The Department of Veterans Affairs (VA) is in line for a $5.4 billion funding increase in fiscal year (FY) 2026 under President Donald Trump’s proposed budget published on Friday, including a $2.17 billion increase for the agency’s Electronic Health Record Modernization (EHRM) program.
The proposed funding increase to support the EHRM program is notable, as many lawmakers and the Government Accountability Office (GAO) have recently criticized the agency’s lack of a reliable cost estimate for the program.
The EHRM program is supported by a contract with Oracle Health, and the VA’s initial cost estimate for the program was $16 billion.
However, after facing ongoing delays in deployment of the EHRM system, the VA requested an independent life cycle cost estimate on the program from the Institute for Defense Analysis in 2022, which said it totals $49.8 billion.
The VA has yet to provide an updated cost estimate after pausing new EHRM deployments in 2023 and spending almost two years in “reset” mode.
“VA’s EHRM effort is moving the department from a decades-old legacy system to a modern system that is interoperable with DOD and other Federal partners, as well as participating community care providers, allowing clinicians to easily access a veteran’s full medical history anywhere they seek care,” the proposed budget says.
“The secretary has made accelerated VA EHRM rollout – which had stalled under the Biden administration – a top priority effort,” it adds.
The VA announced an accelerated deployment schedule for the EHRM program earlier this year. The agency plans to deploy the program to 13 VA medical facilities in 2026.
So far, the agency has only deployed the new EHR system to six out of 164 VA medical centers.
Despite the overall budget increase envisioned for VA, the proposed budget also features a cut of $493 million from 2025 enacted levels for IT systems at the agency.
The White House said it has directed the Department of Government Efficiency (DOGE) to work with agency heads to improve the “quality and efficiency” of software and IT systems at the VA and other agencies.
“The budget protects VA’s core mission systems that deliver healthcare, benefits, and cemetery services to America’s veterans, while reducing spending on duplicative legacy systems and pausing procurement of new systems until VA and the U.S. DOGE Service team can conduct a full review,” the budget request says.