VA to pour $1B into EHR upgrades

The Department of Veterans Affairs, or the VA, plans to spend $4.8 billion to repair and improve its healthcare facilities in 2026, including upgrading its EHR systems.

The investment will be made as part of the Veterans Health Administration's Non-Recurring Maintenance (NRM) program, which funds one-time maintenance projects that are not part of routine maintenance. According to the press release, this is the most significant NRM investment in a single year in the VA's history.

The investment includes $1 billion for EHR maintenance and modernization, as well as facility preparation for future EHR upgrades.

The investment comes amid the VA's ambitious plans to deploy a federal EHR system across 164 medical centers and their clinics beginning in 2026, after a series of setbacks.

The VA's latest attempt at EHR modernization began in 2018, when it signed a 10-year contract with Cerner, now Oracle Health. The department started deploying the new EHR systems in October 2020; however, the project faced significant challenges.

The department paused the EHR rollout in 2021 amid concerns from lawmakers and the Government Accountability Office. Further, a VA Office of Inspector General report found that from 2020 to 2024, there were 826 major performance incidents, of which 360 occurred between Oct. 24, 2020, and Aug. 31, 2022.

In 2023, the VA halted all further EHR implementations to conduct a "reset" of the entire project. It renegotiated its contract with Oracle Health to include stronger performance metrics and larger financial penalties. In December 2024, the department announced it would resume deployments and planned to complete the EHR implementation by 2031. There are six medical centers currently live on the Federal EHR.

In addition to EHR upgrades, the VA will spend its NRM investment on updating medical facility infrastructure, supporting building upgrades and modernizing medical centers for "current and future care," the press release stated.

"Improved facilities, equipment and infrastructure mean better care for Veterans, and these funds will enable VA to achieve that goal," said VA Secretary Doug Collins in the press release.

Anuja Vaidya has covered the healthcare industry since 2012. She currently covers the virtual healthcare landscape, including telehealth, remote patient monitoring and digital therapeutics.