Law360 (January 29, 2020, 8:07 PM EST) -- The
U.S. Government Accountability Office has
rejected a Boston-based company's protest of a contract awarded to Cerner
Corp. to improve clinical documentation at Veterans Affairs, saying
the order fit under a broader $10 billion deal to overhaul the VA's health
record system.
Although Nuance Communications Inc. argued that the
clinical documentation improvement deal was too far outside the terms of
Cerner's overarching electronic health records contract with the U.S. Department of Veterans Affairs and
should have been awarded as a separate contract, the GAO ruled that the VA's
agreement with Cerner clearly encompassed all EHR requirements including
incidental needs.
"Based on our review of the record, it is clear that the coding and [clinical documentation improvement] requirements of [the task order] are inherent to performance of the comprehensive EHR requirements," the GAO said in a Jan. 8 decision released Tuesday.
The disputed task order, issued in September and estimated at $19 million, covers the development and deployment of clinical documentation improvement functionality, intended to make sure the services provided to patients are captured properly and therefore can support the agency's "revenue cycle requirements," according to the decision.
Nuance, a software company based in a suburb of Boston that provides health information coding services for the VA under another contract, argued that the order should have been issued as a separate competition outside of the EHR contract awarded to Cerner, a Kansas City, Missouri-based health information technology provider.
That overarching deal has only very general requirements and does not specifically list encoding or clinical documentation improvement services or technologies, or at least doesn't refer to those services in the revenue cycle context, Nuance said. Nuance also claimed that its contacts with the VA — which it has not identified — said the requirements in the disputed task order would be competed separately.
But the VA's solicitation for the overarching indefinite delivery, indefinite quantity EHR deal both generally noted that it would encompass incidental needs and specifically noted that the chosen contractor would need to support revenue cycle reporting, which includes accurate coding of care provided to patients, the GAO said.
Also, the value of the disputed task order is less than 1% of the total value of the contract, meaning that a lack of specific description of the coding and clinical documentation improvement requirements in the context of revenue cycle reporting doesn't show that those requirements were outside the scope of the contract, according to the GAO.
And Nuance itself had admitted to months of — ultimately unsuccessful — negotiations with Cerner, trying to be selected as a subcontractor to provide some of the same services it has argued are outside of the scope of the EHR contract, which further undercuts its arguments, the GAO said.
Representatives for Nuance and for the VA did not immediately respond to requests for comment Wednesday.
The VA chose Cerner for its $10 billion sole-source contract in June 2017, seeking to both modernize its aging VistA EHR system, as well as to improve interoperability with the U.S. Department of Defense's own records system, also created by Cerner.
By using essentially the same system across the two agencies, it will be much easier for service members leaving the military to switch to the VA system, according to the VA.
In September testimony to Congress, VA officials said that initial implementation of the Cerner system should roll out to three initial test hospitals by October 2020, with a full rollout by 2025.
GAO attorneys Glenn G. Wolcott and Christina Sklarew participated in the preparation of its decision.
Nuance is represented by William V. Roppolo of Baker McKenzie. The VA is represented by in-house counsel Frank V. DiNicola and Kerry A. McGrath. Cerner, as an intervenor, is represented by David R. Hazelton, Dean W. Baxtresser and Joshua J. Craddock of Latham & Watkins LLP. The case is Matter of: Nuance Communications Inc., file number B-418106, before the U.S. Government Accountability Office.
--Editing by Breda Lund.
"Based on our review of the record, it is clear that the coding and [clinical documentation improvement] requirements of [the task order] are inherent to performance of the comprehensive EHR requirements," the GAO said in a Jan. 8 decision released Tuesday.
The disputed task order, issued in September and estimated at $19 million, covers the development and deployment of clinical documentation improvement functionality, intended to make sure the services provided to patients are captured properly and therefore can support the agency's "revenue cycle requirements," according to the decision.
Nuance, a software company based in a suburb of Boston that provides health information coding services for the VA under another contract, argued that the order should have been issued as a separate competition outside of the EHR contract awarded to Cerner, a Kansas City, Missouri-based health information technology provider.
That overarching deal has only very general requirements and does not specifically list encoding or clinical documentation improvement services or technologies, or at least doesn't refer to those services in the revenue cycle context, Nuance said. Nuance also claimed that its contacts with the VA — which it has not identified — said the requirements in the disputed task order would be competed separately.
But the VA's solicitation for the overarching indefinite delivery, indefinite quantity EHR deal both generally noted that it would encompass incidental needs and specifically noted that the chosen contractor would need to support revenue cycle reporting, which includes accurate coding of care provided to patients, the GAO said.
Also, the value of the disputed task order is less than 1% of the total value of the contract, meaning that a lack of specific description of the coding and clinical documentation improvement requirements in the context of revenue cycle reporting doesn't show that those requirements were outside the scope of the contract, according to the GAO.
And Nuance itself had admitted to months of — ultimately unsuccessful — negotiations with Cerner, trying to be selected as a subcontractor to provide some of the same services it has argued are outside of the scope of the EHR contract, which further undercuts its arguments, the GAO said.
Representatives for Nuance and for the VA did not immediately respond to requests for comment Wednesday.
The VA chose Cerner for its $10 billion sole-source contract in June 2017, seeking to both modernize its aging VistA EHR system, as well as to improve interoperability with the U.S. Department of Defense's own records system, also created by Cerner.
By using essentially the same system across the two agencies, it will be much easier for service members leaving the military to switch to the VA system, according to the VA.
In September testimony to Congress, VA officials said that initial implementation of the Cerner system should roll out to three initial test hospitals by October 2020, with a full rollout by 2025.
GAO attorneys Glenn G. Wolcott and Christina Sklarew participated in the preparation of its decision.
Nuance is represented by William V. Roppolo of Baker McKenzie. The VA is represented by in-house counsel Frank V. DiNicola and Kerry A. McGrath. Cerner, as an intervenor, is represented by David R. Hazelton, Dean W. Baxtresser and Joshua J. Craddock of Latham & Watkins LLP. The case is Matter of: Nuance Communications Inc., file number B-418106, before the U.S. Government Accountability Office.
--Editing by Breda Lund.
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