Cerner expands its reach in federal healthcare market with acquisition of IT consulting firm AbleVets

Health IT company Cerner announced a definitive agreement to acquire IT consulting and engineering firm AbleVets as a wholly owned subsidiary.

With the acquisition of AbleVets, the electronic health records (EHR) company is ramping up its technical expertise in developing and implementing IT solutions in the federal space. The Kansas City-based company said the acquisition gives it greater scale in the federal healthcare market.

The companies expect to complete the transaction in the fourth quarter. 

“AbleVets has been a trusted partner to Cerner and is providing critical support to our federal programs,” said Travis Dalton, president, Cerner Government Services, in a statement. “Integrating the team into our business is a natural next step of our relationship. We expect AbleVets’ technical expertise and execution in solving complex problems will accelerate Cerner’s success in providing integrated, seamless care for veterans, service members and their families.”

RELATED: VA launches Cerner EHR training program based on 'lessons learned' from DOD's MHS Genesis rollout

Cerner is under contract with both the Department of Veterans Affairs and the Department of Defense to roll out new EHR platforms across their care networks.

The contract with the VA is anticipated to cost $16 billion over a 10-year period. The Cerner EHR will replace the approximately 130 operational instances of VistA, currently in use across VA, and will be interoperable with the DOD system, according to VA.

The DOD signed a 10-year, $4.3 billion contract in 2015 with Leidos, Cerner and Accenture to build a new EHR to replace its Armed Forces Health Longitudinal Technology Application system. In 2017, DoD rolled out the first Military Health System (MHS) Genesis EHR at Fairchild Air Force Base in Washington followed by three other Washington sites.

The DOD health records system is now operational at four new military sites in California and Idaho in the second wave of its MHS Genesis rollout.

RELATED: VA signs $10B deal with Cerner, but implementation challenges still loom large

AbleVets, founded as a service-disabled veteran-owned small business in the Washington, D.C. area, will bring 350 professionals, many of whom are veterans, specialized in cybersecurity, agile engineering, analytics, and technology enablement to Cerner.

AbleVets' team has deep experience in delivering value to federal healthcare clients while reducing the time, cost and risk associated with IT modernization efforts, the companies said.

“I launched AbleVets to deliver health IT solutions that improve veteran health,” Wyatt Smith, M.D., founder and CEO of AbleVets, who served as an oncologist in the Navy, said in a statement. “By working with Cerner over the past year, we’ve been able to make important strides in laying the groundwork on our shared mission to transform care for those who served our country"

Dalton said teaming up with health technology companies that bring specialized industry expertise and capabilities—like AbleVets for the federal market—will help Cerner to drive optimal outcomes at an exceptional value for its clients and taxpayers.

RELATED: Lawmakers fear lack of governance of DOD-VA EHR project will derail progress

The DoD's initial launch of the new commercial EHR platform in the Pacific Northwest has not gone smoothly and was rife with problems, according to media and internal reports. A scathing report from DOD released in April 2018 said its MHS Genesis EHR is “neither operationally effective nor operationally suitable,” highlighting concerns that the system’s failures jeopardize patient safety.

MHS leaders recently said the system's initial challenges had been addressed, citing changes in training as a key factor. Project leaders also conducted rigorous testing, training and change management efforts during the initial rollout in the Pacific Northwest, DOD officials said.

The VA said it plans to roll out its new health records at hospitals in March 2020, but Politico reported that the EHR modernization project will be at least partially delayed

The latest plan, Politico reported citing internal sources, is to start the rollout in late March at a site in Spokane, Wash., while holding off implementation at two Puget Sound-area installations until October.