What GAO Found
GAO's work at four VAMCs found that these VAMCs did not always follow VHA requirements for documenting open-market purchases of surgical implants. Specifically:
- None of the four VAMCs fully complied with VHA requirements for obtaining waivers required for open-market purchases of surgical implants because they were focusing on other priorities or lacked awareness of the requirements, among other factors.
- None of the four VAMCs fully complied with additional VHA requirements for documenting open-market purchases that are part of a new process VHA implemented in fiscal year 2013 for surgical implant purchases above the Federal Acquisitions Regulation's micro-purchase threshold of $3,000 and below its simplified acquisition threshold of $150,000. VAMC and regional office officials attributed noncompliance mainly to insufficient VHA guidance and VA staff's inexperience in completing these requirements.
- Three of the four VAMCs did not comply with a VHA requirement pertaining to agreements with vendors that provided surgical implants to them on consignment. Under a consignment agreement, the vendor maintains vendor-owned items at the VAMC, and the VAMC purchases only the items actually used. A consignment agreement may be useful when the requirement for a surgical implant is immediate and it is not possible to predetermine which of several types or models are required. These agreements, which clinicians likely established to ensure timely access to implants, did not comply with a VHA requirement that consignment agreements must be authorized by a VHA contracting officer.
In addition, GAO found that VA and VHA's oversight of surgical implant purchases to detect and correct instances of noncompliance needs improvement. Specifically:
- Although VA and VHA have recently begun conducting oversight of surgical implant purchases over $3,000 to assess compliance with VHA's new requirements, VHA officials told us that they have not ensured that corrective action has been taken to address identified noncompliance because of poor communication between VA and VHA and insufficient staffing to follow up on identified issues. VA's Office of Acquisition and Logistics did not provide VHA with information on the VAMCs at which noncompliance was identified, according to a senior VHA official. The official also explained that VHA's policy is largely intended to be consultative in nature and that VHA's Procurement and Logistics Office is not sufficiently staffed to ensure that corrective action is taken.
- Moreover, VHA assesses each VAMC's performance on metrics established for surgical implant purchasing, such as the extent to which VAMCs purchased surgical implants from a national committed-use contract or obtained a waiver allowing clinicians to use an alternative item. However, as of November 2013, VHA did not have a policy governing how any identified deficiencies should be addressed and the corrective actions necessary for VAMCs and VHA's regional networks to take. Absent such a policy, the degree of monitoring and corrective actions taken varied among the four networks we visited. Network prosthetics officials at two of the four networks told us that they regularly monitored the results from VHA's assessments and took steps to ensure that VAMCs address identified deficiencies, such as correcting data-entry errors. In the other two networks that did not ensure that VAMCs address deficiencies, VHA's metrics identified a relatively high rate of noncompliance with surgical implant purchases from VA-negotiated national committed-use contracts. In one of these networks, this noncompliance included a high percentage of purchases missing serial numbers or lot numbers, which has potentially significant patient safety and cost implications.
Why GAO Did This Study
This testimony discusses issues related to GAO's work on the purchase and tracking of surgical implants at Department of Veterans Affairs (VA) facilities. VA's Veterans Health Administration (VHA) is one of the largest purchasers of surgical implants, which include biological implants, such as skin and bone grafts, and non-biological implants, such as cardiac pacemakers and artificial joints. VHA spent about $563 million on surgical implants in fiscal year 2012, an increase of 28 percent since fiscal year 2008. Surgeons and other clinicians at VA medical centers (VAMC) determine veterans' needs for surgical implants, request the implant of their choice for purchase, and perform the clinical procedures to implant the items. While VA has negotiated competitive contracts for a variety of implants, VAMCs or VHA's regional network contracting offices (NCO) can purchase a specific surgical implant requested by a clinician from the open market with appropriate clinical justification, rather than purchasing a similar item through a VA-negotiated competitive contract. Upon purchase, identifying information is recorded, such as the serial and lot numbers of the item, which can be used later to identify veterans who received a particular implant if one is recalled by a manufacturer or the Food and Drug Administration due to safety concerns.
At a May 2012 hearing of this subcommittee, concerns were raised about the extent to which VAMCs and NCOs purchase surgical implants from the open market without appropriate justification, as well as VHA's oversight of surgical implant purchases. This testimony will address the following two areas: (1) VAMC compliance with VHA requirements for documenting surgical implants purchased from the open market, and VA and VHA oversight of compliance with these requirements; and (2) VHA's ability to identify veterans who received an implant that is being recalled by the manufacturer or the Food and Drug Administration.
For more information please contact Randall B. Williamson at (202) 512-7114 or firstname.lastname@example.org.