The Defense Department’s massive electronic health record modernization took another twist when IT vendor Cerner raised the cost of hosting the data center from the initial $50 million estimate up closer to $75 million, according to reports.

The DoD responded to Cerner’s new ante by saying that it might reopen bids – not for the entire Defense Healthcare Management Systems Modernization, or DHMSM, which is currently projected to cost $4.3 billion – but for the data center piece of the broader contract.

Hosting the data became a point of contention after DoD originally awarded the $4.3 billion DHMSM contract to the team of Cerner, Leidos and Accenture in July of 2015. 

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The no-bid datacenter hosting contract came later, because Cerner insisted it would only provide its analytics services it hosted the data, according to a Politico article.

DoD spokesperson David Norley told Politico that the EHR vendor upped the estimated cost of hosting because data processing turned out to be more expensive than Cerner originally expected.

DoD program executive Stacy Cummings, who is in charge of the Cerner rollout, said as recently as this past month that the agency is on track to deploy MHS Genesis at Pacific Northwest sites in December of this year.

Whether the DoD and Cerner will negotiate a different rate for hosting the datacenter or the DoD reopens another bid and pushes back the December implementation date remains to be seen.  

Twitter: @SullyHIT
Email the writer: tom.sullivan@himssmedia.com

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