not answer questions about the issue on Friday, saying only, “VA appreciates the congressman’s concerns and will respond to him directly.”

In an email exchange with the State Journal in July about the scheduling program, Cashour said the VA expects to run the Epic/Leidos program through April 2019 and could extend beyond that date.

“After April of 2019, VA leaders will undertake a top-to-bottom review of its performance in order to make an informed, data-driven decision regarding the program’s next steps,” Cashour said at that time.

Requests for comments from Banks’ office and Leidos received no reply on Friday.

Banks has asked for a quick decision, as well as figures on how much Cerner’s Millennium package costs, how much it would cost to expand the Epic/Leidos package, and how the chosen system would increase efficiency and reduce appointment wait times.

Plans for the new software system emerged after complaints of long waits to see a VA doctor with some reports that as many as 40 veterans may have died waiting for care from the Phoenix VA.

Whichever system is chosen, Banks said, he would like the VA to keep the Epic Cadence package operating in Columbus “over the medium term. Time and money have already been invested to implement it, and by all accounts, it is functioning well,” he wrote.

Epic, one of the nation’s largest electronic health records providers, has 9,800 employees and had revenue of $2.7 billion in 2017.

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