House FY27 VA funding bill allocates $3.4B for EHR rollout
The agency’s effort to modernize its legacy health record system has long been stymied by cost overruns, technical issues and patient safety concerns. VA initially signed a $10 billion contract — later revised to over $16 billion — with Cerner in May 2018 to modernize its EHR system. Oracle later acquired Cerner in 2022 and rebranded the new unit as Oracle Health. A recent cost projection provided to Congress estimated the modernization project’s total price tag at around $37 billion.
VA paused most deployments of the modernized EHR system in April 2023 to address the safety and usability issues associated with the new software. At that time, the agency had only rolled out the system at five medical facilities. VA subsequently conducted a joint rollout of the Oracle Health EHR system with the Pentagon in March 2024 at a healthcare site in North Chicago.
Under current VA Secretary Doug Collins, the agency has moved to restart EHR system deployments and aggressively ramp up go-lives while addressing underlying issues that previously slowed the program. Earlier this month, VA rolled out the new software at four Michigan-based medical facilities, and the agency plans to implement the system at nine more sites in 2026.
Tuesday’s markup of the FY27 Military Construction, Veterans Affairs and Related Agencies bill came after the Trump administration released its governmentwide budget request earlier this month. VA proposed allocating $4.2 billion for the modernization project’s continued rollout.
The House panel’s funding bill, which was passed through the committee by a voice vote, would provide $3.4 billion for VA’s continuing EHR modernization project, with the funds “to remain available until September 30, 2029.” That is the same amount that Congress allocated for the EHR modernization project in FY26.
The allocated funds, however, would be contingent upon VA submitting quarterly reports to the House and Senate Appropriations panels “detailing obligations, expenditures, and deployment implementation by facility, including any changes from the deployment plan or schedule.”
Additionally, 25% of the total funds for the EHR modernization program would also be withheld until July 1, 2027, at which time they would only be disbursed if the agency provides both the House and Senate committees with additional information on the project’s progress.
That includes an updated life-cycle cost estimate as well as a site-by-site deployment schedule for medical facilities awaiting implementation of the new system. VA would also be required to show that the six medical facilities that received the EHR system prior to the end of the operational pause are meeting specific performance metrics, and provide “an updated projection of Federal VA staffing levels, contract support, and other relevant activities required, and the resources required to fund those activities.”
VA’s FY26 budget allocated $3.4 billion for the EHR modernization program, although Congress included a similar provision in that measure withholding 30% of the funds until this July, contingent upon the agency providing similar figures and information to lawmakers.
Rep. Sanford Bishop, D-Ga., said during the panel’s markup that Congress “must continue close oversight of the electronic health record modernization effort.”
“This bill includes a funding fence and reporting requirements, which I believe are steps in the right direction, but we still need far greater confidence in execution, patient safety and value for the taxpayer,” he added.
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