[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE HEARING ON H.R. 3497, H.R. 4245, A DRAFT BILL REGARDING
PURCHASE CARD MISUSE, AND A DRAFT BILL REGARDING THE MEDICAL SURGICAL
PRIME VENDOR PROGRAM
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
WEDNESDAY, MARCH 7, 2018
__________
Serial No. 115-49
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
35-386 WASHINGTON : 2019
COMMITTEE ON VETERANS' AFFAIRS
DAVID P. ROE, Tennessee, Chairman
GUS M. BILIRAKIS, Florida, Vice- TIM WALZ, Minnesota, Ranking
Chairman Member
MIKE COFFMAN, Colorado MARK TAKANO, California
BRAD R. WENSTRUP, Ohio JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American ANN M. KUSTER, New Hampshire
Samoa BETO O'ROURKE, Texas
MIKE BOST, Illinois KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine J. LUIS CORREA, California
NEAL DUNN, Florida KILILI SABLAN, Northern Mariana
JODEY ARRINGTON, Texas Islands
JOHN RUTHERFORD, Florida ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto
Rico
Jon Towers, Staff Director
Ray Kelley, Democratic Staff Director
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
JACK BERGMAN, Michigan, Chairman
MIKE BOST, Illinois ANN MCLANE KUSTER, New Hampshire,
BRUCE POLIQUIN, Maine Ranking Member
NEAL DUNN, Florida KATHLEEN RICE, New York
JODEY ARRINGTON, Texas SCOTT PETERS, California
JENNIFER GONZALEZ-COLON, Puerto KILILI SABLAN, Northern Mariana
Rico Islands
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
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Wednesday, March 7, 2018
Page
Legislative Hearing On H.R. 3497, H.R. 4245, A Draft Bill
Regarding Purchase Card Misuse, And A Draft Bill Regarding The
Medical Surgical Prime Vendor Program.......................... 1
OPENING STATEMENTS
Honorable Jack Bergman, Chairman................................. 1
Honorable Ann Kuster, Ranking Member............................. 3
Honorable Tim Walz, U.S. House of Representatives................ 5
Honorable Kathleen Rice, U.S. House of Representatives........... 7
Honorable Scott Peters, U.S. House of Representatives............ 8
Honorable McMorris Rodgers, U.S. House of Representatives........ 10
WITNESSES
Fred Mingo, Director of Program Control, Program Executive
Office, Electronic Health Record Modernization Program, U.S.
Department of Veterans Affairs................................. 9
Prepared Statement........................................... 24
Accompanied by:
Ricky Lemmon, Acting Deputy Chief Procurement Officer,
Veterans Health Administration, U.S. Department of
Veterans Affairs
John Adams, Director of Corporate Travel, Office of
Management, U.S. Department of Veterans Affairs
Katrina Tuisamatatele, Health Portfolio Director, Office of
Information and Technology, U.S. Department of Veterans
Affairs
Louis Celli, Jr., Director, Veterans Affairs & Rehabilitation
Division, The American Legion.................................. 12
Prepared Statement........................................... 26
Scott Denniston, Executive Director, National Veterans Small
Business Coalition............................................. 13
Prepared Statement........................................... 29
FOR THE RECORD
Ken Wiseman, Associate Director, National Legislative Service,
Veterans of Foreign Wars of The United States.................. 32
Congresswoman Cathy McMorris Rodgers............................. 33
LEGISLATIVE HEARING ON H.R. 3497, H.R. 4245, A DRAFT BILL REGARDING
PURCHASE CARD MISUSE, AND A DRAFT BILL REGARDING THE MEDICAL SURGICAL
PRIME VENDOR PROGRAM
----------
Wednesday, March 7, 2018
U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Disability Assistance
and Memorial Affairs,
Washington, D.C.
The Subcommittee met, pursuant to notice, at 2:02 p.m., in
Room 334, Cannon House Office Building, Hon. Jack Bergman,
[Chairman of the Subcommittee] presiding.
Present: Representatives Bergman, Dunn, Arrington, Kuster,
Rice, Peters, and Walz.
Also Present: Representative McMorris Rodgers.
OPENING STATEMENT OF JACK BERGMAN, CHAIRMAN
Mr. Bergman. Good afternoon. This hearing will come to
order. I want to welcome everyone to today's legislative
hearing on H.R. 3497, H.R. 4245, a draft bill entitled the
Veterans Affairs Purchase Card Misuse Mitigation Act, and a
draft bill requiring the Secretary to carry out the Medical
Surgical Prime Vendor program using multiple prime vendors.
Before we begin, I would like to ask unanimous consent for
our colleague Conference Chair Cathy McMorris Rodgers to sit on
the dais and participate in these proceedings when she arrives.
Also, the Veterans of Foreign Wars has informed us that
they will provide a statement regarding the hearing, so I ask
unanimous consent that it be entered into the record.
Without objection, so ordered.
Mr. Bergman. I am also happy to welcome Ranking Member Walz
as an ex officio Member of the Subcommittee. Glad you are with
us.
Our first two pieces of legislation this afternoon relate
to VA's Electronic Health Records Modernization Program. Mrs.
McMorris Rodgers will present her legislation, H.R. 3497, upon
her arrival.
First, I would like to briefly discuss a bill that I am
proud to sponsor with Chairman Roe, as well as Ranking Members
Walz and Kuster, H.R. 4245, the Veterans Electronic Health
Record Modernization Oversight Act of 2017.
The EHRM program is a potential game changer for VA. If
carried out successfully, VA and DoD can finally achieve a
seamless lifetime medical record, eliminate the need to fax
records back and forth with community providers, and break the
ruinous cycle where legacy systems cost of maintenance consumes
nearly the entire IT budget.
EHRM is as transformational as it is big and expensive, and
Congress needs to keep a watchful eye on it. H.R. 4245 requires
VA to provide us with key contracting documents and those that
indicate the program's health. It also requires VA to notify
Congress of any significant schedule slip, cost increase, loss
of data, privacy breach, or other adverse contractual event.
Finally, it ensures that my colleagues and I get the
information we actually need in a timely fashion, while not
directing the VA to spend time and money producing unnecessary
reports or duplicative documentation.
Next, I intend to sponsor the Veterans Affairs Purchase
Card Misuse Mitigation Act, which is currently in draft form
with Miss Rice, Mr. Bost, and Dr. Dunn. This will would require
the Secretary to revoke the purchase card or purchase card
approval authority for any employee who is found to have
knowingly misused the purchase card.
Huge sums of money flow through purchase cards in the VA,
about $4 billion a year as of 2015 the last time GAO did a
review, and the volume of spending is poised to grow much
larger given that the most recent NDAA increased the micro-
purchase transaction limit from $3,500 to $10,000.
This Committee heard a great deal about purchase card
misuse in 2015; huge amounts of unauthorized commitments were
alleged. The Inspector General recently completed his
definitive report on the matter and found that the real amounts
to be much higher than originally thought. Unauthorized
commitments estimated at roughly $520.7 million for
prosthetics, including purchases worth $256.7 million, for
which VA may have paid unnecessarily high prices.
While most of the purchases were necessary supplies that
were delivered, we will never know how much money was wasted
because a lack of documentation makes drawing firm conclusions
frustratingly difficult.
VA tightened its internal controls in response, but we
still hear of troubling incidents. The Inspector General
recently found widespread split purchasing in the New Jersey
Health Care System, more concentrated splitting in VISN 15, and
unauthorized commitments and subterfuge about the destruction
of records at the VA contracting office in the Bronx.
A few weeks ago, the Office of Special Counsel revealed an
apparent scheme by two employees at the Bedford, Massachusetts
Medical Center to enrich a family member through purchase card
orders. And this very morning the IG released his final report
on the Washington, DC Medical Center, finding purchase card
misuse, among many other distressing incidents of
mismanagement. In DC, 151 people held 283 purchase cards.
Most of the purchase card holders are outside the typical
chain of command and their usage cannot be properly tracked.
The IG highlighted many examples of gratuitous waste and
one example of outright graft, which I would like to point out
that the VISN did discover and address.
This bill attempts to head off purchase card misuse as the
micro-purchase threshold increases. As soon as a bona fide
investigation determines someone has knowingly misused a
purchase card, the card is taken away. The Department can
pursue the appropriate disciplinary penalty according to
existing policies, but in the meantime the potential for future
misuse is eliminated. It is as simple as that.
Finally, I intend to sponsor legislation with Mr. Peters,
Mr. Banks, and Dr. Dunn to direct the Secretary to continue
carrying out the Medical Surgical Prime Vendor Program using
the existing system of regional prime vendors.
At our hearing in December, Committee Members
overwhelmingly expressed the view that it would be a mistake
for VA to move to a model with one national prime vendor that
not only distributes the medical and surgical supplies, but
also creates the formulary on VA's behalf and selects the
suppliers. I understand VA heard the same message from industry
and now does not intend to pursue that model. So I hope to get
additional clarity in today's questioning on how the VA still
opposes this bill; however, I will defer to my colleagues to
elaborate on the draft legislation.
I now yield to Ranking Member Kuster for any opening
statement and remarks on today's legislation she may have.
OPENING STATEMENT OF ANN KUSTER, RANKING MEMBER
Ms. Kuster. Thank you, Chairman Bergman, for holding this
hearing, and I would like to welcome Ranking Member Walz and,
when she arrives, our esteemed colleague Congresswoman McMorris
Rodgers, here to advocate on behalf of the bipartisan
legislation that we have before us.
I also want to welcome our witnesses, who are here to
provide thoughtful testimony on how we might improve the
legislation to ensure that it has the intended effect, which is
helping to improve the Veterans Administration and the lives of
veterans.
I am proud of the bipartisan oversight and legislative work
that we do on this Committee. This Subcommittee serves as a
model for how Congress should work, and I should say our Full
Committee serves as a model.
Before I turn my remarks on the four bills we have on the
agenda today, I do want to take a moment to address the IG
report that was released just this morning on the DC VMAC,
Washington, DC, and Secretary Shulkin's announcement this
morning that VISNs 1, which is New England, 5, which is DC, and
22, the Desert Pacific Health Care Network, will be placed into
receivership and Brigadier General Gamble will oversee their
restructuring.
This is a critical moment. For those of us in VISN 1 in New
England, we have spent the last year-plus working with
Secretary Shulkin and the leadership at the VA on some very
troubling, disturbing allegations of mismanagement and veterans
that had been harmed, not just in Manchester, New Hampshire,
where the VA Health Center that I have been working with and
vets that I represent, but also Bedford, Massachusetts, and our
colleague Mr. Poliquin has been involved with Maine.
I know that my colleagues from California have had issues
in VISN 22 and the whole Committee is aware of the issues in
VISN 5.
The DC IG report found that leadership at the medical
center, the VISN, and VA Central Office knew about the supply
chain and logistics problems at DC VAMC and did not take
appropriate steps. The Desert Pacific network includes the
Phoenix VA, where we first learned about the secret waiting
list that ultimately led to the Choice Program. And in New
England, where my constituents receive care, the hospital
director at the Manchester VAMC was removed because significant
patient care and facility infrastructure concerns were not
addressed.
So I would request that our Oversight and Investigation
Committee or the Full Committee hold a hearing on leadership
failures at the three networks at VA Central Office and that we
continue to provide oversight on the plan being developed for
restructuring of these organizations, including, as we will
discuss today, the VA procurement investigation.
At least seven Members of our Committee represent districts
within these three networks and I am sure that many more of our
Members have constituents who receive their care there.
Now, returning to the legislation before us today, we
address of-the-moment issues for our Subcommittee. Ranking
Member Walz's Veterans Electronic Health Record Modernization
Oversight Act will ensure that this Committee receives the
information we need to conduct proper oversight of this 10-
year, $16 billion project. I think I speak for all of us when I
say we have been advocating for an interoperable electronic
health record since we were first elected to Congress. Finally,
finally, the solution is in sight.
When Secretary Shulkin signs the contract, and we believe
that that will happen this month, veterans will finally have
the same health care records as the DoD, a modern electronic
health record that will meet their health care needs.
The next challenge will be to ensure the VA stays on
schedule with its installation and implementation, stays within
the budget, and causes the least amount of disruption to
patient care. And I know Dr. Roe, our chair, has been
admonishing all of us to understand that this will take time
and it will be a transition, but it is important that we
minimize the disruption.
Our job here is to keep the VA on track and Ranking Member
Walz's bill will give us the tools and the information to do
just that.
Chairman Bergman and Congresswoman Rice's draft legislation
to address purchase card abuse is also much-needed legislation
that I hope this Committee will send to the floor without
delay.
Yesterday, I publicly revealed my request to Secretary
Shulkin to remove Dr. Mayo-Smith as leader of the VA New
England Health Care System and he, Secretary Shulkin, did
announce this morning that Dr. Mayo-Smith will retire. The
issues our Committee has investigated in Bedford and Manchester
demonstrate the need for greater accountability and improved
leadership.
Purchase card abuse continues to be an issue and just last
month we learned in an Office of Special Counsel report that an
employee at the Bedford, Massachusetts VA medical facility
abused a purchase card to buy supplies from a family member's
business, as my chair has acknowledged. We also learned that
this employee was authorized to use a purchase card even after
being disciplined for misuse. This is unacceptable and that
employee got what amounted to simply a slap on the wrist.
Employees who misuse purchase cards should be held
accountable and should be prevented from being a purchase card
holder or authorizing official. This legislation will ensure
that taxpayer dollars are protected from purchase card misuse.
Employees misusing VA purchase cards cannot be trusted as good
stewards of taxpayer dollars and I support the legislation
tackling this issue.
And, finally, Congressmen Bergman, our chair of the
Subcommittee, and Peters have written legislation to ensure VA
fixes its Medical Surgical Prime Vendor formulary.
As we heard from the GAO last November, clinicians who
treat veterans should be at the center of the decision-making
of which supplies should be included in the formulary. This is
not a decision that should be outsourced to vendors who have no
experience treating patients. This idea to outsource the
formulary development suggested by VA goes against best
practices in the private and non-profit health care industry.
This legislation should ensure that VA follows best practices
and sticks to a timeline, so that VA facilities and vendors
have a predictable, functional medical surgical supply system.
Thank you, Chairman Bergman, and I yield back.
Mr. Bergman. Thank you, Ranking Member Kuster.
And given the Secretary's announcement today regarding
adverse actions against three VISN directors, I would be happy
to continue working with the Ranking Member and the rest of the
Subcommittee to get answers.
I sent a letter with Ranking Member Kuster last month to
the VA, which we have yet to receive a response. So we are
going to continue working on that.
We will now hear from Ranking Member Walz, speaking in
support of H.R. 4245, the Veterans Electronic Health Record
Modernization Oversight Act of 2017.
Ranking Member Walz, you are recognized for 5 minutes.
OPENING STATEMENT OF TIM WALZ
Mr. Walz. Well, thank you, Chairman. Thank you all for
being here, but thank you, Chairman, for the courtesy of
speaking on this, and to the Ranking Member.
Before we start, I would like to say I thank you, Chairman,
for backing. I fully support Ranking Member Kuster's call for a
hearing or whatever is necessary on the leadership failures in
New England, Capital Region, and Desert Pacific Regions. I
believe Secretary Shulkin has taken the right steps of removal,
but we need to exercise our oversight authority, which this
Subcommittee has proven up to that task.
We also need to keep pressure on the VA to improve DC VA's
supply chain management capabilities. We visited about a year
ago following the interim report and pushed for more hiring of
logistics and HR staff, cleaning of supply spaces that ensure
at least enough supplies to prevent further delays. I want to
know and praise the dedicated workers and providers who did
ensure that no patients were harmed despite incompetent
leadership and supply chain failures at the hospital. Now the
VA must work to ensure that every single one of their 40
recommendations of the IG report are followed through and VA is
held accountable.
With that, I appreciate the opportunity to speak on H.R.
4245, the Veterans Electronic Health Record Modernization Act.
I, along with the Chairman, the Ranking Member and Chairman Roe
of the Full Committee, introduced this to ensure that we
continue to exercise one of our most important functions,
oversight.
And the Ranking Member was right. I was looking back. In
March of 2007, sitting right down here, I made the case of an
interoperability between records was absolutely critical. I
think every one of us who has come here, matriculated in here
has said that, and one of the first things we do of getting
there. In June of 2017, and many of us will remember that day,
the Secretary answered this call and announced VA's intent to
adopt the same EHR currently utilized by Department of Defense.
Now Congress and veterans are eager to see the implementation
of this new system.
Frankly, the future successful delivery of VA and
community-based health care services to veterans really rests
on the successful implementation of this record management
system. In order to deliver on promises that we have made to
veterans in regard to accessibility and quality of care, we
must ensure VA has every resource necessary to the development
of this new system. However, Congress must be able to track
these resources and the impact of their progress. In order to
be good stewards of the taxpayer money, we must be able to
carry out those oversight duties.
This legislation that we are going to talk about simply
requires VA to share documents, plans, reports, and information
surrounding the adoption and implementation of the new EHR
management system. Additionally, the legislation will require
VA to notify Congress quickly if there is any significant
adverse event such as a cost increase, schedule delay, or
breach of security. That is why I really appreciate the support
of H.R. 4245 and its inclusion in today's discussion.
I also appreciate the VA's willingness to continue to work
with our office to ensure this legislation is clear,
reasonable, effective, and can be implemented the way it needs
to be. Our intention is not to micro-manage the implementation
of this record. Our intent is, is to make sure on something
this big and this costly and this important that there is
ownership for everyone; that the VSOs are included, which I am
glad to see Lou is at the table, this is going to be critical.
And I think the Chairman is exactly right. He brings a wealth
of knowledge, he has implemented these in the private sector,
having watched a large medical institution like the Mayo Clinic
institute an upgrade to a new electronic medical record.
We need to keep expectations high of what we are going to
achieve, but realistic in that this is going to take time and
there are going to be things along the way that need to be
addressed. I think the biggest thing this legislation is, is no
surprises, Congress being informed, let us know how things are
going, so that we can inform veterans.
So, thank you, Chairman and Ranking Member, and I yield
back.
Mr. Bergman. Thank you, Ranking Member Walz.
Next we will hear from Miss Rice speaking in support of the
draft Veterans Affairs Purchase Card Misuse Mitigation Act.
Miss Rice, you are recognized for 5 minutes.
OPENING STATEMENT OF KATHLEEN RICE
Miss Rice. Thank you, Mr. Chairman.
I would like to thank Chairman Bergman and Ranking Member
Kuster for including the draft bill regarding purchase card
misuse on today's legislative hearing agenda for the
Subcommittee on Oversight and Investigations. I would also like
to thank all of the witnesses who are here today for your
testimony and for sharing your views on the draft legislation.
I appreciate the opportunity to join Chairman Bergman in
introducing this important piece of legislation as the lead
Democratic sponsor. This bill would prohibit employees at the
Department of Veterans Affairs who are found to have knowingly
misused VA purchase cards from serving as purchase card holders
or approving officials. I believe this legislation is necessary
to prevent any future misuse of purchase cards and will provide
greater accountability within the VA.
Now, in May of 2015, this Subcommittee held a hearing on
waste, fraud, and abuse in the VA's purchase card program,
during which alarming testimony was presented about a lack of
internal controls at VA that had led to misuse of taxpayer
funds through the purchase card program. During the hearing,
former Subcommittee Chairman Coffman and I requested that the
VA Office of Inspector General review allegations of
unauthorized commitments at a VA facility in my home state, New
York, in the Bronx.
In reviewing these allegations, the VA OIG determined that
the purchase card program manager erroneously reported
approximately $54.4 million of contract purchases in fiscal
year 2011 and 2012, because the contract manager did not
provide oversight or ensure proper implementation of the
required Federal procurement data system reporting.
VA OIG also identified 11 unauthorized commitments totaling
about $457,000 in improper payments for prosthetic purchases
that exceeded the warrants of the purchasers.
Purchase card misuse continues to be a problem at VA
facilities. In late January of this year, the Office of the
Special Counsel released a report finding that a VA employee at
a medical center in Massachusetts had misused a purchase card
to make nearly $1 million in improper purchases. Recent
examples such as this reveal a need for legislation that will
support effective oversight of the purchase card program and
help to increase accountability at the VA.
I thank Chairman Bergman for his leadership on this bill to
address such cases of purchase card misuse that harm the public
trust that VA is properly executing its duties. As Members of
the Committee on Veterans Affairs, it is our responsibility to
take allegations of waste, fraud, and abuse seriously, and
ensure that taxpayer funds are not misused to the detriment of
our Nation's veterans.
Thank you, Mr. Chairman, and I yield back.
Mr. Bergman. Thank you, Miss Rice.
Now we will hear from Mr. Peters, speaking in support of
the draft medical surgical prime vendor legislation.
Mr. Peters, you are recognized for 5 minutes.
OPENING STATEMENT OF SCOTT PETERS
Mr. Peters. Thank you very much, Mr. Chairman, and thanks
to Ranking Member Kuster. And thanks also to Mr. Banks in
particular for working with me to improve the Medical Surgical
Prime Vendor Program, including the bill we are considering
today.
Last November, Mr. Banks and I hosted a successful
roundtable with the VA and medical device companies to get
feedback on the MSPV Program. We kicked off a good discussion
and today we are continuing the conversation to help this
program on track with all stakeholders at the table.
This bill will require the VA to award contracts to at
least two regional prime vendors for medical supplies, a great
first step to improve the MSPV Program by fostering
transparency and creating competition to drive prices down. It
is also critical that we have doctors, nurses, and other
medical professionals advising us on which supplies and devices
are needed to create a formulary, so the VA can provide proper
care. Ultimately, we want to help the VA to be a better
business partner; we know it wants to be a better business
partner. We want to give veterans the best treatment by
ensuring we get the right people at the table to make these
clinical decisions.
I look forward to working on this bill with my colleagues
and for further discussions. And, with that, Mr. Chairman, I
yield back.
Mr. Bergman. Thank you, Mr. Peters.
Well, Mrs. McMorris Rodgers is en route, but since she is
not here yet, what we will do is we are going to start. I will
do the introduction of the panel and then we will see if she
shows up by that time, but the point is, when she arrives, we
will stop what we are doing at that point and hear from her.
So, you know, at this point I would like to now welcome the
Members of our panel who are seated at the witness table. With
us today from VA we have Mr. Fred Mingo, Director of Program
Control for the Electronic Health Record Modernization Program.
He is accompanied by Mr. Ricky Lemmon, who is the Acting Deputy
Chief Procurement Officer for the Veterans Health
Administration.
He is also accompanied by Ms. Katrina Tuisamatatele--I
think I got close--and her role is the Health Portfolio
Director for the Office of Information and Technology.
Also accompanying Mr. Mingo is Mr. John Adams, Director of
corporate Travel in the Office of Management, seated back
there.
And also on the panel we have Mr. Louis Celli, Director of
the Veterans Affairs & Rehabilitation Division at The American
Legion. Finally, we have Mr. Scott Denniston, the Executive
Director of the National Veterans Small Business Coalition.
Mr. Mingo, you are recognized for 5 minutes.
STATEMENT OF FRED MINGO
Mr. Mingo. Good afternoon, Chairman. Chairman Bergman,
Ranking Member Kuster, and Members of the Committee, thank you
for this opportunity to present VA's views on pending bills
before the Committee.
Joining me today are Ms. Katrina Tuisamatatele, OIT; Mr.
John Adams, OM; Mr. Ricky Lemmon, VHA; who can speak more
specifically about legislation in their area.
The intent of H.R. 3497 is to provide veterans access to
their personal medical history, enabling them to share their
medical records with VA and community providers. This
legislation directs the Secretary to carry out a pilot program
establishing a secure, portable medical records storage device.
VA does not support this legislation due to a number of
challenges.
First, doctors have been reluctant to accept plug-in
electronic devices from patients because of network security
and compatibility issues with electronic health records.
Second, even with a portable storage device, veterans may not
receive a copy of their most current medical record. Depending
upon when files are loaded into the device, it may not
represent the complete health record, including important
doctor's notes or test results ordered from a previous visit.
Lastly, this legislation would take resources away from the
VA's current efforts to establish a single electronic health
record that is interoperable with DoD and community providers.
VA supports providing veterans access to their medical
records and data, and believes that this legislation would not
achieve that outcome.
H.R. 4245 requires the VA to submit several project
management documents related to the Electronic Health Record
Modernization Program. VA supports this legislation and
believes transparency is important to the success of the EHRM
Program. The EHRM Program Executive Office would like to work
with the Committee to develop a mutually agreeable timeline to
brief staff on these project management documents. We are
committed to providing quality and accurate project management
documents to the Committee.
The draft purchase card bill directs the Secretary to
prohibit employees found to have knowingly misused a VA
purchase card from further serving as a purchase card holder or
approving authority. VA supports the draft bill, as it would
enhance the Department's efforts to reduce potential fraud,
waste, and abuse with the VA charge card program. In addition,
it would reduce charge card misuse and minimize costly
reconciliation when unauthorized commitments are identified.
VA believes this legislation will support sound charge card
program oversight and encourage appropriate staff to strictly
adhere to purchasing requirements as outlined in VA financial
policy.
Lastly, the draft Medical Surgical Prime Vendor bill would
statutorily define the structure of VA's MSPV Program and the
number of items provided in its formulary. VA opposes this bill
for a number of reasons.
First, Congress has already provided and the Federal
Acquisition Regulation has already implemented suitable tools
for VA to make sound business decisions in developing the MSPV
Program. Secondly, agencies are required to conduct market
research as part of their acquisition-planning efforts. VA has
a further requirement to conduct additional market research to
fulfill our mandate under the Veterans First Contracting
Program. This market research enables VA to structure
acquisitions appropriately based on the number and types of
vendors available, the geographic areas they serve, and the
need to ensure supply chain availability.
The current MSPV structure is based on a judgment call to
apply the criteria provided by Congress and the FAR Council.
Legislation that stipulates the MSPV structure eliminates VA's
ability to change and develop according to market conditions.
Also, legislating the number of formulary items to be
contracted within arbitrary timeframes could have unintended
consequences.
Mr. Chairman, this concludes my opening statement. We are
happy to answer any questions from you or Members of the
Committee.
Thank you.
[The prepared statement of Fred Mingo in the Appendix]
Mr. Bergman. Thank you, Mr. Mingo.
And we will now hear from Mrs. McMorris Rodgers, who has
just joined us, speaking in support of H.R. 3497, the
Modernization of Medical Records Access for Veterans Act of
2017.
Mrs. McMorris Rodgers, you are recognized for 5 minutes.
OPENING STATEMENT OF CATHY MCMORRIS RODGERS
Mrs. McMorris Rodgers. Thank you, Chairman. I appreciate
you making the time.
I was on my way over and I was reading ``Political
Playbook,'' the Stars and Stripes article about what was just
uncovered at the Department of Veterans Affairs here in DC, but
what really caught my eye was it talks about more than 1300
boxes containing veterans' personal health and identification
information were found unsecured in a warehouse, the hospital
basement in a trash bin, according to the report. Millions of
dollars were spent without the controls to determine whether
the expenses were necessary.
So I want to just start by thanking the Chairman and thank
the Ranking Member for holding this important hearing to
address a fundamental need that we have within the VA for
comprehensive medical records for the veterans. Every day, I
hear from veterans in Eastern Washington who are in desperate
need for help, and yet so often they feel like when they
contact the VA that they are more of a burden than actually
having the red carpet rolled out to them.
And sometimes I hear this especially as it relates to
obtaining as simple as your mere medical record. I have even
heard from providers in the community that I represent who have
been frustrated to the point of tears because they are unable
to treat veterans because the patient cannot obtain their own
medical records. Some veterans have waited more than 2 years to
simply get their medical records from the VA.
So this legislation that is before you and I ask for your
consideration is simply provides a commonsense, off-the-shelf,
bipartisan solution to the problem. It is a pilot project and
it directs the Secretary of VA to establish a secure, patient-
centered, portable medical records system that would allow
veterans to have access to their own comprehensive medical
records.
As with most things in the VA, this is not an issue where
the wheel must be reinvented, this technology already exists in
the private sector. For example, VYRTY. Now, they are a company
based out of Washington State, but they have developed a
secure, offline data repository with end-to-end encryption and
remote record completion.
We have discussed the security concerns that some may have
in conversations with the VA Office of Information and
Technology, and this Committee, and while these concerns would
be valid in other scenarios, the technology that exists and
that is in use today is secure and is HIPAA-compliant. It is
compatible across all electronic health care systems, including
Cerner, and is encrypted end-to-end.
The fact is, it is in use today and it does not make
doctors resistant to accepting plug-in electronic devices from
patients.
With the technology that is currently deployed, patients
have a current copy, the most up-to-date version of their
medical records. It is as simple as putting it on a chip that
is then portable. Specifically, one of the most important
aspects of VYRTY's technology is that they perform record
completion. When a patient leaves his or her provider, they are
leaving with the most up-to-date medical record information; it
is updated immediately.
While the VA Department gives veterans access to the Blue
Button Initiative through My Healthy Vet, this puts the burden
on the veteran to be responsible for downloading, printing, and
bringing their most up-to-date record to their doctor. With
VYRTY's technology, the veteran and the provider all have the
information on a chip for easy access.
There have also been concerns raised about the Application
Performing Interfaces regulations put forth by Health and Human
Services. First of all, the VA is not regulated by HHS and
VYRTY's technology is already in use today; therefore, it is
already up to date and in line with current regulations. It has
the capability to be integrated directly and is already
supporting direct data feeds in their deployments.
I am disappointed that the VA has chosen to oppose this
legislation, that they have chosen to focus on the challenges
rather than the opportunity here to offer our veterans high-
quality care. Will there be challenges? Yes. But you know what?
That shouldn't stop us. It hasn't stopped Americans in the past
and it shouldn't stop us today.
My staff and I have held several meetings with the VA's
Office of Information and Technology where legislation was
discussed, where VYRTY was brought in to demonstrate their
technology, and where draft legislation was sent to the VA
before introduction for comments and concerns. Additionally, we
have in writing that the Office of Information and Technology
was supportive of this legislation. In the VA's words, ``This
looks good to us.''
What this bill is proposing is a simple, commonsense, off-
the-shelf, readily available solution to a persistent problem.
And while I am pleased that the Secretary is serious about
modernization of the EHR system, their approach, not only is
the VA Cerner contract currently paused, the implementation
period is 10 years.
Since I came to Congress in 2005, the budget for VA has
doubled twice, has nearly tripled. It went from 40 to 80
billion, and now 80 billion to 160 billion. The VA has one
mission, to serve our veterans, and I fear too often that the
veteran is getting lost in all of this and we make it too
difficult for them.
So, I thank you for your consideration of this legislation
and I just ask that the remainder of my statement be read into
the record.
Thank you.
Mr. Bergman. Without objection, so ordered.
Thank you, Mrs. McMorris Rodgers.
Next, we are going to hear from Mr. Celli. You are now
recognized for 5 minutes.
STATEMENT OF LOUIS CELLI, JR.
Mr. Celli. The American Legion is proud to offer our
position on the four bills being considered today and I will
briefly touch on them before I move toward a discussion on the
future of the electronic health care records project that ties
all of these bills together.
Chairman Bergman, Ranking Member Kuster, and distinguished,
dedicated defenders of veterans who proudly serve on this
Committee, and on behalf of Denise Rohan, the National
Commander of the largest Veterans Service Organization in the
United States of America, representing more than two million
dues-paying members, and combined with our American Legion
family, whose numbers exceed three and a half million voters
living in every state and territory in America, it is my duty
and honor to present the The American Legion's position on the
bills being discussed here today.
The American Legion is unable to support the purchase card
draft legislation that congressionally directs VA employee
behavior and discipline. We expect the Department to enforce
and follow the statute and policies that are currently in place
when employees misuse their authority and knowingly put
taxpayer dollars at risk. We fully expect the VA to make
management decisions and use their staff in a manner that is in
keeping with prudent and judicious behavior. And when that
behavior breaks down, we look to the VA to use the authority
that this Congress has already given the Secretary to hold
employees and managers accountable.
We do support the other draft legislation being discussed
today that would direct VA to compete prime vendor contracts,
because we believe that it will assist VA with ensuring that
more prime vendor contracts go to veteran-owned firms. The
Department of Veterans Affairs serves veterans and veterans
should be given first right of refusal serving their community,
provided that the services are on the same or greater quality
and that the price is competitive. This theme guides all of The
American Legion's policy recommendations regarding VA
contracting programs.
I will dedicate the remainder of my time to discussing the
VA Electronic Health Care Record Program and the bills that
address modernizing VA's primary IT infrastructure program.
The American Legion is unable to support H.R. 3497, the
Modernization of Medical Records Access for Veterans Act of
2017, not because we believe that the goal is off-base, but
because we believe that this and so much more is already
incorporated into the pending EHR contract that the Department
is getting ready to memorialize with the Cerner Corporation. As
such, The American Legion supports H.R. 5254, but only insofar
as it applies to the Cerner agreement and deployment of that
EHR program.
The contract that the VA has negotiated with Cerner
Corporation will fundamentally change the course of American
medical history by providing Government standards for
electronic health record communication and transferability,
health maintenance, patient access, supply chain management,
consults, follow-ups, and much, much more.
The Department of Veterans Affairs and the Department of
Defense are setting the stage for governmental interoperability
that is poised to eventually become the national standard.
Almost everything VA does from this point forward will affect
and be affected by this platform, and replacing VISTA and AHLTA
are just the beginning.
From here on out, this Committee, as well as the Senate
Committee on Veterans Affairs and the House and Senate Armed
Services Committee, are going to have to work together to
ensure that uniformed American servicemembers and their
families are not only provided with a safe and effective
transition from DoD to post-service medical care, but that
their access to care at VA and in the community are all well-
coordinated.
This is the direction that the Committee has directed VA to
take. It is long overdue, and this is the direction that the
American Legion champions, and this is the project that
Secretary Shulkin has led, and is leading to completion.
We, the veteran community and this Committee, are at a
critical juncture in time. We have a secretary who is under
fire by ideologues who oppose progress, and a Congress, and a
community that supports and appreciates the work that he has
done on behalf of more than 20 million veterans. Now is not the
time to be silent, and I just hope that all--and now is not the
time to be silent and just hope it all works out okay.
Now is the time to step up, now is the time to be heard,
and now is the time to join the Secretary and be part of this
historic change at the Department of Veterans Affairs and set
the stage for the largest modernization of medical coordination
in American history. Thank you, and I look forward to answering
any questions that you may have.
[The prepared statement of Louis Celli, Jr. appears in the
Appendix]
Mr. Bergman. Thank you, Mr. Celli.
Mr. Denniston, you are now recognized for five minutes.
STATEMENT OF SCOTT DENNISTON
Mr. Denniston. Good afternoon, Chairman Bergman, Ranking
Member Kuster, and distinguished Members of this Subcommittee.
On behalf of the members of the National Veterans Small
Business Coalition, I sincerely appreciate the opportunity to
discuss the proposed pieces of legislation.
The National Veterans Small Business Coalition is the
largest non-profit trade association representing veterans and
service-disabled vets in the Federal marketplace as prime and
subcontractors. And I request that my remarks and the
attachments be made part of the record.
I would like to first address H.R. 3497 and H.R. 4245
dealing with the veteran electronic health records. We believe
H.R. 3497 to allow veterans to use a portable medical record
storage system is good news for veterans as it allows easier
access to their own personal health records. H.R. 4245 appears
to address Congress' concerns about the Secretary's
announcement of the award to Cerner Corporation for the new
electronic health care record.
Our concern with this contract is that the VA is taking a
very minimalistic approach to providing subcontracting
opportunities for small businesses, including veteran and
service-disabled vet small businesses. VA is only requiring the
awardee to meet a minimum goal of 17 percent of subcontracting
to small business, 5 percent to service-disabled vets, and 7
percent to veterans.
And we know historically that information technology
contracts generally provide greater opportunity for
subcontracting to small business. As an example, the 2018 goals
that the SBA has established with the Department of Defense for
subcontracting is 33 percent; Department of Energy, 42 percent;
Department of Homeland Security, 40 percent. So we think the VA
can do a lot more than what they are proposing.
Also, over the past ten years, the VA has never once
achieved its subcontracting goals and negotiated with the Small
Business Administration. Given VA's poor track record and the
lower goals accepted for this contract, we implore this
Committee to include in H.R. 4245 a provision requiring the
Secretary of Veterans Affairs to report to Congress on a
quarterly basis the accomplishments against the small business
subcontracting goal to include subcontract awards to veteran
and service-disabled vet businesses.
Next, I would like to address the draft bill regarding
employees found to knowingly misuse VA purchase cards. We are
in support of the draft. Abuses of purchase card has been
widespread, and we think this trend will only continue given
the fact that micro-purchase level is being raised from $3,500
to $10,000. But we have also found that many times these issues
arise due to poorly written policies and training on the part
of the VA acquisition leadership, not because of VA employees
are dishonest people. So we think that that needs to be
addressed as well.
The last draft bill you asked me to discuss directs the VA
Secretary to carry out Medical Surgical Prime Vendor Program
using multiple prime vendors. Before addressing the specifics
of the draft, I want to share with you our observations having
lived the current prime vendor program for the past two years
in numerous meetings with both Veterans Health Administration
and Strategic Acquisition Center leadership.
The current program is being driven for contracting
expediency not based on clinical input to improve veteran
patient care. There is little to no clinical input, in our
opinion. VHA and the SAC appear to work on conflicting
timeframes, there is no strategic plan, determining who is in
charge is almost impossible, and rules of engagement appear to
change on a weekly basis.
In the Fall of 2017 when we learned that the SAC intended
under MSPV 2.0 to award one contract for one prime vendor, we
asked what was the position that service-disabled vets were
going to play, and were told you are going to be
subcontractors.
Again, given the VA's responsibility--or accomplishments in
the last ten years when we asked, well, what is going to
change, and the VA response to us was, you just have to trust
us. Well, we do not trust VA. We do not trust VA to do what is
right for service-disabled vets when it comes time for
subcontracting. We also think that this is the way VA wants to
get around having to deal with the SBA non-manufacturer waiver,
which I know that this Committee is aware of.
So we have a number of issues with that. Back in October,
this Committee had a roundtable and invited a number of groups
to participate. And we provided the Committee eight specific
recommendations in a letter, and we think that those are still
very appropriate.
But one of the things that I do want to mention in the last
30 seconds that I have, is that to show that service-disabled
vets can be part of the solution as opposed to the problem--the
way that we know that VA looks at service-disabled vets now--
we, the National Veterans Small Business Coalition in
conjunction with one of our members, Veratics of Florida, is in
the process of developing, for the VA's use, an online ordering
platform, very similar to Amazon, for medical products all from
verified CVE small businesses so that we are going to be able
to give the VA a platform that will allow them to buy medical
products under the micro-purchase threshold from service-
disabled vets at prices much less than they are buying from the
prime vendors in the current process. Thank you.
[The prepared statement of Scott Denniston appears in the
Appendix]
Mr. Bergman. Thank you, Mr. Denniston.
The written statements of those who have just provided oral
testimony will be entered into the hearing record. We will now
proceed to questioning.
Ranking Member Kuster, you are recognized for five minutes.
Ms. Kuster. Thank you very much, Chairman Bergman, and I
appreciate all the testimony. I am going to start, you were
talking--the VA was talking about the Blue Button Initiative
for pre-existing program where veterans are able to access,
download, and print their own medical records. How does the VA
balance the benefit of access to the medical records through
the Blue Button Initiative against the costs of lessened
security that can result?
Mr. Mingo. Thank you for the question. I will make a
comment first because I am a veteran, I downloaded the blue
button, my record, and that is how I was really only able to
solve my access to my record when I was treated out in town in
a Choice related program.
Specifically for that contract, though, and that question,
I would like to turn it over to my colleague,
Ms. Katrina Tuisamatatle, who will talk on that area.
Ms. Tuisamatatele. Can you please repeat the last part of
your question regarding security? I did not quite catch that.
Ms. Kuster. Well, my question is just how do you balance
the security concerns with the simplicity and the access?
Ms. Tuisamatatele. So we meet all of the--we have to go
through a rigorous process to meet the security requirements.
Not only HIPPA but PII, PHI, and we make sure that those are--
we have security teams that actually come out before we give an
authority to operate. So for every single product we have, we
go through that process. It is you do not get an authority to
operate unless you have gone through and made sure that those
security measures are met.
Ms. Kuster. Great. Thank you very much.
Ms. Tuisamatatele. Thank you.
Ms. Kuster. This is, again, for the VA on H.R. 4245, again
about the veterans electronic health care record modernization.
Why do you believe that the deadlines and verbiage in H.R. 4245
should be altered? And, should we incorporate your proposed
deadlines, how confident are you that the VA will fully comply
with the legislation?
Mr. Mingo. Thank you. We were establishing the program
office now for oversight of the actual contract. We have
negotiated with Cerner for our contract, we have spent a lot of
time in that area. We know these are typical documents that we
will put in place to manage a large project. They actually take
a lot of time and they take coordination with the Cerner
Corporation as well with some of what we are doing in those
oversight documents.
This is a large-scoped project. When the Secretary signed
the determination and finding, and announced it back in June,
at that phase where we would start negotiating with a vendor, a
lot of these documents would have already been prepared, and
they would have taken time.
When that document--when that was announced, there were
four of us in VHA and two in OIT that knew that news was
coming. There is a lot of people that we need to put in place,
and structure, and on organization to put in place to implement
and oversee this program. It just takes us time to pull those
together.
Ms. Kuster. So if we were to incorporate your deadlines,
your proposed deadlines, how confident are you that the VA will
fully comply?
Mr. Mingo. I am very confident that we would be able to
meet those. And some we will have ahead of time, others we
would have that are going to just take longer. There is a lot
of documents (indiscernible).
Ms. Kuster. And back to the American Legion. On this same
bill, your testimony conveys general opposition to legislation
that might impact VA's current efforts to adopt the Cerner
electronic health record. Do you have any concerns specific to
this bill that we should be keeping in mind if it advances to
markup?
Mr. Celli. So the first thing is we, you know, we
completely support the Cerner project. We have been out there
to the facility, we have seen an example of how this software
can be deployed, we have seen all the different variables of
how it can be enhanced. And we just believe that anything that
this Committee does going forward has to take that project in
mind.
And as far as timelines go, we absolutely support making
sure that VA meet with this Committee on a regular basis to
ensure that they are meeting benchmarks and timelines. And if
something goes awry, Congress needs to be the first ones to
know.
But we also believe that you should be working very closely
with VA as you are doing now to ensure that they can meet the
timelines that you are asking them to meet. And if they cannot,
they need to be able to provide a cogent reason as to why they
cannot meet those timelines, and what the timelines should be.
Just as you are doing today.
Ms. Kuster. So my time is up. If anyone else wants to
comment on that, we can take it for the record. Thank you. I
yield back.
Mr. Bergman. Thank you.
Dr. Dunn, you are recognized for five minutes.
Mr. Dunn. Thank you very much, General. And thank you very
much for letting me be part of this hearing today, and I want
to thank all the witnesses who are here testifying as well.
I would emphasize my support for the purchase card draft
bill and the Medical Surgical Prime Vendor draft bill. The
purchase card misuse has been a chronic issue with the VA for
years, and no one has been held accountable for this
misfeasance.
This draft codifies the prohibition of abusing purchases on
the--at the expense of the tax payers. Similarly, the Medical
Surgical Prime Vendor draft bill keeps the department on track
by fixing the current model and ensuring that the current
medical formularies are broadened to better serve the patients.
So, Mr. Lemmon, I understand the VA is very close to hiring
a permanent director to run the MSPV program. Do you have
anything to announce today on that, such as when this person
might begin work, and what their qualifications are?
Mr. Lemmon. I do not. We have not hired the person as of
today.
Mr. Dunn. Can you share the qualifications for the kind of
things you are looking for?
Mr. Lemmon. Well, we are certainly looking for someone that
has a background working with clinicians, and doing value
analysis, and sourcing clinical products. And my understanding
is there are some good applicants. I think we will be able to
make a selection on that, but we have not hired the person.
Mr. Dunn. Can you speculate on the timeline?
Mr. Lemmon. I think it will be soon.
Mr. Dunn. Soon. Okay. Thank you. Also, the industry has
expressed frustration that the VA only selects a single
supplier for each category of medical or surgical supply, and
the regulations clearly allow you to select more than one,
multiple vendors. Can you explain what the decision--on what
basis the decision was made to select--choose a single supplier
for each line?
Mr. Lemmon. Well, I believe that goes kind of to the
contracting rules, but there are ways to work within the system
to select more than one supplier. We try to utilize ordering
officers in the facilities so that they can very efficiently
order products and services without re-competing the items on a
task order level. But there are ways to address that and still
award--make awards with multiple suppliers, and that is the
direction we plan to use going forward.
Mr. Dunn. In general, by having multiple suppliers, you get
them to compete against each other on price. And I am concerned
that you might not be getting that value added if you just have
a single supplier. Is that fair?
Mr. Lemmon. Well, I think you want to get the most
competitive and the best--drive the best bargain you can when
you award the contracts with your suppliers. And then have a
system where ordering officers can order very efficiently as
the hospitals need the items without running a second round of
competition between multiple award--
Mr. Dunn. All right. Pardon me. Sure the competition was in
there. Also, we spoke here several months ago, I think it was
in December, about items that get into the supply chain that
are in the grey zone. All right. So they are not necessarily
OEM, and they may not even be authorized OEM parts, and
whatnot. We thought we talked about a letter authorization
being provided by the distributors from the OEM. Have we taken
any actions on that?
Mr. Lemmon. We have. We do have policy on that, and we are
strengthening it, and providing guidance to our contracting
officers to require distributors that are not manufacturers to
prove that they are an authorized distributor of the
manufacturer to eliminate the possibility of grey market.
Mr. Dunn. Can you state for a fact that grey market items
are actually getting into the supply chain, or is it just
something that we suspect?
Mr. Lemmon. I think there have been a very small number of
instances where it has happened, but not on any scale.
Mr. Dunn. Do you have any examples?
Mr. Lemmon. I do not have any prepared, but we probably
could come back with a small number.
Mr. Dunn. Let me tell you why I ask that, because, you
know, in the world of robotic surgery, there are some after-
market suppliers that clearly fit into the grey zone, and that
can be a lot of money, those parts. Thank you very much. Mr.
Chairman, I yield back.
Mr. Bergman. Thank you.
Ms. Rice, you are recognized for five minutes.
Ms. Rice. Thank you, Mr. Chairman. Mr. Celli, if you could
just expound a little more on your objections to the purchase
card bill.
Mr. Celli. Thank you for asking me that question. So we are
never a fan of layering statute on top of statute to control
behavior when the VA already has the authority to hold bad
actors accountable. Honestly, I find it a bit offensive that
the VA is asking for this legislation when they can do the same
thing through policy today.
There is no reason at all that the Secretary cannot say, if
you have acted in bad conduct with a purchase card, you are
hereby suspended from having a purchase card. Why do they need
Congress to tell them that?
So we believe that Congress has been very generous with
their oversight, and the legislation that they have provided to
VA to hold bad actors accountable, and to remove bad actors
from the program. I just find it difficult to understand why
they need additional legislative authority to do something they
can already do.
Ms. Rice. Well, clearly they have not done it, and there
is--look, my personal feeling is, you give, you know, 10,000
credit cards out, you get what you get. It is like, you know, I
think it is just rife for abuse when you give purchasing
authority to that many people.
Mr. Celli. Well, then we are speaking to--
Ms. Rice. Not just the VA, it is in other places. But, I
mean, I would assume that there are maybe, you know, labor
issues and stuff like that they may constrain the hands of the
Secretary of the VA. I do not know. I mean, maybe some people
from the VA can talk about what difficulty there is in terms of
holding people accountable who are not just one time abusers of
the purchasing authority, but multiple time abusers.
Mr. Mingo. I would like my colleague Mr. John Bergman to
talk--John Adams to talk to that, please.
Mr. Adams. Thank you for the opportunity to address this. I
do not know that I can really speak on any labor issues because
that is outside of my purview. But we do have somewhere in the
neighborhood of 21,500 cards that are being used in the
Department. The annual spend, since 2015, I think you mentioned
it was $4 billion, it is up to $4.2 billion now. That is
somewhere in the neighborhood of 6.6 million transactions
annually that we do with purchase cards. I think the record
speaks for itself as far as the misuse that you have seen.
You know, I come from a DoD financial management
background, I have 30 years in the Marine Corps, 12 of which
was overseas. I understand the complexities of making payments
in a dynamic environment, especially like in a combat zone.
Still, we were able to find there within that environment
ways to do it properly and legally without misusing the tools
that were provided to us. So I think it is kind of--I am a bit
confused as to how we would not support a bill, coming from the
VA perspective, to prevent misuse of the purchase cards.
Ms. Rice. So have you made those suggestions about how you
did it and how that was more effective than the way it is being
done now, or?
Mr. Adams. So I am just coming into this role, I assumed it
in January, so we are doing a comprehensive review of the
policies around the purchase card, and looking at all the
metrics that we currently have regarding the purchase card use.
We are trying to do some analytics around things like spend
patterns, and anomalies in spend patterns, and those type of
things, and doing perhaps some forensic accounting on the data
to find ways to try to help the VA manage its purchase cards,
the transactions that are being done with it.
Ms. Rice. Well, when that analysis is done, which I think
is a great idea because you obviously have experience in this
area, I would love for you to share that with this Committee.
Mr. Adams. Certainly. Yes, ma'am.
Ms. Rice. Thank you. I yield back.
Mr. Bergman. Mr. Peters, you are recognized for five
minutes.
Mr. Peters. Thank you. I just have a couple questions for
Mr. Lemmon, I think. One aspect of the bill we have been
discussing on the MSPV issue, it is not yet in the draft bill,
is to require VA employees who conduct formulary analysis or
decide which items are going to be included in the formulary
have medical expertise that is relevant to those particular
items. The concern we hear constantly from the stakeholders is
that the wrong people are making medical decisions.
So I just wanted to ask, do you have feelings about the
bill language? Have you seen the language? Do you agree? Do you
have any objections? Any way you could inform us on that?
Mr. Lemmon. Well, although I support many of the underlying
short term objectives in the bill, I oppose legislating it. Now
the part regarding involving clinicians in choosing products, I
absolutely agree with. And we are working to implement a
clinically driven sourcing model with robust structure to
assure that product selection is based on clinical decisions.
And so we completely agree with the concept that it should
not be contracting people determining what products our doctors
should use, it should be the doctors. And we are working very
diligently to implement a structure to do that.
Mr. Peters. So your concern is sort of the maybe the
quantitative goals, 20,000 to 33,000 items a year, 30,000 to
50,000 items a year? Okay.
Mr. Lemmon. Yeah. I mean, right now commercial prime
vendors they may actually stock 30,000 items in a warehouse.
So, you know, to say that we have to contract for 50,000. And,
honestly, if you look a few years down the road, if we are
successful involving our clinicians like you would like us to,
and we would like to, we really think that is going to help
reduce the overall formulary from 50,000 potentially to a much
smaller number. So I would hate to legislate the actual number
of items we should have on contract, that should be driven by
clinical need.
Mr. Peters. Okay. Well, that is helpful, thank you. Mr.
Chairman, those are my questions, I yield back.
Mr. Bergman. Thank you. I will now yield myself five
minutes for questions.
Mr. Mingo, I appreciate you coming to testify about our
legislation today. I understand many of your colleagues in the
electronic health record modernization program are at the HIMSS
conference this week. What an acronym. Secretary Shulkin is
delivering the keynote address on Friday. VA has issued a
variety of press statements indicating it intends to award the
primary contract this month. Do you have any sort of
announcement to make, or guidance on when we should expect an
announcement?
Mr. Mingo. Chairman, thank you very much for that question.
I am as anxious as I think anybody in this room to hear the
actual award date. I do not have any specific--
Mr. Bergman. Are there any steps--
Mr. Mingo [continued]. --anything else specific.
Mr. Bergman [continued]. --that still need to be, any I's
needed to be dotted, T's needed to be crossed before the
contract is awarded?
Mr. Mingo. There are two additional--sir, I like actually
to take that one for the record, if I could, and get back to
you.
Mr. Bergman. Okay. Also, regarding H.R. 3497. Mr. Mingo,
you testified that it would be duplicative of the electronic
health record modernization program and divert resources away
from it. You note that veterans can already download a copy of
their medical records through what VA calls the Blue Button
Initiative. Does that include every aspect of a veteran's
medical record or just certain documents?
Mr. Mingo. Actually, Chairman, what I would like to do is I
would like to take that question for the record and I would
like to tie it back to Director Verma's comments that she did
make it at the HIMSS conference on Tuesday, where she announced
the Blue Button 2.0 Initiative. And there is a--I think there
is a very good opportunity for the two agencies to work
together in bringing that type of--all the data available for
the veterans to gain access, and the clinicians to have access
to that record when it is needed, together. So we would like to
come back and give you a better answer on that.
Mr. Bergman. Okay. And, Mr.--do you say Lemmon, or Lemmon?
Mr. Lemmon. Yes, Lemmon.
Mr. Bergman. Lemmon, that is what I thought. Okay. Mr.
Lemmon, and you have testified before us before. The National
Defense Authorization Act, which was enacted on December the
12th of this past year, increased the micro-purchase threshold,
which is also the transaction limit for purchase cards, from
$3,500 to $10,000. When will this change actually go into
effect?
Mr. Lemmon. I cannot give you a date. I will say that
agencies have the option to issue a deviation to the far until
the regulation changes. My understanding is that the VA Office
of Acquisition Policy is in the process of issuing that
deviation, and with the Office of Management then
implementation will be determined. But I do not know that
they--
Mr. Bergman. Can you give me kind of like a year?
Mr. Lemmon. I believe with certainty it would be this year,
but--
Mr. Bergman. Okay. Well, when the transaction limit goes up
and we finally get it, you know, in place, you are going to be
able to buy a lot more things with the increased dollar amount.
Can you give me an idea, has there been any discussion of what
types of products that you plan to move over onto purchase
cards?
Mr. Lemmon. Well, I think we have to take care. There are
areas where it would be helpful now in terms of some prosthetic
procurements as well as to help with our med-surg supplies
while we are working on a more robust catalog. But where we do
not want to go, we do not want to go from $4 billion of open
market spend to $6 to $8, we want to put more national
contracts in place and drive prices lower. So the goal really
is not to explode the purchase card program.
Mr. Bergman. Okay. Well, thank you.
Mr. Mingo. I would like to jump in on that question. Sorry,
Mr. Chairman, I would like to jump in on that as well because--
Mr. Bergman. Are you going to use up the rest of my time
here because I got one more question for Mr. Adams?
Mr. Mingo. Well.
Mr. Bergman. You can--I mean, go ahead.
Mr. Mingo. Oh. Okay. I was going to say--
Mr. Bergman. Unless my colleagues disagree. Can I have a
little extra time here to finish my one last question?
Ms. Kuster. We would grant you the courtesy.
Mr. Bergman. Great. Thank you so much. Okay. Be brief.
Mr. Mingo. At the HIMSS Conference, our CIO did announce
the use of the micro-purchase, the opportunity for really
bringing innovation, which is what we would bring with the new
Lighthouse Initiative that you referenced earlier. And that
type of threshold would enable those type of purchases as well
to bring in innovation meeting the veterans' needs, and pulling
those opportunities together.
Mr. Bergman. Okay. Thank you. Mr. Adams, VA's policy
handbook for the purchase card program sets out penalties for
misuse. The first offense ranges from admonishment to removal.
The second offense ranges from a seven day suspension to
removal. The third offense ranges from a 14 day suspension to
removal.
Those are very wide ranges. I would argue an admonishment
is not even a real penalty, it is kind of like being grounded
without having your allowance taken away. Can you give me some
examples of employees being removed for purchase card misuse?
Mr. Adams. Unfortunately, Mr. Chairman, I do not have any
the detailed data on any employees that may have been removed
as a result of that.
Mr. Bergman. Do you think there is something that exist in
the VA records that you could, regardless, not necessarily
names, but numbers, or--
Mr. Adams. I believe we could take that for the record.
Mr. Bergman. I would appreciate that very much. With that,
thank you to my colleagues for allowing me to extend my
questions.
Any appetite for a second round, or is everybody okay? All
right.
Thank you to the witnesses for your thoughtful input. The
panel is now excused.
The testimony provided today is an important contribution
as we move forward with the legislation, particularly the two
draft bills. The witnesses' expertise is valuable to help us
refine and improve the bill texts.
As you are well aware, this Subcommittee's Oversight and
Investigations of VA are frequently uncomfortable. So I
appreciate VA's willingness to consider the ultimate objectives
of today's legislation; improve efficiency, reduce waste, and
provide better outcomes for veterans. There was a time when the
Department's default posture was to evade congressional
scrutiny. I am happy to see the indications of that are
beginning to change.
And I wrote a couple extra notes here, Mr. Celli, because
you kind of asked the why we doing this. The reason the
Committee is put into a position of proposing this legislation
is because of VA's track record of accountability has been
unaccepted by too many standards, especially those of who have
worn the cloth of our Nation.
We know what we sign up to when we swear an oath, and the
performance. And so we--well, again, it is we could probably
spend time on other things, but we have a performance and
accountability problem from the Committee as a whole's view,
and especially Oversight and Investigation. But we are hopeful
that with new attitudes, new leadership, and a sense of urgency
that I can see beginning to take shape now within the VA gives
me cause for hope that the message is getting through as we,
the Committee, enable VA to take care of substandard, in some
cases, illegal performance. And that is the why.
So having said that, I appreciate the bipartisan
cooperation of all the sponsors and cosponsors of today's
legislation. I ask unanimous consent that all Members have 5
legislative days to revise and extend their remarks, and
include extraneous material.
Without objection, so ordered.
I would like to once again thank all of our witnesses and
audience members for joining us here this afternoon. This
hearing is now adjourned.
[Whereupon, at 3:11 p.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Prepared Statement of Fred Mingo
Good morning, Chairman Bergman, Ranking Member Kuster and Members
of the Committee. I am pleased to be here today to provide the views of
the Department of Veterans Affairs (VA) on pending legislation. With me
today are Mr. Ricky Lemmon, Acting Deputy Chief Procurement Officer,
Veterans Health Administration, Katrina Tuisamatatele, Health Portfolio
Director, Office Information and Technology, and Mr. John Adams,
Director of Corporate Travel and Charge Card Service, Office of
Management.
H.R. 3497
H.R. 3497, the Modernization of Medical Records Access for Veterans
Act of 2017 would direct the Secretary of Veterans Affairs to carry out
a pilot program establishing a secure, patient-centered portable
medical records storage system that would allow Veterans enrolled in
the VA health care system to store and share records of their
individual medical history with VA and community health care providers.
Although VA does not support H.R. 3497 as currently drafted, the
Department is fully committed to ensuring a Veteran's access to their
medical record information as required by the Health Insurance
Portability and Accountability Act of 1996 and other existing
legislation, and looks forward to further collaboration on the subject.
VA understands the intent of the legislation is to provide Veterans
with a copy of their most up-to-date medical record; however, the use
of a portable device is not the appropriate solution for several
reasons. First, challenges related to network security and
compatibility with electronic health records systems make doctors
resistant to accepting plug-in electronic devices from a patient.
Second, even with a portable storage device, Veterans may not always
have the most current copy of their record as this depends on when the
files are downloaded during the Veteran's visit. It may not reflect the
current visit including notes and the results of diagnostic tests that
were ordered during the visit. Lastly, the Department of Health and
Human Services will be promulgating regulations to require health IT
developers to have application programming interfaces (APIs) that
enable easy access, use, and exchange of health information, and this
technology would obviate the need for, or even the help from, the kind
of special purpose storage system that the bill would foster.
Currently, Veterans are already able to download a copy of their
medical records through the Blue Button initiative. They could even
download them on a community health care provider's computers which
would be a lower risk to that provider and to the Veteran. Also,
implementation of the contemplated portable medical record storage
system would take resources away from VA to support the Electronic
Health Record Modernization (EHRM) Program Executive Office (PEO) and
duplicate functionality that could ultimately be provided by the new
EHR.
VA is happy to work with the Committee to identify opportunities
within EHRM PEO Innovations and industry to provide Veterans with an
aggregated Personal Health Record (PHR) from multiple EHR systems in
the future.
H.R. 4245
H.R. 4245, the Veterans' Electronic Health Record Modernization
Oversight Act of 2017, would require VA to submit to designated
committees of Congress several project management documents 30 days
after enactment, as well as quarterly updates related to the Electronic
Health Record Modernization (EHRM) Program. VA would also be required
to submit to the designated committees any contract, order, agreement,
or modification thereto under the EHRM program within 5 days after
award or modification. Lastly, VA would be required to notify
congressional committees following significant events including:
milestone or deliverable delays of 30 days or more; equitable
adjustments or change orders exceeding $1 million; any protest, loss of
clinical or other data, and breach of patient privacy.
VA supports this legislation and believes transparency is important
for the success of the EHRM Program. VA recommends making the following
changes in Sec. 2(a) and Sec. 2(b). VA suggests changing the
requirement in Sec. 2(a) to provide for submission of program-
management documents to the committees no later than 180 days after
enactment of the legislation, a more practicable deadline. For Sec.
2(b), VA suggests changing the requirement to provide quarterly updates
no later than 60 days after the end of the fiscal quarter. This would
allow VA to provide the Committee with more accurate and complete
information.
VA would also like to work with the Committee to ensure that the
terminology is consistent with similar terms in the HIPAA Privacy Rule.
For example, it appears that the term ``breach'' in this bill is
broader than the similar term ``breach of unsecured protected health
information'' in the HIPAA Privacy Rule. VA believes greater
consistency among industry standards would reduce confusion, and
improve VA's interoperability with community providers.
Costs for H.R. 4245 would be minimal as the referenced documents
will be drafted as part of the EHRM Program.
H.R. ------ - Draft Bill Misuse of VA Purchase Cards
This draft bill would direct the Secretary of Veterans Affairs to
prohibit employees found to have knowingly misused a VA purchase card
from further serving as a purchase cardholder or approving official.
Such prohibition would be in addition to any other applicable penalty.
Under the draft legislation, misuse would mean splitting purchases,
exceeding the applicable card limits or purchase thresholds, purchasing
any unauthorized item, using a purchase card without being an authorize
account holder, and violating ethics standards.
VA supports the draft bill, as it would be consistent with VA
efforts to reduce potential fraud, waste, and abuse within the VA
charge card program. It would facilitate reduction of charge-card
misuse and minimize costly ratifications that are required to be
completed when unauthorized commitments are identified. The sanctions
identified in the bill would support sound charge card program
oversight and encourage cardholders and approving officials to strictly
adhere to purchasing requirements, as outlined in VA Financial Policy,
Volume XVI, Chapter 1, Government Purchase Card.
VA estimates the cost of enacting the legislation would be minimal.
H.R. ------ - Draft Medical Surgical Prime Vendor Program Bill
This bill would statutorily define the structure of VA's Medical/
Surgical Prime Vendor (MSPV) program and the number of items provided
in its formulary within 1 and 2 years after enactment.
VA opposes this bill. Congress has already provided, and the
Federal Acquisition Regulation has already implemented, suitable tools
to enable VA to make good business judgments in developing the MSPV
program as well as other acquisitions. Agencies are required to conduct
market research as part of their acquisition planning efforts; and at
VA, we have a further need to conduct market research to fulfill our
mandate under the Veterans First Contracting Program. Properly
conducted market research enables VA to assess the current state of the
marketplace and structure the acquisition appropriately based on the
number and types of vendors available, the geographic areas they serve,
the need to ensure redundancy to avoid interruption in supply, and/or
other factors.
In addition, Congress has provided tools for evaluating options for
changing the number of vendors in subsequent acquisitions. Statutes on
contract bundling and consolidation provide criteria for evaluating
potential cost savings or other acquisition benefits to determine if
such actions are necessary and justified. They also provide for
elevated review of such decisions by the VA Senior Procurement
Executive, VA Chief Acquisition Officer, VA Deputy Secretary, and the
Administrator of the Small Business Administration.
The current MSPV structure was based on a judgment call to apply
the criteria Congress enacted to guide agencies in making these
decisions. Legislation eliminating VA's ability to make such calls
could have unintended consequences in preventing VA from adapting to
changing market circumstances.
Legislating the number of formulary items to be contracted within
arbitrary time periods could also have unintended consequences.
Determining the types of items needed and the number of suppliers for
each type of item are also judgment calls. In making these judgment
calls, VA considers factors such as opportunities for standardization
and clinical needs. These judgment calls are additionally informed by
market research as part of the acquisition process. However, adequate
market research is necessary to make an informed business decision, and
therefore establishing arbitrary timeframes increases the risk of poor
business decisions.
Providing broadly applicable criteria to make such judgments, which
balance competing interests in public policy as Congress has defined
them, is a much more constructive approach than the draft legislation
proposes. VA should continue to have the flexibility to make such
determinations based on market conditions and prevailing business
practices, clinical need, and the like. As markets continue to change
and develop, VA needs the ability to change and develop its procurement
process accordingly.
This includes our testimony. We appreciate the opportunity to
present our views on these bills, and look forward to answering any
questions the Committee may have.
Prepared Statement of Louis J. Celli Jr.
Chairman Bergman, Ranking Member Kuster, and distinguished members
of the Subcommittee. On behalf of Denise H. Rohan, National Commander
of The American Legion; the country's largest patriotic wartime service
organization for veterans and our 2 million members; we thank you for
inviting The American Legion to present our position on the pending and
draft legislation before you today.
H.R. 3497 - Modernization of Medical Records Access for Veterans Act of
2017
To direct the Secretary of Veterans Affairs to carry out a pilot
program establishing a secure, patient-centered, portable medical
records system, that would allow veterans to have access to their
Personal Health Information, and for other purposes.
The American Legion, through resolution, has long endorsed and
supported the Department of Veterans Affairs (VA) in creating a
Lifetime Electronic Health Records (EHR) system. Additionally, The
American Legion has encouraged both the Department of Defense (DoD) and
the VA to either use the same EHR system, or, at the very least,
systems that were interoperable.
In 2009, The American Legion was pleased when the Obama
administration announced that the DoD and the VA would finally create a
path to integrate the flow of patients' information between DoD's AHLTA
(Armed Forces Health Longitudinal Technology Application) and VA's
VistA (Veterans Information System and Technology Architecture)
Electronic Health Record (EHR) platforms. \1\
---------------------------------------------------------------------------
\1\ Obama administration announces DOD and VA pathway to an
integrated health record - http://www.ehrscope.com/blog/white-house-
announces-plan-to-integrate-dod-and-va-ehrs/
---------------------------------------------------------------------------
In 2015, DoD announced that Cerner was awarded a coveted $4.3
billion, 10-year contract to overhaul the Pentagon's electronic health
records for millions of active military members and retirees. However,
around the same time, VA announced it would maintain and modernize
VistA.
The American Legion was disappointed in VA's and DoD decisions to
go in different directions and voiced concerns about their decision. On
June 6, 2017, VA Secretary David Shulkin announced that the VA would
adopt the same Cerner EHR system as the DoD during a news briefing at
VA's headquarters in Washington, D.C.
The impending contract, that the Department of Veterans affairs is
in the final stages of negotiating, will set the standard for record
transferability and standardization in America. This new national
standard will increases patient access, decrease wait times, and
enhance good medicine for all Americans, not just veterans. Congress
should refrain from advancing any recommendations or legislation that
does not directly support implementation of the VA EHR modernization
effort currently being negotiated.
The American Legion understands and applauds the author of H.R.
3497, as the desire to aide veterans all while placing their medical
care into the 21st Century is clear. We look forward to engaging Rep.
McMorris Rodgers in the future to assist our nation's heroes and their
families.
The American Legion Opposes H.R. 3497.
H.R. 4245 - Veterans' Electronic Health Record Modernization Oversight
Act of 2017
To direct the Secretary of Veterans Affairs to submit to Congress
certain documents relating to the Electronic Health Record
Modernization Program of the Department of Veterans Affairs.
In 2009, The American Legion was pleased when the Obama
administration announced that the Departments of Defense (DoD) and
Veterans Affairs (VA) would finally create a path to integrate the flow
of patients' information between DOD's AHLTA (Armed Forces Health
Longitudinal Technology Application) and VA's VistA (Veterans
Information System and Technology Architecture) Electronic Health
Record (EHR) platforms. \2\
---------------------------------------------------------------------------
\2\ Obama administration announces DOD and VA pathway to an
integrated health record - http://www.ehrscope.com/blog/white-house-
announces-plan-to-integrate-dod-and-va-ehrs/
---------------------------------------------------------------------------
In 2015, DoD announced that Cerner was awarded a coveted $4.3
billion, 10-year contract to overhaul the Pentagon's electronic health
records for millions of active military members and retirees. However,
around the same time, VA announced it would remain with VistA.
The American Legion was disappointed in VA's and DoD decisions to
go in different directions and voiced concerns about their decision. On
June 6, 2017, VA Secretary David Shulkin announced that the VA intends
to adopt the same Cerner EHR system as the DoD during a news briefing
at VA's headquarters in Washington, D.C.
``I had said previously that I would be making a decision on our
EHR by July 1, and I am honoring that commitment today,'' Shulkin said.
``The health and safety of our veterans is one of our highest national
priorities. Having a veteran's complete and accurate health record in a
single common EHR system is critical to that care, and to improving
patient safety.''
Shulkin said VA's current VistA system is in need of major
modernizations to keep pace with the improvements in health information
technology (IT) and cybersecurity, as software development is not a
core competency of VA. \3\
---------------------------------------------------------------------------
\3\ VA announce the decision to go with Cerner -https://
www.legion.org/veteranshealthcare/237706/%E2%80%98it%E2%80%99s-time-
move-forward%E2%80%99
---------------------------------------------------------------------------
The Veterans' Electronic Health Record Modernization Oversight Act
of 2017 directs VA to provide Congress with its key planning and
implementation documents for the EHR replacement project, to provide
copies of the contracts, to keep Congress informed on progress and
actual costs. The legislation also requires VA to notify Congress
quickly in the event of any significant cost increase, schedule delay,
loss of veteran health data or breach of privacy.
The American Legion supports VA and the DoD establishing a joint
Virtual Lifetime Electronic Health Record (VLER) and the congressional
oversight and funding necessary to ensure this most important and
massive IT transformation is completed as seamlessly as possible. \4\
---------------------------------------------------------------------------
\4\ The American Legion Resolution No. 83: Virtual Lifetime
Electronic Record
---------------------------------------------------------------------------
The American Legion supports H.R. 4245.
DRAFT BILL
To amend title 38, United States Code, to direct the Secretary of
Veterans Affairs to prohibit employees found to have knowingly misused
Department of Veterans Affairs purchase cards from serving as purchase
card holders or approving officials.
This draft bill prohibits any employee of the Department of
Veterans Affairs (VA) who the Secretary or the Inspector General of the
Department determines has knowingly misused a purchase card from
serving as a purchase cardholder or approving official.
The American Legion leaves employee discipline, and policies to
correct agency/employee behavior to the Department. VA's Purchase Card
Program is part of the U.S. General Services Administration (GSA)
SmartPay Program and conforms to the Federal Acquisition Regulations
(FAR). \5\
---------------------------------------------------------------------------
\5\ VA Purchase Card Policy https://www.va.gov/finance/docs/VA-
FinancialPolicyVolumeXVIChapter01.pdf
---------------------------------------------------------------------------
While the bill would restrict a VA employee from serving as a
purchase cardholder or an approving official even in cases where it is
the employee's primary duty and in such cases The American Legion sees
no provision contained within the legislation that addresses the future
job description of the employee.
The objectives of the Purchase Card Program are to:
Reduce paperwork and administrative costs for the
acquisition of supplies and services within the existing FAR;
Streamline payment procedures and improve cash management
practices, such as consolidating payments and reducing petty cash
funds; and
Provide procedural checks and feedback to improve
management control.
All cardholders are required to use the purchase card for
authorized procurement in accordance with Simplified Acquisition
Procedures (FAR Part 13 and Veterans Affairs Acquisition Regulations
(VAAR) Part 813.)
In 2017, Veterans Affairs Office of Inspector General (VAOIG)
conducted two Audits of VA's Purchase Card program. On June 27, 2017,
VAOIG issued report, 15-01227-249, entitled, ``Review of Alleged
Irregular Use of Purchase Cards by the Engineering Service at the Carl
Vinson VA Medical Center in Dublin, Georgia.'' \6\
---------------------------------------------------------------------------
\6\ VA OIG Report - 15-01227-249 https://www.va.gov/oig/pubs/VAOIG-
15-01217-249.pdf
---------------------------------------------------------------------------
VAOIG substantiated the allegation that Dublin VA Medical Center
cardholders in Engineering Service made unauthorized commitments by
splitting purchases and exceeding micro-purchase limits. Of the 130
sampled purchases made from October 2012 through March 2015, 23 were
split purchases that avoided the $3,000 limit for supplies and 14 were
purchases that exceeded the $2,500 limit for services.
This happened because approving officials did not adequately
monitor cardholders to ensure compliance with VA policy.
VAOIG did not substantiate the allegations that cardholders made
duplicate payments to Ryland Contracting Incorporated and Sterilizer
Technical Specialists. However, VAOIG found cardholders inappropriately
made 91 micro-purchases for services received from these vendors
without establishing contracts.
On September 2017, VAOIG Issued report, 15-04929-351, entitled
``Audit of Purchase Card Use To Procure Prosthetics.'' \7\
---------------------------------------------------------------------------
\7\ VA OIG Report - 15-04929p351 https://www.va.gov/oig/pubs/VAOIG-
15-04929-351.pdf
---------------------------------------------------------------------------
The VA OIG received an allegation in 2015 that the VHA
inappropriately used Government purchase cards to procure commonly used
prosthetics, instead of establishing contracts that would leverage
VHA's purchasing power, and failed to ensure VA received fair and
reasonable prices. Furthermore, VHA allegedly did not report purchases
in the Federal Procurement Data System (FPDS).
VAOIG substantiated the allegations that for some prosthetic
purchases above the micro-purchase limit, VHA did not leverage its
purchasing power by establishing contracts and did not ensure fair and
reasonable prices were paid. A micro-purchase is an acquisition using
simplified acquisition procedures where the aggregate amount does not
exceed $3,500.
VAOIG stated these improper actions occurred because VHA controls
did not ensure the Prosthetic and Sensory Aids Service (PSAS)
sufficiently analyzed prosthetic purchases to identify commonly used
prosthetics and the Procurement and Logistics Office (P&LO) did not
adequately monitor Network Contracting Office (NCO) procurement
practices to ensure contracts were established. As a result, VAOIG
estimated VHA might have paid higher prices for an estimated $256.7
million in prosthetics purchases during FY 2015 by not establishing
contracts.
VAOIG did not substantiate the allegation that VHA failed to report
prosthetic procurements in FPDS. We estimated VHA reported about 86,200
of the 87,100 FY 2015 prosthetic purchases (99 percent) in FPDS.
Unauthorized commitments require ratification. According to VAOIG,
VHA did not have reasonable assurance that VA medical facilities used
taxpayer funds efficiently when procuring prosthetics. In response to
the investigation, VHA initiated actions to pursue contracts for
commonly used surgical implant prosthetics. In addition, VHA has
established pre-authorization procedures and plans to authorize the use
of ordering to help mitigate improper payments and unauthorized
commitments associated with surgical implants.
Again, The American Legion approaches management of employees with
extreme caution when addressing agency/employee behavior related
matters. The American Legion could not find any evidence in any of the
VAOIG reports that prove that the government spent more money than they
otherwise would have, or that any of the purchases would have saved
money using more complicated and expensive contracting vehicles.
Since the bill would restrict a VA employee from serving as a
purchase cardholder or an approving official if this is one the
employee's primary duties, The American Legion is concerned that the
bill would limit an employee from performing their assigned duties,
which may result in additional and unidentified personnel actions. The
American Legion believes VA already has the authority to take action on
employees who fail to follow VA policies, and is not convinced this
legislation is necessary.
The American Legion does not support this draft bill.
DRAFT BILL
To direct the Secretary of Veterans Affairs to carry out the
Medical Surgical Prime Vendor program using multiple prime vendors.
In terms of contracting, private sector hospitals use multiple
Group Purchasing Organization (GPOs) who bid down the price of
manufactured medical equipment. This practice, forces the GPOs to
compete among themselves, yielding the lowest possible prices, which is
at the benefit of the hospitals, or the general market place. In
summary, competition drives down prices.
Utilizing Medical Surgical Prime Vendor (MSPV) Gen2, VA has
proposed using only one large single vendor as opposed to the current
model of using multiple vendors. When you decide to use only one
vendor, prices may be inflated, simply because of the lack of
competition. Ensuring there is competition, the VA, and the government
as a whole, typically receives better pricing, which is ultimately at
the benefit of the U.S. taxpayer.
The American Legion understands the simplification of utilizing
only one vendor, however, that does not yield the best result for the
veteran, agency or the federal government. Utilizing a singular vendor
is easier to deal with, but this procurement shortcut undermines the
competitive system, and can result in VA overpaying for equipment or,
not being able to obtain quality material necessary to supply the
largest medical network that treats veterans.
In the current model that VA is employing, Service Disabled Veteran
Owned Small Businesses (SDVOSBs) work with prime vendors, which not
only assists and encourages veterans to work in this realm, but also
allows for competition and drives down costs. SDVOSBs add value to the
procurement process by providing last mile delivery, customer care, and
maintenance services for prime vendors.
In short, The American Legion opposes the Department of Veterans
Affairs switching to a system that allows them to simply utilize one
vendor, and urges Congress to force VA to allow for competitive
bidding. Further, The American Legion, by resolution \8\, supports
reasonable set-asides of federal procurements and contracts for
businesses owned and operated by veterans. Allowing the VA to
essentially encourage a monopoly on medical supplies and equipment is
not only wrong, but it could also decrease SDVOSB participation,
potentially harming the quality care that veterans receive at VA, all
while overspending taxpayer funding.
---------------------------------------------------------------------------
\8\ The American Legion Resolution No. 154: Support Reasonable Set-
Aside of Federal Procurements and Contracts for Businesses Owned and
Operated by Veterans
---------------------------------------------------------------------------
The American Legion supports the draft bill as currently written.
Conclusion
As always, The American Legion thanks this subcommittee for the
opportunity to explain the position of the over 2 million veteran
members of this organization. For additional information regarding this
testimony, please contact Mr. Matthew Shuman at The American Legion's
Legislative Division at (202) 861-2700 or [email protected].
Prepared Statement of Scott Denniston
Good afternoon, Chairman Bergman, Ranking Member Kuster, and
distinguished members of the Subcommittee. On behalf of the members of
the National Veteran Small Business Coalition and all veteran (VOSB)
and service-disabled veteran-owned small businesses (SDVOSB) trying to
do business with the Department of Veterans Affairs (VA), I sincerely
appreciate the opportunity to discuss the proposed pieces of
legislation as invited. The National Veteran Small Business Coalition
(NVSBC) is the nation's largest non-profit trade association
representing veteran and service-disabled veteran-owned small business
in the federal marketplace as prime and subcontractors.
I would like to first address HR3497 and HR 4245 dealing with
Veterans Electronic Health Records. We believe HR 3497 to allow
veterans to use a portable medical records storage system is good news
for veterans as it allows easier access to their own personal health
records. HR 4245 appears to address Congress' concerns regarding the
contract the VA Secretary announced last fall which he intends to award
to Cerner to modernization of VA's electronic patient health care
record systems. Our concern with this contract is VA has taken a very
minimalistic approach to providing subcontracting opportunities for
small business, including veteran and service-disabled veteran-owned
small business. VA only required the awardee to meet the ``minimum
goals'' of 17% to small business, 5% to SDVOSBs and 7% to VOSBs.
Information technology contracts such as this, generally provide many
opportunities for prime contractors to subcontract to small business
including VOSBs and SDVOSBs. For example, the FY 2018 subcontracting
goals established by the U.S. Small Business Administration (SBA) for
other agencies include the following:
Department of Defense
33%
Department of Energy
42%
Department of Homeland Security
40%
Also, over the past 10 years VA has NEVER once achieved its
subcontracting goal negotiated with SBA. Given VA's poor track record
and the lower goals accepted for this contract we implore this
committee to include in HR 4245 a provision requiring the Secretary of
Veterans Affairs to report to Congress on a quarterly basis the
accomplishments against the small business subcontracting goals to
include subcontract awards to VOSBs and SDVOSBs.
Next, I would like to address the draft bill regarding VA employees
found to have knowingly misused VA purchase cards. The NVSBC is fully
supportive of this draft. Abuses of purchase cards has been wide-
spread. This trend will only continue with the recent raising of the
limitations on purchases using the cards from $3,500.00 to $10,000.00.
We have found that many times these issues arise due to poorly written
polices and training on the part of VA acquisition leadership, not
because VA employees are dishonest people.
The last draft bill you asked me to discuss directs the Secretary
of VA to carry out the Medical Surgical Prime Vendor (MSPV) program
using multiple prime vendors. Before addressing the specifics of the
draft bill I want to share with you our observations having lived the
current prime vendor program for the past two years and numerous
meetings with both Veterans Health Administration (VHA) and Strategic
Acquisition Center (SAC) leadership. The current program is being
driven for contracting expediency, not based on clinical input to
improve veteran patient care. There is little to no clinical input in
our opinion. VHA and the SAC appear to work on conflicting time frames.
There is no strategic plan. Determining who is in charge is impossible.
The rules of engagement change on a weekly basis as to acquisition
strategies to be used. Frankly we wonder how often VHA and SAC actually
communicate needs/requirements and solutions. Also, there appears to be
much more communication with the large business community than
communication with the VOSB/SDVOSB community. Communication with the
VOSB/SDVOSB community is after the fact when we are told what will
happen as opposed to having an opportunity to make recommendations to
improve the process. VA seems to forget, as veterans and users of the
VA health care system we have a personal and vested interest in its
success. Also, there is little data available as to products,
quantities or delivery requirements VA intends to purchase.
The NVSBC, in representing all VOSBs/SDVOSBs trying to do work with
VA would be remise if we didn't again point out the anti- veteran small
business positions expressed by VA's senior acquisition official during
this Committee's Veterans First Contracting Program Roundtable held on
October 11th, 2017. That official has publically stated numerous times
that VOSBs and SDVOSBs add no value, cost more and are administratively
burdensome to work with. He further stated his position that VA should
not pay a penny more to buy from a VOSB or SDVOSB. This culture as well
as the policies implemented by VA limit the opportunities for VOSBs and
SDVOSBs to work at VA and fly in the face of the VETS First Contracting
Program as well as the U.S. Supreme Court decision in Kingdomware.
Bottom line; there is a toxic culture in VA, particularly in VA Central
Office to working with the veteran small business community.
In the fall of 2017 when we learned the SAC intended, under MSPV
2.0, to award one contract for the MSPV 2.0 program we were appalled.
Particularly when we learned the contract would require the MSPV 2.0
contractor to also determine the formulary of products and to also
purchase all products to be included on the formulary. We asked what
part VOSBs and SDVOSBs would play in MSPV 2.0 and were told they would
be subcontractors to the MSPV 2.0 prime. When asked how VETS First
would apply to MSPV 2.0 we were told it doesn't as VOSBs and SDVOSBS
would be ``subcontractors''. When we asked what type of small business
subcontracting plan would be required we were told ``don't know yet''.
When we addressed the fact that in the past 10 years VA has NEVER
achieved its subcontracting goals we were told ``just trust us''! In
addition, relegating VOSBs and SDVOSBs to subcontractors allows VA to
avoid the issue of a waiver of the SBA ``Non-Manufacturer Rule ``. VA
has established a policy of requiring HCA approval prior to any
contracting officer requesting a waiver from SBA. WE believe this
policy to be in direct violation of the Small Business Act. We also
know of and appreciate this Committee's concern over this overly
burdensome requirement which we believe is another attempt by VA to
circumvent VETS First.
We support the Committee's position that VA cannot have just one
prime vendor. Our experience in the private sector is commercial
hospital systems are members of a number of ``Group Purchasing
Organizations (GPOs). This allows for flexibility of products as well
as guarantees product availability while at the same time taking
advantage of volume discounts. Commercial hospital systems have learned
they need flexibility which doesn't come from a one supplier solution.
We believe VA needs to develop a similar concept. As I stated
previously, VA's plan seems to be driven for the benefit of the
contracting process, not the needs of veteran's healthcare needs. We
also do not understand why VA does not use the VA Federal Supply
Schedule (FSS) contracts as a starting point for formulary products.
FSS contracts by definition are considered ``fair and reasonable''
prices. VA, as well as the large and small business community has put
tremendous effort into the success of the FSS program. We do not
understand why VA appears to be abandoning FSS?
We fully support the draft bill provisions that the prime vendor
should not be the decider of the formulary nor of the suppliers of the
products. We strongly suggest this Committee direct VHA and SAC
leadership to define requirements, develop a process for clinical input
and develop a strategic plan for moving forward with MSPV 2.0. The plan
must include how VA intends to provide opportunities for VOSBs and
SDVOSBs as required by VETS First. This plan should then be shared with
industry, large business and small business for comments and
suggestions. We believe this will provide better outcomes for all
parties.
During this Committee's roundtable on the VETS First program on
October 11th, 2017, Chairman Bergman invited participants to provide
recommendations to the Committee for improving VETS First at VA. NVSBC
provided 8 specific recommendations in a letter to this Committee dated
October 17, 2017. These recommendations are still relevant today and I
would encourage the Committee to consider the recommendations moving
forward. I have provided a copy of our letter with my testimony. We are
also available to meet and discuss any of the recommendations with any
member of the Committee.
I also want to bring to the Committee's attention a solution to the
micro-purchase program NVSBC has been developing for the past year. VA,
buy their own statistics spends approximately $4 billion per year under
micro-purchases using purchase cards. In the future this amount will
sky rocket as the micro-purchase threshold in VA is being raised from
$3,500 to $10,000. VA policy exempts micro-purchases from the VETS
First program. This is in spite of the U.S. Supreme Court decision in
Kingdomware where the court determined all ``contract actions'' are
subject to VETS First. Micro-purchases meet the Federal Acquisition
Regulations (FAR) definition of a ``contract action''.
Over the past year, NVSBC has met with VA leaders from VHA, SAC,
and the Office of Small Business Programs (OSDBU) to discuss how to
provide more micro-purchase opportunities to the VOSB and SDVOSB
community. These discussions have led NVSBC to develop in conjunction
with an NVSBC member, Veratics of Indian Beach, FL, an electronic
ordering platform, similar to Amazon, called ``Go VETS''. Our vision is
all VA verified VOSBs and SDVOSBs who can provide products to VA under
the micro-purchase threshold will upload their products on the
platform. VA purchasing personnel with then have a ``one stop, easy
button'' to purchase products, using their purchase cards, from
verified VOSBs and SDVOSBs. We are starting in the medical products
area as it represents the greatest spend and VA is currently buying
many of these products from the 4 current Medical Surgical Prime
Vendors, and many times at inflated costs. As we fine tune the platform
other product lines will be added from verified VOSBs and SDVOSBs. As
you can imagine we have overcome many obstacles to get to this point,
but we are optimistic we can have ``Go VETS'' operational in 90 days.
We are also encouraged by the fact that many VA officials with whom we
have discussed this platform over the past year are warming to the idea
and see its value. We are happy to demo ``Go VETS'' to the Committee as
well as provide updates on our progress. We are very excited by the
potential to provide many more opportunities to VOSBs and SDVOSBs.
Mr. Chairman, Ranking Member, and Members of the Committee, this
concludes my statement. Thank you for the opportunity to testify before
the Committee today. I am happy to respond to any questions or comments
you may have.
Statements For The Record
Ken Wiseman
Chairman Bergman, Ranking Member Kuster, and Members of the
Subcommittee, on behalf of the men and women of the Veterans of Foreign
Wars of the United States (VFW) and its Auxiliary, I would like to
thank you for the opportunity to submit testimony regarding legislation
pending before this committee.
H.R. 3497, Modernization of Medical Records Access for Veterans Act of
2017
This legislation would provide a portable ``credit card sized''
health record for veterans. While this sounds appealing, the VFW is
very concerned about this bill and opposes its passage.
The act of a veteran accessing their record and getting a copy is
something they can already do. Veterans have the ability to get copies
by using their My HealtheVet account. After logging into their account,
the first page a veteran sees offers a selection of four large
``buttons'' and accessing their medical record is the fourth option.
VFW staff tested the ability to download their record using this
method, and in less than 90 seconds an electronic version had been
downloaded. For those who do not use My HealtheVet, a hard copy can be
obtained by the veteran from their local Department of Veterans Affairs
(VA) Medical Center. As such, the VFW does not see how this improves
the access a veteran has to VA.
To ensure that the veteran's medical record follows them after
military service, VA has recently begun the process of adopting a
commercial off-the-shelf system for the future electronic health
record. The Electronic Health Record Modernization Program (EHRMP) will
allow veterans to have more access to their medical records. This
legislation allows the discharging service member to electronically
``carry'' their record to VA and for various portions of VA to interact
with itself and with community care providers while caring for the
veteran. The VFW believes H.R. 3497 could create a competing medical
record that would prevent VA and the veteran from having all needed
information on one platform, thus slowing the delivery of care. Because
of a lack of vital information, this could lead to decisions being made
that could harm the health of the veteran.
In looking at our first two concerns together, the VFW worries
about interoperability between the device that would be created and
other VA systems, and security of the information stored on it. There
is no requirement for the device to ever be connected to, or even
interoperable with, the electronic health record that will result from
EHRMP. A lost device could also lead to compromised information and
this is a real threat in the modern day.
Finally, the VFW opposes this bill because it specifically bans new
appropriations for implementation. Unfunded mandates harm other
programs by forcing VA to take money from other parts of its IT budget.
The VFW is already concerned about VA's IT budget funding levels. This
legislation would cause VA to divert precious and limited resources
from other programs, thus hindering modernization of IT capabilities
and implementation of EHRMP.
H.R. 4245, Veterans' Electronic Health Record Modernization Oversight
Act of 2017
The VFW is strongly supportive of VA's goal to have a medical
record that is interoperable with DOD, so that as a service member
becomes a veteran, their health history follows them. The work to
accomplish such a major project is not something to be taken lightly,
and the VFW supports efforts to ensure oversight of the project. The
VFW supports H.R. 4245, which would help accomplish this goal.
The VFW is concerned by testimony regarding EHRMP as it relates to
ensuring the project stays on budget on and on time. We know that
Secretary of Veterans Affairs Shulkin has taken steps to ensure this
project results in a program that is truly interoperable, and we
support this as well. Only regular oversight, reports on actions, and
explanations of why deviations from set plans were allowed, will ensure
the project succeeds. Further, tracking of associated expenditures will
ensure that other IT projects will not be starved of funding by
movement of funds within the budget for IT programs at VA. We applaud
the bipartisan work on this legislation and urge quick passage.
Draft Bill to Restrict Purchase Card Abuse
The VFW supports any actions necessary to ensure VA employees are
using purchase cards responsibly. Fraud, waste, and abuse of government
funds are detrimental to the overall success of VA's mission. If any
employees are found to knowingly use purchase cards maliciously, then
the right to use those cards must be revoked. We support removal of
purchase card authority for employees who maliciously or irresponsibly
abuse them.
Draft Bill to Use Regional Medical Surgical Prime Vendors
The VFW sees value with the intent of this proposed bill. We always
encourage the expansion of opportunities for Veteran Owned Small
Businesses to compete for contracts with VA, but we also see value in
having a single supplier if the situation is necessary. Mandating VA to
use regional prime vendors could have a positive impact on competition
in the market place; however, we would not want to see it negatively
impact overall cost. The VFW does not have a position on this bill.
Congresswoman Cathy McMorris Rodgers
I'd like to thank Chairman Bergman and Ranking Member Kuster for
holding this important legislative hearing to address the fundamental
need for comprehensive medical records for veterans.
Every day, I hear from veterans in Eastern Washington who are in
desperate need of help from the VA, yet so often they are not receiving
the help they need or deserve.
The VA's sole mission is to serve our veterans. Instead of having
the red carpet rolled out for them, veterans are treated like a burden.
This includes veterans attempting to simply obtain their medical
records from the VA. I have even heard from providers in the community
who have been frustrated to the point of tears because they are unable
to treat veterans because the patient cannot obtain his own medical
records. Some veterans have waited more than two years to simply get
their medical records from the VA. That is unacceptable.
But there is an easy, common sense, off-the-shelf solution for this
problem.
My bill, introduced along with Congressman Seth Moulton, is a
bipartisan, readily available solution to this problem. It directs the
Secretary of the VA to establish a secure, patient-centered, portable
medical records systems that would allow veterans to have access to
their own comprehensive medical records.
As with most things in the VA, this is not an issue where the wheel
must be reinvented to fix the issue. Commercial, off-the-shelf
solutions already exist in the private sector. This kind of technology
is already out there, deployed in hospitals in the private sector.
For example: VYRTY, a company based out of Washington state, is a
secure offline data repository, with end-to-end encryption and remote
record completion. VYRTY is a fully secure, portable, and HIPAA
compliant health record management system that is currently deployed in
Washington state--with Evergreen Health Partners, Evergreen Health
Hospital, Halvorson Cancer Center, and the Seattle Cancer Care
Alliance, and growing--and is interoperable across 89 different health
records (EHR's)/platforms.
VA Concern: Challenges related to network security and compatibility
with electronic health records systems make doctors resistant to
accepting plug-in electronic devices from a patient.
We have discussed the security concerns that some may have in
conversations with the VA Office of Information and Technology (OI&T)
and the VA Committee.
While these concerns would be valid on other scenarios, the
technology that exists and that is in use today is secure and is HIPAA
compliant. It is compatible across all electronic health records
systems, including Cerner, and is encrypted end-to-end.
The fact that it is in use today shows that it does not make
doctors resistant to accepting plug-in electronic devices from
patients.
VA Concern: Even with a portable storage device, veterans may not
always have the most current copy of their record as this depends
on when the files are downloaded during the Veteran's visit. It may
not reflect the current visit including notes and the results of
diagnostic tests that were ordered during the visit.
With the technology that is currently deployed, patients have a
current copy and the most up-to-date version of their medical record.
Specifically, one of the important aspects of VYRTY's technology is
that they perform record completion. When a patient leaves his or her
provider, they are leaving with the most up-to-date medical record
information because it is updated immediately.
While the VA Department gives veterans access to the Blue Button
Initiative through MyHealtheVet, this means that the veteran is
constantly downloading, printing, and taking their latest record every
time they go to an outside provider or to a different VA facility, or
they're waiting for a document to download while sitting in a
provider's office. This puts the burden on the veteran to be
responsible for printing and bringing their most up-to-date records.
With the VYRTY's technology, the veteran and the provider have all
of the information on a chip which then just has to be handed to the
doctor. That's it.
VA Concern: the Department of Health and Human Services will be
promulgating regulations to require health IT developers to have
application programming interfaces (APIs) that enable easy access,
use, and exchange of health information, and this technology would
obviate the need for, or even the help from, the kind of special
purpose storage system that the bill would foster.
First of all, the VA is not regulated by HHS.
Additionally, And again, the technology that this legislation
references, is already in use today, therefore it is already up-to-date
and in line with current regulations.
VYRTY has the capability to be integrated directly--and is already
supporting direct data feeds in their deployments. The card that is
used by VYRTY is a personal repository of all patients' records. It
doesn't matter whether those records are coming from an EHR through the
``print'' functionality or through application programming interfaces
(API) level integration. VYRTY has an offline storage capability--with
online synchronization capabilities--that deliver stored copies of the
records between points of service.
Closing
I am disappointed and concerned by the VA Department's decision to
oppose the legislation--that they've chosen to focus on the challenges
rather than the opportunities to offer our veterans high quality care.
My staff and I have held several meeting with the VA's Office of
Information and Technology (OI&T), where legislation was discussed,
where VYRTY was brought in to demonstrate their technology, and where
the draft legislation was sent to the VA before introduction for
comments and concerns, yet we have--IN WRITING--that the OI&T was
supportive of the legislation. In the VA's words: ``this looks good to
us here.''
What this bill is proposing is a common sense, off-the-shelf,
readily available solution to a persistent problem among veterans
today.
While I am pleased that the Secretary is serious about
modernization of the EHR system within the VA, but not only is the VA-
Cerner contract currently paused, the implementation period is ten
years.
Since I came to Congress in 2005, the budget for the VA Department
has nearly tripled, yet the problems persist.
The VA has one mission - to serve our veterans, and right now, the
VA has lost sight of that mission.
Thank you, Chairman Bergman and Ranking Member Kuster.
I yield back.
[all]