Recommendation: The Secretary of Veterans Affairs should direct the Chief Medical Director to require medical center directors to justify, as part of their contract proposals, that: (1) physicians who perform specialty medical services cannot be hired using conventional employment practices; (2) the quantity of services purchased and prices paid for them are reasonable; and (3) effective controls are in place to monitor contractors' performance.

Agency Affected: Department of Veterans Affairs

Status: Closed - Implemented

Comments: VA published a revision to its manual requiring that VA medical center directors certify that for proposed scarce medical specialists contracts: (1) physicians who perform specialty medical services cannot be hired using conventional employment practices; (2) the quantity of services purchased and prices paid for them are reasonable; and (3) effective controls are in place to monitor contractors' performance.

Recommendation: To assist medical centers and contract reviewers, the Secretary of Veterans Affairs should direct the Chief Medical Director to develop general guidelines for evaluating the reasonableness of quantities and costs of proposed services. The Chief Medical Director should direct reviewers to ensure that centers make all required changes for cases in which contracts are approved on a contingent basis.

Agency Affected: Department of Veterans Affairs

Status: Closed - Implemented

Comments: VA published a revision to its manual providing general guidelines for evaluating the reasonableness of quantities and costs of proposed services. The guidelines also provide that the medical center directors certify that all revisions contained in the VA Central Office review have been made. If all required changes have not been made the contract lacks the required Central Office approval and cannot be executed by the medical center. VA's Central Office is responsible for reviewing executed contracts to ensure that the required revisions have been made.