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86–725 2015

VENDORS IN THE OR—VA’S FAILED 

OVERSIGHT OF SURGICAL IMPLANTS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

WEDNESDAY, JANUARY 15, 2014 

Serial No. 113–49 

Printed for the use of the Committee on Veterans’ Affairs 

( 

Available via the World Wide Web: http://www.fdsys.gov 


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COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

DAVID P. ROE, Tennessee 

BILL FLORES, Texas 

JEFF DENHAM, California 

JON RUNYAN, New Jersey 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

PAUL COOK, California 

JACKIE WALORSKI, Indiana 

DAVID JOLLY, Florida 

MICHAEL H. MICHAUD, Maine, Ranking 

Minority Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

ANN KIRKPATRICK, Arizona 

RAUL RUIZ, California 

GLORIA NEGRETE MCLEOD, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

TIMOTHY J. WALZ, Minnesota 

JON TOWERS, Staff Director 

NANCY DOLAN, Democratic Staff Director 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

MIKE COFFMAN, Colorado, Chairman 

DOUG LAMBORN, Colorado 

DAVID P. ROE, Tennessee 

TIM HUELSKAMP, Kansas 

DAN BENISHEK, Michigan 

JACKIE WALORSKI, Indiana 

ANN KIRKPATRICK, Arizona, Ranking 

Minority Member 

MARK TAKANO, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

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. 


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C O N T E N T S 

Page 

WEDNESDAY, JANUARY 15, 2014 

Vendors in the OR—VA’s Failed Oversight of Surgical Implants 1 

OPENING STATEMENTS 

Hon. Mike Coffman, Chairman .............................................................................. 1 

Prepared Statement ......................................................................................... 38 

Hon. Ann Kirkpatrick, Ranking Minority Member .............................................. 3 

Prepared Statement ......................................................................................... 40 

WITNESSES 

Mr. Randall Williamson, Director, Health Care GAO .......................................... 5 

Prepared Statement ......................................................................................... 42 

Accompanied by: 

Mr. Wayne McElrath, Director, Forensic Audit and Investigative Services 

GAO 

Mr. Roscoe Butler, Assistant Director for Health Care National Veterans 

Affairs and Rehabilitation Commission, The American Legion ....................... 6 

Prepared Statement ......................................................................................... 54 

Mr. Philip Matkovsky, Assistant Deputy Under Secretary for Health for Administrative Operations Department of Veteran Affairs .................................. 22 

Prepared Statement ......................................................................................... 59 

Accompanied by: 

Dr. Thomas Lynch, Assistant Deputy Under Secretary for Health Clinical 

Operations Department of Veteran Affairs 

MATERIALS SUBMITTED FOR THE RECORD 

Questions for the Record ......................................................................................... 60 

Questions and Responses for the Record ............................................................... 62 

Letter to Eric K. Shinseki from Chairman, Mike Coffman .................................. 68 


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VENDORS IN THE OR—VA’S FAILED 

OVERSIGHT OF SURGICAL IMPLANTS 

Wednesday, January 15, 2014 

U.S. HOUSE OF REPRESENTATIVES

COMMITTEE ON VETERANS’ AFFAIRS, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

Washington, D.C. 

The subcommittee met, pursuant to notice, at 10:02 a.m., in 

Room 334, Cannon House Office Building, Hon. Mike Coffman 

[chairman of the subcommittee] presiding. 

Present: Representatives Coffman, Lamborn, Roe, Huelskamp, 

Benishek, Walorski, Kirkpatrick, and Kuster. 

OPENING STATEMENT OF THE CHAIRMAN MIKE COFFMAN 

Mr. COFFMAN. Good morning. This hearing will come to order. I 

want to welcome everyone to today’s hearing titled, ‘‘Vendors in the 

OR—VA’s Failed Oversight of Surgical Implants.’’ This hearing examines serious problems with the tracking and handling of surgical 

implants within the VA and follows through on procurement issues 

revealed in a previous hearing by this subcommittee. 

According to multiple sources VA medical centers have allowed 

surgical implant vendors to participate in hands on treatment administered to veterans. Based on my staff’s initial findings I asked 

GAO to investigate these allegations regarding veteran healthcare 

and to determine what policies are currently in place. GAO substantiated that several veterans had received skin grafts that had 

been applied directly by skin graft vendors. GAO found that VHA 

requires each medical facility to develop its own policy on vendor 

access resulting in varying degrees of specificity regarding their 

participation in patient care. 

These findings raise serious questions about the extent of vendor 

involvement in patient care at VA facilities and the lack of clear 

guidance regarding vendor access. VA’s own consent form as well 

as industry best practices state that vendor representatives may be 

present to provide technical advice but may not physically participate in the procedure. However, GAO’s investigation confirms that 

these policies are being unevenly applied or unenforced. Clearly, 

national guidance and oversight is necessary to protect veterans 

who undergo surgical implant procedures. 

There are also significant problems with how VA handles and 

tracks surgical implants in veterans. Previous VA OIG audits criticized the VHA for weak internal controls that jeopardize VA’s ability to identify and notify patients in the event of FDA product reVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 Y:\86725.TXT PAT

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call. According to GAO’s report released on Monday these concerns 

remain and have not been remedied. For some clinical specialties, 

including gastroenterology, interventional radiology, and pulmonary, identifying information on implants was not tracked in 

any system. It is troubling to consider that for these specialties 

VHA was unable to verify that the items purchased were actually 

implanted in the patients for whom they were intended. 

In 2008 VA began developing the Veterans Implant Tracking and 

Alert System, VITAS, to track and retrieve identifying information 

including the lot and serial number of surgical implants placed in 

patients VHA-wide. Unfortunately according to GAO this system’s 

development was suspended at the end of the fiscal year 2012 due 

to data reliability challenges and as of December, 2013 development of VITAS has not resumed limiting VHA’s ability to identify 

and locate patients who have received implants. 

Additionally GAO’s report shows that VA has failed to make sufficient progress with prosthetic procurement reform. In a May 30, 

2012 hearing this subcommittee revealed that VA medical centers 

and VHA regional network contract officers misused waiving authority to spend nearly $3 billion on open market purchases of 

prosthetics, including surgical implants, rather than procure them 

through competitive contracts including those with businesses on 

the federal supply schedule. As a result of the hearing VA acknowledged that there are often several options available for implants 

and that disadvantaged veteran owned small businesses and others 

offering these products were being unfairly excluded from consideration. VA indicated that it would implement reforms so that noncompetitive and sole source purchases would require justification 

on a case by case basis. 

GAO’s report does contain some good news. VA has made some 

progress with obtaining national committed use contracts for nonbiological implants, such as artificial joints, cardiac pacemakers, 

heart valves, and coronary stints. Use of these national committed 

use contracts is the most favored method of procurement for implants under the Federal Acquisition Regulations. However GAO 

also reported that no such contracts have been negotiated for biological implants, such as skin and bone grafts. Moreover contrary 

to a memorandum dated May 23, 2012 from Assistant Deputy 

Under Secretary Matkovsky GAO found biological implants were 

rarely ordered from the federal supply schedule at each VA medical 

center it visited. According to GAO overuse of the waiver process 

continues. It reported that none of the medical centers it visited 

procured surgical implants in compliance with waiver requirements 

for open market purchases. 

Finally it is most disappointing to note that while VA and VHA 

now have procurement oversight components, GAO reported that 

they have failed to impose corrective actions for these deficiencies. 

In conclusion, VA must continue to implement reforms so that 

medical centers procure surgical implants that meet patient needs 

while also ensuring best value. More importantly VA and VHA 

must pay much better attention to patient safety concerns regarding surgical implants. It is way past time for VA to develop national policies that set forth the parameters for vendor access to 

treatment facilities and that implement sufficient oversight conVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 Y:\86725.TXT PAT

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trols. Additionally proper tracking of surgical implants is a problem 

that has been unresolved for far too long and it must be remedied 

post haste. 

[THE PREPARED STATEMENT OF CHAIRMAN MIKE COFFMAN AP- PEARS IN THE APPENDIX] 

With that, I now recognize Ranking Member Kirkpatrick for her 

opening statement. 

OPENING STATEMENT OF HON. ANN KIRKPATRICK, RANKING 

MINORITY MEMBER 

Mrs. KIRKPATRICK. Thank you, Mr. Chairman. I really appreciate 

having this hearing on the purchase and use of surgical implants. 

As we know, it is common for the vendors of medical devices to be 

in the operating room during surgery. But it is very uncommon for 

them to scrub and to touch a patient. So I am really interested in 

the testimony today and in whether or not we need to actually, you 

know, beef up our policies on this. 

On Monday the Government Accountability Office released a reported entitled, ‘‘VA Surgical Implants—Purchase Requirements 

were not Always Followed at Selected Medical Centers and Oversight Needs to be Improved.’’ So that is what we are concerned 

about today. The GAO looked at four VA medical centers and found 

that these hospitals did not always follow VHA policy regarding 

documenting open market purchases of surgical implants, including 

obtaining the necessary waivers to purchase items not covered by 

a VA negotiated contract. Last year VA instituted a new policy regarding purchases above the Federal Acquisition Regulations, FAR, 

micro purchase threshold of $3,000 and below the simplified acquisition threshold of $150,000. Medical facility and regional office officials attributed noncompliance mainly to insufficient VHA guidance and VA staff’s inexperience in completing the new requirements. 

This is a familiar litany to members serving on this subcommittee. It has been noted before that it does not matter how 

good and thorough the policy and standards are if no one follows 

them and there are seemingly no consequences for noncompliance. 

This is what I would like to explore today, in addition to looking 

at the specific allegations and looking at ways to improve the process. 

Surgical implants and the larger issue of medical procurement 

provides us with the classic balancing act of patient and provider 

choice on one hand, and efficiency and savings on the other. These 

are not in my view mutually exclusive concepts. But also there are 

ultimately very few easy answers. Should there be a greater level 

of centralization on procurement? Or should we provide greater 

local autonomy while ensuring that the policies are followed? Indeed, how do we ensure that VA employees are provided the tools 

to do their job and help our veterans, but are also held accountable 

if they do not comply with established policies? 

On the issue of surgical implants, what policies and structures 

are in place to ensure that VA staff is kept fully up to date on advances in the field of surgical implants and the availability of different options? While also ensuring that VA’s contracting efforts 


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are directed toward items that are clinically advantageous and necessary for patient care. 

Our decisions regarding which items to include in a VA negotiated committed use contract made from the top down or the bottom up? And more importantly, are these decisions made rigorously 

and systematically? How effective is the recently instituted program executive office and does this effort have the staffing level 

and financial resources to make a difference and improve the process? 

GAO reported that VHA spent approximately $563 million on 

surgical implants in fiscal year 2012. That is an increase of 28 percent over the 2008 levels. I would like to hear from our witnesses 

today regarding the factors that led to this increase. It is not clear 

to me whether the increase is primarily due to the practice of open 

market purchases or to an increase in either the costs of surgical 

implants or an increase in their use. 

Patient care and safety is our number one concern. That is why 

I am concerned over allegations that surgical implant vendor representatives participated in direct patient care. I want to ensure 

that the VA policies are fully followed in this regard while also recognizing that at times vendor representatives can have an important role in providing technical assistance and education to VA care 

providers. 

So let us begin the conversation on how best to fix the problems 

before us today and work to improve the VA healthcare system and 

the healthcare it provides to our veterans. Spending taxpayer dollars wisely is essential but providing the healthcare that veterans 

have earned and deserve is critical. I look forward to hearing from 

our witnesses today and I yield back. Thank you, Mr. Chairman. 

[THE PREPARED STATEMENT OF HON. ANN KIRKPATRICK APPEARS

IN THE APPENDIX] 

Mr. COFFMAN. Thank you, Ranking Member Kirkpatrick. I ask 

that all members waive their opening remarks as per this committee’s custom. With that I invite the first panel who are now at the 

witness table. On this panel we will hear from Mr. Randall 

Williamson, Director of the healthcare team at the Government Accountability Office. He will be accompanied by Mr. Wayne 

McElrath, Director of GAO’s Forensic Audit and Investigative Services Team. We will also hear from Mr. Roscoe Butler, Assistant Director for Healthcare with the National Veterans Affairs and Rehabilitation Commission at the American Legion. Your complete written statements will be made part of the hearing record. Mr. 

Williamson, you are now recognized for five minutes. 


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STATEMENTS OF MR. RANDALL WILLIAMSON, DIRECTOR, 

HEALTH CARE, GOVERNMENT ACCOUNTABILITY OFFICE; 

ACCOMPANIED BY MR. WAYNE MCELRATH, DIRECTOR, FORENSIC AUDIT AND INVESTIGATIVE SERVICES, GOVERNMENT ACCOUNTABILITY OFFICE; AND MR. ROSCOE BUTLER, 

ASSISTANT DIRECTOR FOR HEALTH CARE, NATIONAL VETERANS AFFAIRS AND REHABILITATION COMMISSION, THE 

AMERICAN LEGION 

STATEMENT OF RANDALL WILLIAMSON 

Mr. WILLIAMSON. Thank you. Good morning Mr. Chairman, 

Ranking Member Kirkpatrick, and members of the subcommittee. 

I am pleased to be here today to discuss GAO’s recent report on 

VA’s purchasing of surgical implants. Surgical implants include biological implants, such as skin and bone grafts, and non-biological 

implants, such as cardiac pacemakers and artificial joints. Today I 

will address three areas of our work. First, VA’s compliance with 

federal purchasing requirements and its oversight of surgical implant purchasing; second, VA’s ability to identify veterans who 

have had surgical implants that are recalled by the manufacturer 

or the Food and Drug Administration; and third, allegations that 

surgical implant vendor representatives participated in direct patient care at VAMCs. 

With me today is Wayne McElrath, who directed our investigative work on vendor participation in surgical procedures at three 

VAMCs. 

Regarding VA’s compliance with purchasing requirements, we 

found through our work at selected VAMCs that VA’s surgical implant purchase requirements were not always followed. For example, when surgical implants are purchased on the open market and 

not through established VA and government negotiated contracts 

where prices have been specifically established, VAMCs are required to file a waiver justifying why the item is being purchased 

on the open market. We found that in many cases such waivers 

were not being obtained or had incomplete documentation. We also 

found that in justifying open market purchases of surgical implants 

over $3,000, VAMCs are not always preparing a written determination that prices are fair and reasonable and/or citing an appropriate rationale for sole source award. We found that oversight over 

surgical implant purchases was not robust and allowed these conditions to persist at VAMCs. 

Turning now to VA’s ability to identify veterans who have received recalled surgical implants, we found that VA is limited in 

its ability to systematically identify and locate all patients who receive surgical implants, which could be a critical factor if an implant is recalled by the manufacturer or the FDA because of safety 

concerns. For example, VA through its own studies has found instances at numerous VAMCs where data on lot and serial numbers 

for surgical implants were not entered into VA’s computerized system for tracking such purchases. This limits the VAMC’s ability to 

match veterans to implants that they received. Absent the ability 

to accurately track implants to veterans receiving them, VA may 

be putting some veterans at risk in the event that surgical implants are recalled. 


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In 2008 VA began developing a new tracking system to remedy 

this problem. But VA’s efforts to develop such a system are currently stalled due to technical challenges and a lack of funding. 

Finally, our investigations of allegations received by the subcommittee disclosed that in some instances a vendor representative 

supplying surgical implants to one of the three VAMCs we investigated was participating in direct patient care at that facility. Specifically, at least as recently as August 2013, a vendor was assisting VA clinicians in applying skin grafts or was himself applying 

skin grafts to several veterans. Without proper precautions, allowing a vendor representative to participate in direct patient care 

could compromise veteran safety. 

While VA allows vendors to provide technical assistance and advice during procedures involving surgical implants, national VA 

policies do not adequately define the degree that vendors are allowed to participate in patient care. Rather, VA relies on VAMCs 

themselves to develop their own procedures in this regard. Absent 

definitive national guidelines VAMCs acting alone may develop different and inconsistent guidelines and controls over vendors, which 

is exactly what we found at the three locations we investigated. For 

example, two VAMCs required background screening for vendors 

accessing the facilities, while the third VAMC did not. Also, at one 

VAMC, written procedures covering vendor access and involvement 

in clinical procedures expressly prohibits vendors from physically 

performing any part of a clinical procedure, whereas written procedures for the other two hospitals are silent in this regard. Also we 

found instances where some VAMCs were not following their own 

written procedures. 

While the results of our findings cannot be generalized to VA as 

a whole, they raise serious questions about the extent that consistent procedures and controls exist with respect to both vendor 

access to VA facilities and vendor involvement in patient care at 

facilities nationwide. This concludes my opening remarks. 

[THE PREPARED STATEMENT OF RANDALL WILLIAMSON APPEARS IN

THE APPENDIX] 

Mr. COFFMAN. Thank you, Mr. Williamson. Mr. Butler, you are 

now recognized for five minutes. 

STATEMENT OF ROSCOE BUTLER 

Mr. BUTLER. Chairman Coffman, Ranking Member Kirkpatrick, 

and members of the subcommittee, on behalf of our National Commander Dan Dellinger and the 2.4 million members of The American Legion, I want to thank you for inviting our organization here 

today to this hearing to address our concerns with aspects of how 

VA implements their prosthetic and implant medicine program. 

As a member of The American Legion’s System Worth Saving 

Task Force, I have been privileged to travel to many VA healthcare 

facilities and see firsthand how programs really work in the field. 

In both my experience working for VA for many years and in my 

travel on behalf of The American Legion, I have seen that conditions in the field do not always match what the folks inside the 

Beltway think they are. There are several problems with VHA policies and implementation of implant medicine healthcare. Most of 


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these problems could be fixed with clear written direction from central office and better oversight and consequences to enforce compliance. 

First, VA still has a problem tracking surgical implants that 

places veterans at risk. An OIG audit from two years ago identified 

that there are expired surgical devices on VA’s supply shelves. Further, GAO report and testimony today indicated that VA has an inaccurate tracking capability in recording the serial numbers of the 

implant surgical devices. The grave concern of The American Legion is that in addition to having expired products on the shelves 

veterans potentially could be walking around today with expired 

surgical implants. The American Legion urges Congress to require 

VA to implement an automated tracking system that addresses 

vulnerabilities by, one, initially recording the serial number of a 

surgical implant device when procured and placed into VA’s inventory; two, record the expiration date; and three, that a record tracking flag be put into place to alert VA staff when the product is near 

its expiration date. 

As there remain limitations to VA’s current supply inventory system and uncertainty surrounding the safety and well-being of veterans currently with implantable devices, The American Legion 

urges VA to verify that there are no veterans with expired surgical 

implants and accelerate its timeline for implementing a new prosthetic inventory system that includes these recommendations. 

Secondly, The American Legion remains concerned that VA does 

not have an official policy on vendors in operating rooms. While 

having vendors in the OR to provide technical advice may be medically necessary, it needs to be made crystal clear that veterans 

have consented and received full disclosure that strictly adheres to 

a clear, delineated VA policy. VA has admitted that they do not 

have a specific policy but indicated the National Center for Ethics 

in Healthcare noted that the presence of vendors in the operating 

room is a common practice in U.S. healthcare. And when there are 

broadly accepted professional ethics standards pertaining to a particular practice VA does not particular reiterate those standards in 

VA policy. Rather it was buried in VA’s consent form under the 

number 15, additional information, which states in part the representative may provide technical advice but not participate in the 

procedure. The foundation of VA policy should be based on and consistent with statutory and regulatory authorities. 

Third, The American Legion has concern about VA making a regular practice of circumventing the supply schedule. The federal 

supply schedule exists for a reason and the vendors on the schedule 

have been carefully vetted. Many of them are important contracts 

with veterans and/or small disabled veteran-owned business owners. While The American Legion recognizes and applauds the need 

to go off schedule in rare circumstances for the medical interests 

of the patient, it is becoming increasingly disturbing that off schedule purchases seem to be more the norm than the exception. 

Let us be clear: the medical health of the veteran is the single 

most important factor in any decision about healthcare in the system. System Worth Saving visits uncovered doctors who choose to 

go off schedule to order stints for heart surgery because they were 

uncomfortable with the durability of the stints on the schedule. In 


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that circumstance you would hope that the doctors err on the side 

of the patient’s safety 100 percent of the time. That said, if doctors 

are consistently going off schedule then either the schedule needs 

to be reformed or the process reformed. No system that is raised 

on circumventing its own process can be considered in anyone’s 

best interest. 

Again, thank you for the invitation to speak today and keeping 

a close focus on ensuring veterans get the most out of their 

healthcare system. We would be happy to answer any questions 

you might have. 

[THE PREPARED STATEMENT OF MR. ROSCOE BUTLER APPEARS IN

THE APPENDIX] 

Mr. COFFMAN. Thank you for your testimony. Mr. McElrath, was 

GAO able to determine why vendor representatives were allowed 

to provide potentially inappropriate patient care at the VAMC 

where the allegations were substantiated? 

Mr. MCELRATH. We were not able to identify one specific reason. 

But some of the rationales that were given were lack of staffing, 

the difficulty of placing grafts on patients without having some assistance, and also a lack of knowledge relative to the particular 

VAMC’s policies and procedures. 

Mr. COFFMAN. Mr. Williamson, based on your report please 

elaborate on the challenges in trying to identify veterans who may 

have received a recalled surgical implant? 

Mr. WILLIAMSON. Well, currently VA has a prosthetic purchasing 

system, which is used to track surgical implants and match them 

with veterans. VA has done a study of that system and found that 

lot and serial numbers were oftentimes were not entered correctly, 

or not entered at all. And that really is a detraction in trying to 

match veterans with implants. 

Also, clinical services within VA have their own systems. Oftentimes, VAMCs or clinical services themselves will design systems. 

They may use spreadsheets, perhaps, kept on a computer. The difficulty with those systems is they are not standardized, and that 

information is not shared among VAMCs. Have augmenting systems. VA is developing a new system called the Veteran Implant 

Tracking and Alert System, VITAS. And that system is designed to 

centralize tracking of implants. 

The difficulty is it still relies on manual input, and the chance 

of human error is still there. VITAS will have the same kind of difficulty in the sense that it is inputted by people. A way to get 

around that is to have a bar coding system where you scan the bar 

code in, and it is put in automatically. And that would solve the 

problem. VITAS is not going that route right now. 

Mr. COFFMAN. Okay. 

Mr. WILLIAMSON. So those are the challenges. 

Mr. COFFMAN. Thank you. Mr. Butler, did you find that VHA had 

clear and consistent policy set forth to ensure a proper and ethical 

procedure when vendors were present during surgery? 

Mr. BUTLER. We asked VA if they could provide us a copy of their 

policy and their response was that they did not have a specific policy. However, the consent was included, the authorization was included in their consent form. So that, this concerns us that they 


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are using guidance from the National Office of Ethics but they 

themselves have not promulgated a standard policy that can be applied consistently across the board throughout VA, or VHA. 

Mr. COFFMAN. Thank you. Ranking Member Kirkpatrick. 

Mrs. KIRKPATRICK. Thank you, Mr. Chairman. Mr. Williamson, 

you probably do not know, but the committee knows, that I have 

over 20 years experience in a hospital and I am really interested 

in hearing from our physician members of the committee about 

this. But it is highly unusual for a rep to scrub in the OR. And in 

the instances that you mentioned, did the reps scrub? 

Mr. MCELRATH. The instance that we identified was the application of biologics, or skin grafts. The interviews that we conducted 

did not mention the words specifically ‘‘scrubbing in.’’ But the 

wound care nurse and the vendor representative actually performed the procedure. 

Mrs. KIRKPATRICK. So the nurse actually, the clinician actually 

performed the procedure, not the rep? 

Mr. MCELRATH. No. From the patient care record the wound care 

nurse indicated that the vendor actually applied the skin graft. 

Mrs. KIRKPATRICK. Okay, that is very disturbing. Can you tell us 

what vendor that was? 

Mr. MCELRATH. Out of respect for the investigative process and 

the fact that we may be making a referral to the VA Office of the 

Inspector General for further investigation, we would respectfully 

request that we provide that information to your committee staff 

after the hearing. 

Mrs. KIRKPATRICK. Thank you, please do. You know, looking at 

the overall goal of cost saving and clinician choice, Mr. Williamson, 

again I would like to know how effective is the VHA’s Program Executive Office? And do you have ideas for us about how to strengthen and utilize that office? 

Mr. WILLIAMSON. We did not look at that specific thing in general. I know in the past the subcommittee was very concerned 

about the use of Section 81–23 and whether that is being overused. 

And that is certainly something we looked at in our examination 

of the purchases, during our review. We see that the use of 81–23 

justification is going down. And used prudently 81–23 is a good avenue for a physician or a clinician to use to provide treatment, the 

best treatment that he or she sees fit for a veteran. But we noted 

when we looked at the justifications for sole source procurement 

that there is a much greater use of emergent and compelling need 

as the basis of sole source purchases as opposed to 81–23 saw a flip 

flop. The 81–23, box is not being checked anymore, but rather urgent and compelling need is. 

Mrs. KIRKPATRICK. You know, and those of us who have experience in healthcare know that the medical device industry changes 

quickly. There are always new devices coming out. And did you 

look at the training that the clinicians have in terms of educating 

them on the best products, the best use? Did you look at all about 

adequacy of training? 

Mr. WILLIAMSON. Are you talking about the clinicians or the vendors? 

Mrs. KIRKPATRICK. The clinicians, yes. 


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Mr. WILLIAMSON. We did not. We have in the past done some 

fairly thorough studies of credentialing and privileging systems 

that both VA and DoD have. We did not look at that training during this review. 

Mrs. KIRKPATRICK. Mr. Butler, did you look at that at all? 

Mr. BUTLER. We did not. 

Mrs. KIRKPATRICK. You did not. Okay. Mr. Chairman, I am going 

to yield back. I really want to hear from our physicians on the committee. 

Mr. COFFMAN. Thank you, Ranking Member Kirkpatrick. Dr. 

Huelskamp. 

Dr. HUELSKAMP. Thank you, Mr. Chairman. I am a doctor but 

not a physician, so there will be no confusion here. But I do have 

some questions, particular of the GAO and I apologize for my voice 

this morning. You made some mention to the issue of urgency and 

perhaps timeliness as far as the purchases on the open market 

versus those through the VA purchasing requirements? Did you 

compare cost or quality, or any other characteristics? I see you 

looked at a certain percentage of those. I did not know if you had 

compared the outcomes and the cost and such? 

Mr. WILLIAMSON. Could you repeat the last part of the question 

again? 

Dr. HUELSKAMP. You mentioned you compared a few purchases, 

about I believe six percent of a certain subset. Did you look at the 

cost? Was it more or less expensive? Did you look at the quality? 

Was there any timeliness? As far as comparing those purchases in 

those two environments? 

Mr. WILLIAMSON. Yes, we did not look at whether they got the 

best price. What we did was rather to focus on the documentation 

and see whether that existed. And in many cases, it did not exist 

to our satisfaction. 

Dr. HUELSKAMP. Okay. Yeah, and I did not see that in the report. 

That is why I wanted to ask. The follow-up question would be, 

what is the penalty for failing to comply with the VHA purchasing 

requirements? 

Mr. WILLIAMSON. Well agencies are also governed by the Federal 

Acquisition Requirements. It is certainly something that can cause 

a reprimand within the agency. 

Dr. HUELSKAMP. Any evidence that there was any reprimand or 

any penalties for failing to follow up? 

Mr. WILLIAMSON. No. A lot of times when waivers are not obtained, when the documentation is not obtained, it was not followed 

up on by VA and there was no action plan by VA to correct those 

kind of weaknesses. 

Dr. HUELSKAMP. Sure. Okay. The next question would be I see 

you are experience at working with the health systems in the Department of Defense as well. Could you give a broad comparison 

between VA and the DoD? Do they have these similar problems, 

and are you familiar with that enough to answer? 

Mr. WILLIAMSON. We have not looked at similar issues like surgical implants in DoD, if that is what you are talking about. No, 

we have not. We did look at how some large healthcare systems 

like Kaiser in the private sector surgical are purchasing implants 


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under their contracts. And they are much more aggressive than VA 

in trying to get items under contract. 

Dr. HUELSKAMP. Mm-hmm. But you did not look at the cost comparison there? 

Mr. WILLIAMSON. No. 

Dr. HUELSKAMP. Okay. The last question will be for Mr. Butler, 

and I am very concerned about the patient privacy and the instances that were repeated here, and it is occurring. But what are 

your suggestions? What should be able to be authorized by a patient? If I understood correctly, you believe the language that was 

used probably authorized the vendor to be in the care situation. Is 

that your understanding of what—— 

Mr. BUTLER. No, it does not authorize, the language in their consent form does not authorize the vendor to provide hands-on care. 

It authorizes the vendor to provide technical advice. But that is a 

contract between the vendor and the patient, it is not a national 

policy. So we advocate that the VA establish a national policy that 

articulates all of the requirements for allowing vendors in the OR. 

And then use the consent form as the agreement between the vendor and the patient. We believe that if they have a national policy, 

as I stated, the foundation of VA is predicated upon the statute, 

the regulations, and the policy that VA adopts. And without a policy there is no requirement that facilities operate in a consistent 

manner or fashion. 

Dr. HUELSKAMP. Well thank you, Mr. Butler. I agree as well. And 

I yield back my time, Mr. Chairman. 

Mr. COFFMAN. Dr. Benishek. 

Dr. BENISHEK. Thank you, Mr. Chairman. I am a general surgeon and I have been in the operating room, you know, lots of 

times. I have never actually seen a vendor, you know, do a case. 

So Mr. McElrath, can you, was this a couple instances of some vendor putting on a skin graft? Is that what you are saying? Is there 

any other episodes that you encountered that the vendor was involved with a case? Or is it a couple—— 

Mr. MCELRATH. We found two cases where vendors were actually 

involved but there were several instances over a period of time. By 

speaking to clinicians that we interviewed during the course of this 

investigation, we were able to identify those records. If the clinicians had not input that information directly into that patient 

record, all we would have is witness testimonies. It made it easier 

for us to corroborate their statements because they actually entered 

into the patient record who placed the skin graft. 

Dr. BENISHEK. Well, you know, it is frankly shocking to me that 

this actually happened. You know, I am a little concerned about, 

you know, standards that come from Washington to every VA because all that stuff gets messed with. But it seems to me that each 

hospital should have rules, like the Joint Commission on Hospital 

Accreditation would not go for this. I mean, this would not fulfill 

the accreditation needs of any hospital that I know of. And, you 

know, I think that rule should be developed at the hospital. They 

should be, you know, reasonable rules. And I cannot believe that 

a, you know, something must have been wrong. I mean, Mr. 

Williamson, you said that some of the hospitals had no rules 

about—— 


VACREP180 with DISTILLER
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Mr. WILLIAMSON. The three we looked at had written procedures, 

but those procedures were inconsistent and they left out some of 

the things that—— 

Dr. BENISHEK. Well in my experience, you know, which is in the 

private sector mostly, but I have had some experience in the VA 

system as well, you know, each hospital is required to have a set 

of rules and procedures, you know, to be accredited by the Joint 

Commission. 

Mr. WILLIAMSON. Right. 

Dr. BENISHEK. You know, which, you know, sets a standard for 

not only the VA but for, you know, private sector hospitals which 

I hope that the VA would be in the same boat. And the VA that 

I worked at, you know, we were inspected. And this type of stuff 

I think would fall out of an inspection, you know, immediately if 

they were aware of it. What can we do? I guess really the problem 

to me is accountability. I mean, nobody at the, you know, the problem I come up with again and again in this committee is that when 

errors like this are found, nobody seems responsible. There is not 

one individual that you could point to and say this is your responsibility and you need to be reprimanded or change your ways, put 

it in your performance review. Has any of that occurred in any of 

these circumstances that you know of? 

Mr. WILLIAMSON. You are talking about the vendor? 

Dr. BENISHEK. Well, no. I am talking about the hospital people 

that allowed this to happen. I mean, you know, you never get to 

a person whose responsibility it was, then they could identify, you 

know, report this place in their performance review saying that, 

you know, they did not comply with the rules of the hospital. 

Mr. WILLIAMSON. Mm-hmm. 

Dr. BENISHEK. And, you know, you may be subject to termination, you may be subject to disciplinary action. The accountability of the administration of the hospital or, you know, the upper 

echelon is always of importance to me. Because it seems to never 

happen where one person gets identified as being a problem. And 

you know, a culture of lackadaisical performance seems to be allowed a lot of the time within the VA. So as far as you know, has 

anybody been disciplined or had a report placed in their—— 

Mr. WILLIAMSON. No. 

Dr. BENISHEK. Well we will ask the VA, too. But I just was hoping that maybe you guys could. Let me also ask about this vendor, 

or the purchase of materials. You know, as a surgeon I want to 

work with the materials and the devices that I am familiar with. 

Mr. WILLIAMSON. Right. 

Dr. BENISHEK. Okay? So sometimes I would be upset that the 

VA, you know, really want to use this thing which I never used—— 

Mr. WILLIAMSON. Mm-hmm. 

Dr. BENISHEK.—and I am not comfortable with it. So I want to 

have the implant or, you know, the device that I am comfortable 

with and used to using. And I think that many surgeons have that 

same, you know, preference. 

Mr. WILLIAMSON. You are correct. 

Dr. BENISHEK. But there is no reason why when you come to the 

hospital and set up you can tell them all of what you are going to 

use. 


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Mr. WILLIAMSON. Mm-hmm. 

Dr. BENISHEK. And they should be able to set up a plan to purchase that, you know, in a price advantageous. And I think that 

is a problem. And I think that is a problem related to how this is 

working here. Because the surgeon comes in, the VA will not put 

it on their formulary for whatever reason, and the guy says, ‘‘Well 

I am not doing the case unless I get the stuff that I am familiar 

with.’’ So is there any evidence of that happening? 

Mr. WILLIAMSON. Well when we went to four different VA hospitals across the country to look at this we interviewed 28 clinicians, and we asked them that very question. Why do you choose 

surgical implants from the open market in many cases when these 

are on contract? And it comes down to, number one, the best interest of the patient. In other words, veterans sometimes have unique 

needs and they have implants that best suit their treatment needs. 

The other reason is like you say, ‘‘what are you comfortable in 

using?’’ ‘‘What have you been trained on in terms of the surgical 

implants?’’ Also, other reasons include the literature searches that 

they might have access to in terms of the effectiveness of implants 

and contacts with surgical implant vendors. 

Dr. BENISHEK. Well that does not preclude the ability of the VA 

to enter into contracts with people that provide a myriad of different devices. I mean, there are lots of VAs across the country. 

You know, there may be ten different devices and, you know, a 

hundred different surgeons may use each one of those differently. 

Mr. WILLIAMSON. Right. 

Dr. BENISHEK. So I do not see how that, that does not preclude 

the ability for the VA to contract with multiple providers for the 

same type of—— 

Mr. WILLIAMSON. Right. 

Dr. BENISHEK [continuing]. Implant. And that does not seem to 

happening. 

Mr. WILLIAMSON. The key is for VA to get more items under contract to get a good price. 

Dr. BENISHEK. Right. 

Mr. WILLIAMSON. And right now we only have nine types of 

items under national committee use contracts that VA has with 

vendors. And one of the things that we recommended was that VA 

take a more aggressive posture in—— 

Dr. BENISHEK. There are only nine? 

Mr. WILLIAMSON. There are only nine, all non-biological implants. 

Dr. BENISHEK. Out of the thousands of implants, different types 

of implants available? 

Mr. WILLIAMSON. Yes. They are the highest—— 

Dr. BENISHEK. That is a shocking number—— 

Mr. WILLIAMSON [continuing]. High volume and high cost items. 

Dr. BENISHEK [continuing]. Because that is a very small number 

of the different implants that it happens. 

Mr. WILLIAMSON. Right. 

Dr. BENISHEK. That is a major deficiency that I think you have 

identified here at a high level within the VA. Because there should 

be a thousand different implants on the VA formulary. You 

know—— 


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Mr. WILLIAMSON. Now there are, in addition to the national committed use contracts, there are the federal supply schedule contracts. And there are a number of both biological and non-biological 

surgical implants on the FSS. So there are other lists to choose 

from. But the first choice would be the national committed use contracts because those give VA the best prices. 

Dr. BENISHEK. My time is expired. Thank you. 

Mr. COFFMAN. Congresswoman Walorski. 

Mrs. WALORSKI. Thank you, Mr. Chairman. Mr. Williamson, I 

just, the information is just shocking. And every time we sit in 

these Oversight Committee hearings with these reports, which I 

very much appreciate, it is just shocking I think to the American 

taxpayers and to all of us who sit here who want to provide the 

absolute finest services to our best and brightest servicemen and 

women and to hear these kind of reports. And I guess, you know, 

one question I have is it just is shocking to me that there are national medical device tracking efforts already. Would it not behoove 

the VA to look at something that is already in place like the UDI 

if they obviously have not been able to successfully track implants? 

Mr. WILLIAMSON. I do not think there is any, I do not think that 

it necessarily would provide the information VA needs on surgical 

implants. I think that the trouble is there is no centralized system 

right now. The prosthetics purchasing system has some weaknesses, as I reiterated in my opening remarks. And VA is trying 

to develop a centralized system in addition to a number of systems 

that the surgical services are using on their own. So there are two 

sets of books here. 

Mrs. WALORSKI. Is there a bar code system set up—— 

Mr. WILLIAMSON. No. 

Mrs. WALORSKI [continuing]. In the VA where those implants are 

just bar coded before they—— 

Mr. WILLIAMSON. Not to my knowledge, no. That would take 

away the human error and that would probably be the best system. 

A system based on bar coding would be a better system. 

Mrs. WALORSKI. And what about the FDA’s UDI system? Or 

what about the American Joint Replacement Registry, AJRR? Or 

something as simple as just having some kind of a standardized 

policy of a scanner where it is literally just scanned into a system 

that tracks? 

Mr. WILLIAMSON. Yes, that would be, something that could be 

considered. Again, it is a scanning system. It alleviates—— 

Mrs. WALORSKI. But what happens when, what happens when, 

you know, we see a recall of some specific device that has been implanted and it has affected X amount of people? How do they know 

if that is implanted in a veteran? 

Mr. WILLIAMSON. Well, you have got to rely on your systems that 

you have already in place and identify through serial numbers, lot 

numbers, medical records, other kinds of things—— 

Mrs. WALORSKI. But when human error puts a wrong code or 

wrong—— 

Mr. WILLIAMSON. I am not saying it is impossible because if 

there was a recall there are existing ways to trace it. Certainly 

going through the medical records. But that is a long, laborious 


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project. And it is also subject to human error. Would somebody detect it as they are going through all that? 

Mrs. WALORSKI. Thank you, Mr. Chairman. I yield back my time. 

Mr. COFFMAN. Thank you. Dr. Roe. 

Dr. ROE. I thank the chairman for yielding and thank you for 

this testimony. Let me just, having been involved in a lot of devices 

and having an implantable device in my eye right now, and I actually can read your name, something I could not do before my device 

was implanted. I would like to go about how the procedure, how 

this actually works in the private sector. And Dr. Benishek alluded 

to it. Let us say a uterine ablation or any other new procedure that 

comes out, as a surgeon you have to go and be trained. There are 

standards in your hospital that require a certain number of hours 

of training before you can do that. And there may be some technical assistance in the operating room if you are operating a piece 

of machinery or whatever that you need a vendor there for. 

Mr. WILLIAMSON. Mm-hmm. 

Dr. ROE. I completely agree that the vendor has no place in actually doing the procedure. You as the surgeon are trained to do that 

procedure. And the technical advice are there are just things that 

come up that happen during the procedure. So I certainly understand the need for, and Ms. Kirkpatrick clearly pointed it out, 

these changes are happening at light speed. 

Now I would be very uneasy if I knew that this device in my left 

eye could not be kept up with. If we did not know, that there was 

some reason it could not be tracked. Because as you know, and 

mostly in orthopaedic, that is where most of the implants are, that 

sometimes these fail. And if you find a behavior of failure throughout these you would like to be able to track down the patients and 

tell them that, hey, this device has some risk to you or could do 

this. Look out for these symptoms. As a physician I would want to 

be able to inform my patients that that happened. 

So the way it worked in our hospital is when the new procedure 

came out you had to have a certain amount of training, be certified 

in that procedure, and then carry out that procedure a number of 

times. And then many times I would mentor other people, teach 

them how to do the procedure. And the old saying in years gone 

by, see one, do one, teach one, that has sort of gone by the wayside 

now. 

You are absolutely right, a system, whether it is bar coding, that 

is the simplest thing in the world. I mean, Walmart can tell you 

how many bars of soap went out of Walmart in Tennessee. You 

ought to be able to keep up with a lens implant or a knee implant 

and find out who they are. That is fair, technology is there, it is 

not new. So I think those kinds of things are fairly simple. And I 

do not believe that we have a problem here that can be easily 

solved with the systems that are in place. And maybe it will require a new IT, I do not know, Mr. Williamson, whether it will or 

will not, or whether those current systems are available. But this 

is not new. I mean, we have been doing this for 25 years. And we 

are going to continue to do it. And especially as our population ages 

and more and more implantable procedures are done. I mean, how 

many people have you met now that cannot go through an airport 

because they set off a metal detector they have had so many deVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 Y:\86725.TXT PAT

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vices implanted in them? And we have to have a way to track 

those. Because not all of them are perfect, there is no question 

about it. And the reason it is important to be able to track those 

is because when you find out what those defects are it gives the 

manufacturer and the engineers a chance to improve those and 

make them better for future patients. So I mean, I think, Ms. Kirkpatrick, I have learned, I know your background, and I certainly 

believe what we have got here, and I agree with Dr. Benishek, I 

am not sure we need a national policy. But each hospital, that is 

fairly simple stuff. And I will yield to anyone who wants to respond. Mr. Butler, I read your testimony and agree with much of 

it. But again, this is not reinventing the wheel. 

Mr. BUTLER. If I may? 

Dr. ROE. Yes, sir? 

Mr. BUTLER. With regard to your comment about the national 

policy, the local hospitals develop their local policies based upon 

the national guidance from the central office. So if they do not have 

national guidance from central office, their local policies may be inconsistent from one facility to the next. So there needs to be consistency across all the VA healthcare system. And that consistency 

comes from the national guidance provided by the program office 

out of DC. 

Dr. ROE. I certainly, I cannot argue with that, some consistency. 

The other thing that I think we get into is surgeons. And I get this. 

You know, I like a certain type of suture. Is it vicryl? Is it chromic? 

Is it whatever? Do I like staples? Do I like this particular staple? 

I mean, those things change so fast and there needs to be some 

consistency because error rates go down when you have, there is 

no question, when you have a policy and a procedure that you go 

through just like taking an airplane off. We learned that in our operating room, that the more consistent that you could do it and the 

more frequently you did it the same way, the less errors there 

were. But there ought to be some latitude because not everybody 

falls under the bell-shaped curve, as Dr. Benishek clearly pointed 

out. And what you are familiar and used well and had good success 

with. So procuring that, and I understand if you have got ten surgeons the procurement officer in a VA cannot procure ten different 

types of suture for that when it really does not make any difference 

on the long term outcomes and the data will prove that. And this 

should be data driven and not just cost driven. And I think unfortunately what happens a lot of times these things are cost driven 

and not data driven. 

I would yield back my time. 

Mr. COFFMAN. Thank you, Dr. Roe. Mr. Lamborn from Colorado. 

Mr. LAMBORN. Thank you, Mr. Chairman. And I want to thank 

you for having this important hearing and for your work on this 

issue. So I appreciate that. 

Mr. Williamson, your report noted that the fair and reasonable 

price determination was not completed for a number of open market purchases that you reviewed and not properly documented in 

other cases. Does this mean that the VHA was overpaying for surgical implant purchases from the open market? 

Mr. WILLIAMSON. Not necessarily. We did not look at, the cost 

itself. Rather we just looked at the documentation that existed to 


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support that. But it does certainly make it more likely that the fair 

and reasonable price was not obtained. Even when we looked and 

examined documentation when there was an explanation, sometimes the explanation was not too good. For example the language 

might say that it was based on prior prices. And yet the prior 

prices were not delineated. So, it is just a statement and nothing 

more. Another case we found for example, was a case of a bone 

graft that was supposed to cost $6,000 and the fair and reasonable 

price determination was based on a price range of other bone grafts 

that ranged from $3,000 to $20,000. And, on the basis of that 

range, the VA staff person determined that the $6,000 bone graft 

was fair and reasonable. That is probably not the precision that 

you would want in determining the reasonableness of that $6,000 

bone graft. So even when the documentation was there, it was not 

very good in many cases. 

Mr. LAMBORN. Okay, thank you. And Mr. Butler, I have a question for you. In your testimony you indicated that the American Legion is utilizing a System Worth Saving Task Force. Can you 

please elaborate on the task force and what it found regarding implant tracking? 

Mr. BUTLER. Well in 2003 our Past National Commander Ron 

Connelly, when he was the Commander, went out and visited over 

60 VA healthcare facilities looking at the quality of care and access 

within the VA healthcare system. As a result of that at our national convention a resolution was adopted that the System Worth 

Saving Task Force continue those site visits. So every year the 

American Legion System Worth Saving Task Force identifies a 

theme. This year our theme is a ten-year look back at the VA 

healthcare where we are visiting 15 VA healthcare facilities and we 

are looking at the access, the quality of care that is provided to 

America’s veterans. 

So with regard to your question about what findings we found as 

it relates to implants, we have not really focused, that has not been 

the focus of our attention. But we are beginning to, since this was 

a part of the hearing, as we go out on our site visits we are beginning to ask those questions in terms of procurement and so forth 

to see what systems and what concerns veterans have. When we 

go out to a site visit we have a town hall meeting with veterans 

and we bring those veterans in so that they can tell us what are 

the concerns and the issues they have. So we are asking veterans 

what concerns, issues they might have so that we can when we 

meet with the medical centers we can address those intelligently 

to find what, to get their response to those issues. So as we are 

continuing our site visits we are beginning to focus on those questions. 

Mr. LAMBORN. Okay. I appreciate your work and the American 

Legion’s work on that. And Mr. Williamson, I have a follow up 

question. Does ‘‘open market’’ mean the possibility that items are 

not Trade Agreement Act compliant? 

Mr. WILLIAMSON. Not necessarily. No, I do not think so on that 

one. If I understand your question right. 

Mr. LAMBORN. Yeah, what I am trying to get at is there potential 

that there are gray market products that the VA is using? 


VACREP180 with DISTILLER
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Mr. WILLIAMSON. There is always that potential, although we did 

not, notice that when we did our work. 

Mr. LAMBORN. Okay. I appreciate that. Mr. Chairman, I yield 

back. 

Mr. COFFMAN. Thank you, Mr. Lamborn. Mr. Williamson, what 

are the implications of low compliance with waiver requirements 

for purchasing surgical implants from the open market? 

Mr. WILLIAMS. Two things come to mind here. One is an accountability factor. The waiver requirements are there for a reason, to 

make sure that people go through a thoughtful process, that clinicians go through a thoughtful process when they choose open market items. And that is one factor. The other factor is that the information that VA can glean from a waiver, has a connection to national contracts, establishing more national contracts. For example, 

VA gets information on high volume, high use items, through the 

waiver process, that are being purchased on the open market. VA 

can use that data to identify items that they should pursue under 

a national contract. So that is a very important part of having good 

solid waiver information. 

Mr. COFFMAN. Okay. And Mr. Williamson, your report identified 

shortcomings in VA and VHA oversight of surgical implant purchasing. How do you think that oversight could be improved? 

Mr. WILLIAMSON. Well, one of the things that both VA and VHA 

have done is to perform separate studies looking at surgical implant purchasing they came up with basically a number of the 

same findings that we did. The difficulty was that when they identified areas of noncompliance and talked to VAMCs about them it 

was more in an advisory capacity, a disclosure category, as opposed 

to doing something about it. And one would expect, and what we 

expect when we recommend something to somebody, is that they 

come back with an action plan or something of that nature to make 

sure it happens. 

Mr. COFFMAN. And Mr. Williamson, you know, finally your report 

discussed low compliance with waiver requirements for purchasing 

surgical implants from the open market. Why were facilities not 

fully compliant? 

Mr. WILLIAMSON. There were a couple of reasons. As you know, 

VA is implementing a new system for surgical implants and purchases over $3,000. Over the last year or so it has been a major 

effort with VAMCs across the country. People that we asked in the 

VAMCs about why they did you not prepare waivers or why are 

these not on file told us that the higher priority was to get this new 

system in place. And that was one of the reasons. Also as other 

members have alluded, to physicians who practice in VA facilities 

often have outside practices. They may be working at VA part-time. 

And so they are not always as familiar with the waiver rules. And 

those are basically the two reasons that we heard when we asked 

that question. 

Mr. COFFMAN. Thank you, Mr. Williamson. Ranking Member 

Kirkpatrick. 

Mrs. KIRKPATRICK. Thank you, Mr. Chairman. Dr. Roe, I agree 

with you that we should try to solve this problem within the existing policies that we have. However, Mr. Chairman and the committee, if it is the consensus of the committee that we need a new 


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policy I think we need to be very careful that we protect that local 

control. Because doctors, as you stated and Dr. Benishek as well, 

we want our physicians to have the tools that they are comfortable 

with because ultimately our goal is the best patient care possible 

for our veterans. So I think we have to be careful and keep that 

in mind and give our physicians, men and women, the best tools 

that are available so that they can deliver the best patient care. 

That said I would like the panel’s thought about this idea. When 

a vendor’s rep crosses the line and actually touches a patient in the 

OR, would it not be more effective just to terminate the contract 

with the vendor? Terminate the contract? 

Mr. WILLIAMSON. That is certainly a possibility. And again, if you 

really want to enforce the idea that vendors, have no hands on 

treatment ability in VA hospitals, there have got to be some fairly 

stringent requirements and penalties in place. I can probably think 

of a number of things in terms of improving the whole access process for vendors in VAMCs. It starts with getting them to sign in 

at the police office when they arrive. We found, for example, that 

at one facility we looked at the log in the police office that vendors 

were supposed to complete in had not had an entry since 2011. And 

we knew that vendors had been in there many times. So there are 

a number of things in the whole access process that need to be addressed, it is not just in the operating room or during procedures 

it is the whole access that needs to be changed. 

Mrs. KIRKPATRICK. And maybe the procurement process, making 

sure that those contracts have some clause in there that if a rep 

actually touches the patient their contract is terminated. Mr. Butler, do you have any opinion on that? 

Mr. BUTLER. Well, you know, there may be provisions already in 

the contract that covers that. They have to look back at the contracts and see specifically what the contract states. And I would 

agree that if there are not any particular provisions that allow 

that, that there needs to be something. Because that is a violation 

of what the veteran consented. The veteran, based upon the current consent form the veteran did not consent for the vendor to 

participate in the surgery. So clearly that is a violation of the 

agreement between the veteran and the clinician. 

Mrs. KIRKPATRICK. Right. You know, and my interest is not, you 

know, again, it is making sure we have got the best patient care 

possible for our veterans. But let us do not make the physician’s 

job more difficult. You know, let us look at the vendor who actually 

violated that consent form. 

Back to the bar code and the tracking, Mr. Williamson, does not 

the VA track medication by bar code already? I mean, is there not 

a system—— 

Mr. WILLIAMSON. I believe so, but I am not sure of that. 

Mrs. KIRKPATRICK. Okay. Again, I think we should look at what 

is working within the VA system. I am pretty sure they track medications. I do not know why they cannot track medical devices. 

Thank you, Mr. Chairman. 

Mr. COFFMAN. Thank you, Ranking Member Kirkpatrick. Dr. 

Benishek. 

Dr. BENISHEK. Thank you, Mr. Chairman. I did not really touch 

upon the other issue that we are talking about and that is the 


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tracking. Some of the other members did. But frankly I just cannot 

believe that that does not happen either. I mean, like Dr. Roe mentioned it has been going on in the private sector for 25 years. And 

you know, you know, constantly with every device that I know of 

comes with a sticker with a bar code on it. And you put it in the 

chart, you know, so that it is thoroughly documented, you know, 

what device is in which patient. And I just cannot believe that this 

goes on. And it brings me back to my same question I had, and 

that is the accountability of when these errors occur. What can we 

do better to identify, you know, the people who manage this system 

and to make them accountable for these errors? Do any of you have 

an idea about that? 

Mr. WILLIAMSON. Well, keep in mind that people, are looking at 

a surgical implant package and there are numbers all over the 

package. Given that, there can be a very innocent transposition of 

numbers. It is not something intentional, it may not be done a lot, 

but it does happen and there are enough cases happening that it 

leads one to have concern if a recall occurs. 

Dr. BENISHEK. Oh, I understand that errors can occur, you know, 

among the OR scrub nurse, or the circulating nurse. But, you 

know, that is uncommon. I mean, and I think, you know, a procedure like with a sticker where there is not going to be a transposition of numbers because you are going to be placing the sticker 

that came with the device in the patient’s chart—— 

Mr. WILLIAMSON. Right. 

Dr. BENISHEK [continuing]. And in some kind of a hospital tracking system and scanned into the computer, that happens all the 

time. But making sure that that system is in place is somebody’s 

job. And that is what concerns me about, you know, the VA in general, that nobody seems to be accountable for things like this when 

we bring them up in these committees. I mean, we have issues like 

this that come up with in the VA all the time and we never get 

down to, you know, whose job it was to do that? And, you know, 

are they being, getting the right oversight? 

Mr. WILLIAMSON. That is probably a good question for VA. I 

would think that the IT people should be all over that. But again, 

I think that is a question that you should address to VA. 

Dr. BENISHEK. Well I am going to let Dr. Roe talk as well. Thank 

you. 

Mr. COFFMAN. Thank you, Dr. Benishek. Ms. Walorski. Dr. Roe. 

Dr. ROE. I guess the question that I have now is we have identified the problem. It is pretty simple, really. And the question is 

what recommendations would you all have? And I agree with 

Ranking Member Kirkpatrick. You want to make sure that the job 

I have when I go in the operating room is as easy as possible. I 

think some of the, Dr. Benishek, who is a general surgeon, touching this about who is accountable is that he knows who is accountable when they put the knife in his hand, it is him. 

Mr. WILLIAMSON. Right. 

Dr. ROE. And he does not have to look anyplace but the mirror. 

And with the VA system we continually try to find out well whose 

job was it that was to prevent this? I think that is a little bit of 

your frustration as I, and mine also. But I guess very simply what 

recommendation would you all have for us? This is a fairly simple 


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problem to solve. And we do need these folks. And Ms. Kirkpatrick 

may have hit on something. If you cannot go back in the OR, that 

is the death penalty. I mean, for a vendor that is the death penalty 

for them. And that company cannot do that. And you do need, 

when you get these new devices many of them are, procedures I 

mean, are highly technical. And until you have a real sense of familiarity with them, you know, everybody is going to do their first 

procedure at some point in time, whether it is, it may be some variation of what you have been doing. But when new techniques come 

out, you are going to learn those techniques, but somebody has got 

to be the first one. And you know, hopefully it goes well, and you 

need assistance with that. So we do not want to stop that certainly. 

But there is, I do not see any reason to ever have a vendor having 

any hands on with a patient. I just cannot conceive of a situation 

where you would need to do that. Can you, Dan? 

Dr. BENISHEK. No. 

Dr. ROE. Okay, I do not either. And so let me yield to you all. 

And give us two or three things that we need to do, and let us get 

this done. 

Mr. WILLIAMSON. Well with regard to that, a national policy governing the hands on treatment of veterans I think, is important, 

as Mr. Butler has said, a national policy or national procedure as 

a template is needed for the VAMCs so they are not all going out 

and doing their own thing. And as I said in my opening remarks, 

we found variation and inconsistency in that regard. Now, you have 

heard throughout the questions and answers and in my opening remarks the word ‘‘accountability.’’ And accountability for oversight 

and accountability for properly preparing a waiver and other requirements that go into purchasing. That word is important 

throughout any of the recommendations we make. There has got to 

establish accountability people to do what they are supposed to do. 

And it varies as far as where accountability lies. Sometimes it is 

the clinician, sometimes it is the procurement folks. In other cases, 

it is people in Washington, DC. 

Dr. ROE. So the policies would be a reliable, repeatable tracking 

system for any implantable device. 

Mr. WILLIAMSON. Mm-hmm. 

Dr. ROE. Fairly simple technology now, should be able to take 

care of that easily. Number two, there should not be any vendor 

contact with, direct patient care, I should say. To advise you about 

how to use a particular piece of technical equipment, that is what 

they are there for. To turn this device this way, you have seen 

other surgeons do that. I certainly have used them very successfully in the operating room. But no direct patient contact. And then 

I think thirdly the procurement is a little different issue because 

it does get into, and I do see, like I said if you have got ten different surgeons, and we all think we are absolutely right every 

time. You know that. And that our way is the best way. And so I 

do understand some standardization. But I think at least those two 

things we could agree on today and implement those things and I 

think would solve most of these problems. 

Mr. WILLIAMSON. That makes sense. 

Dr. ROE. Okay. I yield back. 

Mr. COFFMAN. Thank you, Dr. Roe. Mr. Lamborn of Colorado. 


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Mr. LAMBORN. Thank you. Just a quick comment, I have a plant 

in my district and I toured it recently and they do marvelous work 

creating these amazing implantable devices, everything from little 

pins and screws to large bone grafts, apparatuses, and things like 

that. And it is just amazing the amount of work and engineering 

and experience that goes into one of those. And I just think that 

they have been a wonderful partner in working with the VA and 

the medical field at large to improve the lives and the prognosis of 

patients who have all kinds of, and veterans who have all kinds of 

medical difficulties. So I just want to make sure that no one ends 

up blaming them or in case the VA has procedures that need to be 

improved. So let us not lose our focus. I mean, this is the VA that 

we need to have in front of us. And we are really making sure their 

procedures are up to speed and that the accountability with the VA 

is what it should be. So I just wanted to make that clarification. 

Mr. Chairman, I yield back. 

Mr. COFFMAN. Thank you, Mr. Lamborn. And I want to thank 

the panel so much for your testimony. And let us see, you are now 

excused. I now invite the second panel to the witness table. Our 

second panel, we will hear from Mr. Philip Matkovsky, Assistant 

Deputy Under Secretary for Health for Administrative Operations 

at the Veterans Health Administration. He will be accompanied by 

Dr. Thomas Lynch, Assistant Deputy Under Secretary for Health 

Clinical Operations at the Veterans Health Administration. Your 

complete written testimony will be made part of the hearing record. 

Mr. Matkovsky, you are now recognized for five minutes. 

STATEMENT OF MR. PHILIP MATKOVSKY, ASSISTANT DEPUTY 

UNDER SECRETARY FOR HEALTH FOR ADMINISTRATIVE OPERATIONS, DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY DR. THOMAS LYNCH, ASSISTANT DEPUTY UNDER 

SECRETARY FOR HEALTH CLINICAL OPERATIONS, DEPARTMENT OF VETERANS AFFAIRS 

STATEMENT OF PHILIP MATKOVSKY 

Mr. MATKOVSKY. Mr. Chairman, Ranking Member Kirkpatrick, 

and members of the committee, thank you for the opportunity to 

appear before you this morning to discuss the Department of Veterans Affairs’ practices regarding the use, tracking, and procurement of surgical implants at VA medical centers. I am accompanied 

today by Dr. Thomas Lynch—— 

Mr. COFFMAN. Make sure that your microphone is on, could you 

do that? Is it on? 

Mr. MATKOVSKY. I believe it is. Perhaps it is not functioning? 

Can you hear me now? 

Mr. COFFMAN. The light is on now. 

Mr. MATKOVSKY. All right. I am sorry about that. 

Mr. COFFMAN. That is all right. 

Mr. MATKOVSKY. I am accompanied today by Dr. Thomas Lynch, 

Assistant Deputy Under Secretary for Health for Clinical Operations. The Veterans Health Administration has made significant 

changes in the last three years to the way we procure surgical implants and prosthetic appliances for veterans. These changes are 

intended to improve procurement, performance, and accountability 


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while ensuring effective healthcare delivery for veterans. Beginning 

in fiscal year 2012 and concluding at the end of fiscal year 2013, 

we transitioned purchasing of surgical implants and prosthetic appliances valued at greater than $3,000 to warranted contracting officers in our procurement organization. VHA’s procurement—sorry 

about that. Sorry about that again. VHA’s procurement organization hired and provided specialized training to contracting staff to 

ensure procurements are properly executed consistent with both 

clinical requirements and federal and VA policies and regulations. 

We believe these changes strengthened our procurement performance. 

Throughout the transition our main focus was ensuring orders 

were completed timely and in concert with clinicians’ prescriptions. 

With the transition now complete we continue to monitor timeliness and accuracy and we are now auditing procurement quality 

and increasing our use of negotiated contracts for sourcing implants and prosthetic appliances. As a result of the transition our 

acquisitions above micro purchase limits are now recorded in 

ECMS, our contract managing system, and the federal procurement 

data system. 

Our quality audits of these procurements have led to changes in 

procedures and ordering templates as well. Continuous QA reviews 

will begin in this fiscal quarter to provide detailed oversight of our 

ordering process. These reviews will focus on sourcing practices 

and will be used to improve our utilization of existing national contracts, improve training, and identify further opportunities to place 

biologics and implants on additional contracts. In fiscal year 2014 

we will evaluate establishment of competed additional national 

contracts that will be directly informed by our clinical leadership 

to ensure we are emphasizing clinical quality, patient safety, and 

value. 

VHA is currently updating and finalizing our policy for prosthetics procurement. Once promulgated this new directive will provide comprehensive and clear guidance to VA medical center staff 

on how to order prosthetics. 

We are still reviewing the recently released GAO report on surgical implants. Prior to receiving the GAO report VA had initiated 

a number of reforms to acquisition. Any further opportunities identified by GAO to enhance our acquisition procedures will be considered in our ongoing process. 

The presence of vendors in the operating room is a common practice in healthcare settings. There are broadly accepted professional 

standards pertaining to the presence of vendors in operating rooms 

from the American College of Surgeons and the American Medical 

Association. Physicians use professional judgment to determine 

when the presence of a vendor in the clinical setting improves the 

safety and effectiveness of patient care. Currently VA is working 

however to develop overarching policy regarding the role of vendors. VHA Handbook 1004.02, entitled Improved Consent for Clinical Treatments and Procedures, requires physicians obtain patient 

signature on a consent form before undertaking specific procedures 

such as surgery. This policy requires physicians to discuss the contents of this form with patients. The form also states that under 

certain circumstances the presence of a vendor is important to the 


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success of the procedure; that prior to the procedure the vendor 

will sign an agreement to strictly adhere to the privacy rules; that 

the vendor may provide technical advice but will not physically 

participate in the procedures; and that the vendor will be closely 

monitored by the VA treatment team. 

VHA additionally has a comprehensive recall process that is triggered both by our own facilities as well as external notices such as 

the FDA. This process is overseen by our National Center for Patient Safety, which monitors all recall actions requiring product removal from inventory and coordination with patients. At the facility level all surgical implants are required to be tracked. Further 

for certain implantable devices such as pacemakers vendors are additionally required to ensure medical device tracking to the patient 

level so that individuals may be contacted in the event of a recall 

or a problem with the device they received. 

When a recall is initiated VHA follows a step by step process 

that begins with removing affected products from our inventory 

and that further ensures all mandated actions are closed out to 100 

percent complete. This process then moves to identifying process, 

notifying patients, monitoring patients, and in certain cases performing clinical follow up with patients. When recalls do occur we 

also work with vendors to ensure all VA patients involved have 

been identified. 

Mr. Chairman, we appreciate your support and encouragement 

in identifying and addressing issues regarding the procurement of 

surgical implants at VA medical centers. My colleague Dr. Lynch 

and I are prepared to respond to any questions you may have. 

[THE PREPARED STATEMENT OF PHILIP MATKOVSKY APPEARS IN

THE APPENDIX] 

Mr. COFFMAN. Thank you for your testimony. Dr. Lynch, was 

VHA aware of vendor representatives providing direct patient care 

at VAMCs? 

Dr. LYNCH. We were not aware until the GAO report was issued. 

Mr. COFFMAN. Okay. Mr. Matkovsky, what does VA see as an appropriate role for vendor representatives in the procedure area, be 

it in the OR, wound care clinic, or any other setting? 

Mr. MATKOVSKY. We do not see it as providing direct patient 

treatment. I would indicate that in this one case, after we found 

out from the GAO report, we did refer this case to our Office of Inspector General ourselves. Consultation, support, particularly technical advice regarding new technical implants is permissible. But 

direct patient engagement is not. 

Mr. COFFMAN. Mr. Matkovsky, what percent of biologic contracts 

are made on the federal supply schedule and the open market? 

Mr. MATKOVSKY. We looked at a couple of these, sir. One of them 

looking at the below threshold, so contract actions below $3,000, 

about 70 percent of those actions are on contract, so national contracts, regional contracts. In addition for the biologics, I believe 

there were about $75 million of acquisitions in fiscal year 2013. We 

have not broken out separately those that were on contract, not on 

contract. But I believe in the first quarter of fiscal year 2014, our 

number is roughly about 40 percent on national contract, sir. 


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Mr. COFFMAN. Okay. I would very much like you to provide that 

break down to the committee within two weeks. Thank you. Ranking Member Kirkpatrick. 

Mrs. KIRKPATRICK. Mr. Matkovsky, I appreciate that VA is working on policies regarding vendors in the OR. I think the concern of 

this committee is always what is the consequence of violating a policy of the VA? What is your thought about terminating the contract 

with the vendor whose rep actually touches a patient? 

Mr. MATKOVSKY. Not to be evasive, Congresswoman, but in this 

case we would have to look at it. If they violated the terms of a 

contract, then an appropriate action would be to terminate their 

contract with the VA. But at a minimum they would have performed something in violation of our policy. The difference there 

would be if it is a quality product or a product that we have on 

a committed use contract would we want to terminate a contract 

nationally for the actions of one vendor? But it is something we 

would want to monitor very closely. 

Mrs. KIRKPATRICK. And I just want to reiterate the concern of 

the committee is that a lack of consequences, good policies, but a 

lack of consequence if the policy is breached. But let me go on to 

the second point. The GAO report states that the program executive office identifies items that are frequently used and high cost. 

This implies that that is the only mechanism for identifying items 

to be included in these contracts. Is that in fact the case? 

Mr. MATKOVSKY. That is not the only mechanism, it is one of the 

mechanisms. And I have some numbers from our program executive office. It really took effect in fiscal year 2013. By the end of 

fiscal year 2013, I was directly involved in setting some of the performance goals for that organization and had tied my accountability directly to that success. By the end of the fiscal year, in fiscal year 2013, there were roughly 110, 113 packages developed by 

that group, the total life cycle value of those packages in excess of 

$2.1 billion estimated. What they do is they look at our procurement spend in something we called MEDPDB, the medical product 

database that we share with DoD. And we look at the things we 

buy. And where we do not have items on national contract we identify them as opportunities. That is one mechanism. It is not the 

only mechanism. Another mechanism we use as we transitioned 

away, I just want to emphasize in a period of about 18 months, we 

removed 1,100 contracting officer warrants from prosthetic staff 

and transitioned that to procurement staff. We now have about 378 

prosthetics contracts at a regional and local level that we did not 

have before. Those total in a value annual of $323 million. So that 

is a mechanism that allows us to do bottom up. 

I believe you had made the comment about top down versus bottom up. Where clinician preference is indicated and we can find it 

in buying patterns, we had hoped that this transition would allow 

us to identify those spend patterns as it moves into contracting. 

And then contracting would establish local and regional contracts, 

and then subsequently we would establish national contracts. We 

are evaluating a biologics contract. It is going to be a complex contract but that would be a national committed use contract like we 

have with. 

Mrs. KIRKPATRICK. Could you—oh, excuse me. 


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Mr. COFFMAN. I am sorry, Mr. Matkovsky? Could you please 

speak a little closer into the microphone? Thank you. 

Mr. MATKOVSKY. Okay. Sorry. 

Mrs. KIRKPATRICK. And could you provide the committee with the 

performance goals and metrics for that system? 

Mr. MATKOVSKY. I will. 

Mrs. KIRKPATRICK. Last question is, you know, you heard Dr. Roe 

say that the medical devices are changing at light speed. And what 

is your system for testing new devices and then introducing them 

to the VA system at large? 

Mr. MATKOVSKY. I am going to defer to Dr. Lynch for some of 

this. But part of our evaluation process that we run with the program executive office, frankly the OAL National Acquisition Center 

for a number of years, had helped VHA in some of this work. We 

get product samples from the vendor community. So clinicians who 

are a member of our selection team are literally evaluating products as part of that process. That is different than the federal supply schedule mechanism, which is a much more top down approach. 

Not negating the value of either, but it would be direct testing of 

the product offering on the part of clinicians and then I will defer 

to Dr. Lynch for the research and evaluation of new technologies. 

Dr. LYNCH. Let me just try and comment a little bit about the 

introduction of new technology and the process. I think Congressman Roe and Congressman Benishek discussed that earlier. The 

VA does in fact have a very rigid process of credentialing providers 

and introducing new products into the VA. Physicians are expected 

to undergo specific training. This is actually specified in our 

credentialing process. When they actually begin to do the process, 

if appropriate, they will do it under supervision for a period of time 

before they are credentialed to perform it widely without supervision. So I think we have a process that is very similar to that discussed by Congressman Roe in terms of introducing new procedures and assuring that there is competence on the part of the physician to perform that procedure. 

Mrs. KIRKPATRICK. Thank you, and I yield back, Mr. Chairman. 

Mr. COFFMAN. Thank you, Ranking Member Kirkpatrick. Dr. 

Benishek. 

Dr. BENISHEK. Well that is a great statement there you made, 

Dr. Lynch, about, you know, rigorous rules for credentialing. But 

something is wrong, right? Because I mean, some vendors were 

doing cases. So there is obviously these guys were not credentialed 

to be doing cases in the OR. So there is a failure there somewhere, 

right? 

Dr. LYNCH. Let me—— 

Dr. BENISHEK. You would agree that there has been a failure if 

this actually occurred like has been described? 

Dr. LYNCH. I absolutely agree that a vendor should not be touching a patient. The GAO did not share the specifics of this case with 

us. We have done some background. We think we understand what 

happened and where it happened. It did not happen in the operating room. It happened outside of the operating room. It happened 

during the course of a dressing change. It was not a skin graft, it 

was a skin substitute, one of the cryopreserved skin covers that are 

used for wound care. And it did not involve a physician. We believe 


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it involved a mid-level provider. We have asked our Office of Medical Inspector to go in and evaluate that. Regardless of where it occurred and regardless of the circumstances let me be very clear it 

should not have occurred. But we do not believe that it occurred 

in the operating room at this time. 

Dr. BENISHEK. I see. Okay. Well I do not have, I am not privy 

to the details either. So I mean obviously we need to get that done. 

Dr. LYNCH. But I just wanted to be very clear that this does not 

appear to have been an event that occurred in the OR while a patient was asleep or while a patient was under anesthesia. 

Dr. BENISHEK. All right. Well I guess those facts have yet to 

come out. It is just that I want to touch again on the accountability 

part. You know what I mean? How many people are in your department, Mr. Lynch? I mean, you are the, or Dr. Lynch? You are the 

Assistant Deputy Under Secretary for Health Clinical Operations. 

So either, I mean, how many people do you have working for you? 

Dr. LYNCH. Directly I have about 15. Indirectly because of the 

151 care centers that I oversee, approximately 400 people working 

for us, sir. 

Dr. BENISHEK. You know that to me is, I am trying to get to, I 

mean I think we have identified the fact that there is problems 

here that should not have happened. My issue is that, and you 

have heard me say it if you listened to the previous testimony, I 

have difficulty with the fact that we never seem to identify a person who is responsible for the follow up. And I am going to tout 

my legislation. You know, I have got this VA Accountability Act 

which would actually make the VA identify somebody within the 

VA who is responsible for something that did not occur, for example, to an Inspector General report. Okay? So that there is actual 

accountability by a manager if they did not comply with a, you 

know, an IG report. So do you ever write performance reviews on 

any of these people that work for you? 

Dr. LYNCH. I write the performance reviews for the people who 

report to me directly, yes sir. 

Dr. BENISHEK. So every year then you write, everybody gets a 

performance review written out? 

Dr. LYNCH. My direct reports. Not for everybody across VHA, 

but—— 

Dr. BENISHEK. No, no, but I mean those 15 people that you 

talked about? 

Dr. LYNCH. Yes. Yes. 

Dr. BENISHEK. And those 15 people each have 15 people until you 

get to the 150,000—— 

Dr. LYNCH. Actually 400. I mispoke when I said 100,000 to 

150,000. 

Dr. BENISHEK [continuing]. You are talking about? 

Dr. LYNCH. Correct. 

Dr. BENISHEK. From my position here it is tough to get, you 

know, the bureaucracy initial number provided corrected in this 

document of the size that you are talking about with 150,000 people somewhere below you in the chain of command, to get those individuals’ performance to improve. Because whenever we ask for 

the name of the person who is responsible for fixing this, we do not 

get the name of a person. We get, you know, a vague answer. We 


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can never get down to improving people’s performance within the 

bureaucracy. Do you understand what I am kind of getting to? 

Dr. LYNCH. I understand your frustration. I think though you 

have practiced medicine as I have, and I think you also appreciate 

the complexity of medicine and the interaction between individuals, 

processes, and policies that sometimes make it difficult to separate 

accountability from the person and the process. And I think that 

is the challenge that we face. We need to identify people who need 

to have remediation of some form. We also need to be able to identify where our processes and our policies interfere with our people 

performing good services. 

Dr. BENISHEK. Have you ever written a review that recommended remediation or performance improvement? 

Dr. LYNCH. I have put several individuals on a performance improvement plan, yes sir. 

Dr. BENISHEK. But nobody has ever lost their job, or been transferred in that circumstance of those 15 people? 

Dr. LYNCH. I have not fired anybody or transferred anybody, no 

sir. 

Dr. BENISHEK. And how long have been in the position? 

Dr. LYNCH. I have been in this position for about a year. 

Dr. BENISHEK. Okay. 

Dr. LYNCH. I have worked in the VA for about 35 years, sir. 

Dr. BENISHEK. Well, you know, well I admire your service to our 

veterans. I really have a problem with this and I hope that the remainder of the staff, we got this VA Accountability Act through the 

committee but I was hoping that you all will tell our colleagues on 

the floor to consider voting for this VA Accountability Act so we can 

improve the accountability of people in the VA. I find it very frustrating, Dr. Lynch, about, you know, how the performance is. I 

guess I am way over my time, sorry. 

Mr. COFFMAN. Mrs. Walorski of Indiana. 

Mrs. WALORSKI. Thank you, Mr. Chairman. Mr. Matkovsky, we 

have learned in the testimony from the previous panel and then 

also just here each VA hospital has its own healthcare industry 

representative credentialing program; We know that; and requirements, often creating discrepancies in both the requirements and 

the enforcement from hospital to hospital. And you may have alluded to this in your opening remarks but I could not hear you real 

well, where, could you give us an update on where you are, where 

the VA is in establishing a single standardized credentialing program for use across the system? And I would direct your attention 

to what is being considered right now in my state, the State of Indiana, with the Indiana Hospital Association. It has the potential 

to create more consistent enforcement and compliance. After that 

GAO report, could you just give us an update? Where are you in 

coming up with a centralized program? 

Mr. MATKOVSKY. Sure. I would separate the credentialing and 

privileging question with the vendor policy. 

Mrs. WALORSKI. Mm-hmm. 

Mr. MATKOVSKY. And quite frankly we agree with Mr. 

Williamson and Mr. Butler that a national policy would help here 

and that policy sets the guideline and then from that the local policies would be derived. We have just begun so I cannot give you a 


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specific timeline. But at the direction of the Under Secretary, he 

wants us to look at this and establish some form of national guidance. 

Mrs. WALORSKI. Okay. And then also, as Mr. Lamborn alluded 

to, the VA is a very important customer, partner for the medical 

device industry. Since the implementation of the medical device tax 

a year ago has the VA seen any negative impact in terms of VA 

patient access? Or access to existing or any new technologies? And 

is there a concern going forward about access or new technologies 

as it pertains to the cost of the medical device tax? 

Mr. MATKOVSKY. I do not know that I have the specifics on that 

cost factor. Some of the costs would probably be built into the actual provided price to us. But I do not have those details. I can get 

those and come back. We have not seen any negative effect at this 

point to access to medical devices? 

Mrs. WALORSKI. Could you provide that to the committee? 

Mr. MATKOVSKY. We will. 

Mrs. WALORSKI. Thank you. Thank you, Mr. Chairman. 

Mr. COFFMAN. Mr. Lamborn, Colorado. 

Mr. LAMBORN. Thank you, Mr. Chairman. And this question is 

for either one of you. According to the GAO report that we just 

heard from, and I quote, ‘‘a physician who stated that vendor representatives were present during the application of skin grafts at 

this VA medical center told us that he did not know what the official vendor policy was at the VA medical center, and that he was 

not aware of a VA medical center policy that addresses vendor 

roles.’’ It sounds to me like the oversight by VA is lacking when 

physicians have not been informed and made aware of VA policy. 

What are you doing as an overseer within the VA to make sure this 

never happens again. 

Mr. MATKOVSKY. I think we can do this as a two-part. First of 

all, we went back and looked at all of the medical centers to verify 

that we have policy. We do have policy across the board. In this 

instance this is an individual who, the one that we are looking at, 

there was in fact a policy and it was a violation of local policy. I 

would further, with Congresswoman Walorski’s comment in my response there, that we will be looking at a national policy. Part of 

the benefit of a national policy is that it has certain enforcement 

authority that gets carried with that as well. So the national policy 

will set the frame, local policies will derive from that, training will 

be associated with those policies. I agree wholeheartedly with Mr. 

Butler that that actually is a sound practice. That is what we are 

doing at this point. 

Mr. LAMBORN. And doctor, do you have anything to add to that? 

Dr. LYNCH. I would reinforce what Mr. Matkovsky said. I would 

also emphasize that we have asked our Office of Medical Inspector 

to go in to help us understand why the failure occurred so that we 

can prevent it from happening again. 

Mr. LAMBORN. Thank you. And Mr. Chairman, I yield back. 

Mr. COFFMAN. Thank you, Mr. Lamborn. Dr. Roe, Tennessee. 

Dr. ROE. And Dr. Lynch, thank you for your 35 years of medical 

service to our veterans. I think this is, at least I hope that this situation is just an outlier that occurred. And at least I am beginning 

to think that it is. I was reading, it is very clear in the VA policy 


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where VA hospitals are teaching facilities, which is great, and 

trainees may participate in or observe in treatment/procedures. In 

certain circumstances the presence of a vendor representative or a 

company representative is important to the success of the procedure. That is true. Prior to the procedure the representative will 

sign an agreement to strictly adhere to VA privacy rules. And obviously that policy was not followed in this circumstance that Mr. 

Lamborn talked about. The representative may provide technical 

advice but will not physically participate in the procedure. That is 

very clear. The representative will be closely monitored by the VA 

treatment team. I mean, that is pretty clear policy to me. That is 

not hard to understand. 

Dr. LYNCH. I think VA’s position is very clear. I think the AMA 

and the American College of Surgeons have reinforced that position. And like Congressman Benishek, I have spent many years in 

the operating room. I have never seen a vendor representative 

scrub on a case. I have seen them there for technical information. 

I have seen them there for calibration of the device that is placed. 

I have never witnessed a vendor representative scrub. I think this 

was an outlier. But I think it emphasizes the importance of understanding why it occurred so we can assure it does not happen 

again. 

Dr. ROE. I 100 percent agree with that. And I think your evaluation, Dr. Lynch, is correct. Secondly, the tracking system I think 

is something that is not a major obstacle with today’s technology. 

It should be fairly simple. Could you elaborate on that? Or would 

you elaborate on that? 

Dr. LYNCH. I can tell you what we are doing and what I think 

are several best practices in VA right now. For any implant that 

is placed in the operating room in a VA hospital not only is there 

a sticker placed in the chart, as Congressman Benishek recommended or noted, but that information is also placed in the patient’s electronic medical record by the circulating nurse at the 

time of the procedure. So there is in fact a redundant system. Not 

only do we have information in the prosthetic database but, we 

have information in CPRS, the patient information system. 

Dr. ROE. If you had a, as you know some, a number of years ago 

there was a new ceramic hip that fractured. One of my, he did not 

think it was so funny and neither did his mother. He put it in his 

own mother. I would have never done that. I would not touch my 

mother with a ten-foot pole, but anyway he did. And well she—— 

Dr. LYNCH. Would she be too demanding for you, Congressman? 

Dr. ROE. But anyway, it fractured and he had a way because of 

the tracking system to be able to get this out and replace it. 

Dr. LYNCH. We actually—— 

Dr. ROE. The system, do you have that available now? Is that up 

and running and we just do not know about it? 

Dr. LYNCH. We have a process in place that is run through our 

National Center for Patient Safety. Any recalls that are issued are 

processed by the National Center for Patient Safety. They have 

representatives at the VISN and facility level that they contact 

when there is a recall. Two steps happen depending upon the nature of the recall. The material is removed from the shelf so it cannot be placed in a patient. And if it is, necessary, we identify the 


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patients through the prosthetics database and the operative record 

and notify the patients of the recall and what steps need to be 

taken to follow them with that implant. In most cases, a hip or a 

pace maker, for instance it is usually not removed but the patient 

is followed more closely? 

Dr. ROE. How long does that take? 

Dr. LYNCH. I cannot tell you—— 

Dr. ROE. And are, because I know the VA dropped the ball big 

time on four or five years, I guess it was almost five years ago we 

talked about the colonoscopies and identifying patients, and the VA 

records. There was a huge dropped ball there. Are we sure, do you 

have systems in place to be sure that my lens implant does not, 

that is recalled, that I am notified? 

Dr. LYNCH. I am comfortable that we have good systems, Congressman. I cannot guarantee you that there might not be exceptions. There are always exceptions in healthcare. But I am confident that we have good systems. I also feel that we can improve 

those systems. We can make them better by using some of the technology that we have developed, as the ranking member mentioned, 

in terms of bar coding for medication. We also bar code for transfusions. We need to look at some of the newer technology associated with RTLS and bar coding to see if we can improve the efficiency of that system. But I am confident that in the majority of 

cases we can identify the individual and assure the provider and 

the patient that they have appropriate information regarding the 

recall. 

Dr. ROE. There have been some whopping failures that I have observed since I have been there. One, if you will indulge me just a 

minute, one final question. The procedures and techniques, or new 

devices I should say, that are tested by our VA physicians, are they 

being added to the federal supply schedule or not? Or are they purchased on open market purchases? 

Mr. MATKOVSKY. Two answers to that. They would be more likely 

to go into a national contract or a committed use contract right 

now than an FSS. The FSS is somewhat vendor driven so the vendor will come and get itself on the schedule listing for the most 

part. But we have a team. I mentioned it before. It is broken into 

a number of different domains, a prosthetics domain, a surgery domain, nursing, you name it, and looks at our spend pattern and 

then moves things into committed use contracts through that process. 

Dr. ROE. Okay. Thank you, and I yield back. I thank you for indulging me. 

Mr. COFFMAN. Thank you, Dr. Roe. Mr. Matkovsky, recently VA 

unilaterally deleted biologics from VA’s federal supply schedule 

contracts, then did an immediate about face by putting them back 

on the schedule. Was this related to the lawsuit filed against VA 

on this issue? 

Mr. MATKOVSKY. Mr. Chairman, I do not have information on 

that. If I can take that one for the record? 

Mr. COFFMAN. Very well. Dr. Lynch, vendors performing operations on veterans is not only a serious breach of VA protocol but 

also violates the veteran’s privacy and thereby HIPAA. In accordVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 Y:\86725.TXT PAT

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ance with VA’s table of penalties at a minimum will VA be holding 

anyone accountable for these failures? 

Dr. LYNCH. Mr. Chairman, I cannot comment on that right now. 

It is under investigation. I think we will have a better idea of the 

nature of the accountability once we understand what happened. 

But if appropriate, people will be held accountable. 

Mr. COFFMAN. Mr. Matkovsky, you issued a memorandum on 

May 23, 2012 underscoring VHA policy on the purchase of biologics 

that for the last year and a half has been blatantly disregarded by 

VHA employees. Are you concerned that your guidance is completely ignored without any repercussions? Or was the memo just 

a hollow attempt to say that you did something to address this continued failure to follow the law from our hearing in 2012? 

Mr. MATKOVSKY. No sir, I do not believe it was a hollow attempt. 

I thought we had started at the same time from May 23, 2012 to 

September 30, 2013. We removed all of the warrants from our prosthetics staff to be able to purchase above the $3,000 level. That was 

a significant transition for us. Much of our energy went into making sure we got that right. One of the big concerns we had at the 

time, and when we testified at that hearing, the hearing before 

that, and then the subsequent hearing, my big concern frankly was 

the timeliness effect of that transition. We would be transitioning 

the purchasing of a prosthetic appliance with a vendor waiting on 

the other side of the transaction. So to complete that most of our 

energy went into that. 

Now we are looking at the procurement compliance. Our audits 

are looking at the appropriate determination of the justification for 

other than full and open. If we are using 8123 incorrectly our audits will pick that up now. And we will make sure we are compliant, sir. 

Mr. COFFMAN. Ranking Member Kirkpatrick. 

Mrs. KIRKPATRICK. Dr. Lynch, Mr. Matkovsky. Thank you for 

being here. I appreciate your efforts in crafting a national policy. 

But I just want to remind you that my district in Arizona is a huge 

rural district. It is bigger than the State of Pennsylvania and covers over half the state. And it is unique in that we do have a lot 

of rural veterans. We also have 25 percent of the population Native 

American. And you know, I am always concerned about a one size 

fits all policy. And I would just like to know how you are addressing the unique challenges and needs of our rural veterans and our 

Native American veterans. 

Dr. LYNCH. Let me take a first crack at that. We are a little bit 

off topic because I think once we move into rural areas we are not 

talking about surgical procedures, or probably not even the involvement of vendors. But we are talking about providing services to 

veterans. And I think the VA has taken the lead in telehealth as 

a means for delivering care, what I would term to be point of residence, where the patient is. And I think we have made great 

strides in developing mechanisms by which we can treat and interact with patients remotely and provide rural veterans the same 

quality of service that veterans are getting in our larger facilities. 

It began in primary care. I think we are now able to deliver specialty care services. We have the ability to use stethoscopes and 


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other remote monitoring equipment. So that I think we are being 

concerned about the rural veteran. 

I came from Omaha, Nebraska. Our area covered about 70,000 

to 80,000 square miles of Western Iowa and Nebraska. We faced 

some of the same challenges, and we found the use of telehealth 

very effective in delivering that care. The VA is actually now looking at newer models which will deliver care directly into the patients’ homes by connecting physician and patient across the internet, so that they can interface directly in the home. 

So I think we are concerned about the rural veteran. We are concerned about the veteran that cannot make the trip to our facilities. And I think we do have some tools to provide that care. 

Mrs. KIRKPATRICK. Let me just say I applaud your efforts in my 

district. You know one of my concerns is, though, communication 

between the VA hospitals and those rural veterans and Native 

American veterans. Especially if you have got a device recall. So I 

just hope that you will keep that in the forefront of your minds as 

you go through the development of the policy. 

My other question is really process. The GAO report indicated 

that in 2011 the VHA established a program management office for 

prosthetics to identify additional surgical implants that could be 

made available through a national committed use contract. However an official told the GAO that the office was unable to focus on 

developing national committed use contracts because of staffing 

constraints. So would you explain to the committee how the office 

is supposed to function? Where in the organization structure of VA 

is it located, VHA? Does it have the necessary staffing and financial resources to make a difference and improve the process? And 

do you believe this office is capable of performing the duties you 

have assigned to it? 

Mr. MATKOVSKY. That office is located in VHA’s corporate office 

in what we call patient care services. The national program director is on board. I think that program is running very well. There 

is a really strong collaboration between prosthetics now, logistics, 

and contracting. We attend concurrent meetings every Friday afternoon where we are reviewing the prosthetics order timeliness and 

accuracy. The committed use contracts, I gave a number very 

quickly, but at the below $3,000 threshold, these are the transactions that are micropurchases typically done on a purchase card 

by prosthetics staff, 70 percent of those transactions are against 

contracts, in excess of the dollar value of those contracts. Those 

will increase. 

Mr. Chairman in further response to your comment about the 

memo from 2012, we have seen an increase, although not where we 

would like it to be, in the use of waivers. And we have to do a better job communicating that requirement to the clinical community. 

Also just to make sure people do not think of it as a punitive action 

but as an informative action, to let us know what else we need to 

get on contract. 

I think it is actually a really functioning partnership at this 

point and the leadership team is doing a great job. 

Mrs. KIRKPATRICK. Thank you. Thank you very much. I yield 

back. 

Mr. COFFMAN. Dr. Benishek. 


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Dr. BENISHEK. Thank you, Mr. Chairman. Dr. Lynch, I have just 

a couple more questions about, I know you responded to Dr. Roe’s 

question about the tracking. And you know we were informed 

about this VITAS system, the Veterans Implant Tracking and Alert 

System, apparently, which was in the process of development. I 

mean, can you elaborate on what that was? And what is the mechanism, are you not using that? Or what is the mechanism that you 

are using that you answered Dr. Roe’s question in the affirmative. 

How does that work? 

Dr. LYNCH. First of all, VITAS was an attempt to integrate the 

systems we currently have to track implants. It was developed and 

during initial implementation evaluation was not found to be functioning properly. So at the moment we have pulled VITAS back. 

We are relying on the National Center for Patient Safety (NCPS), 

who tracks recalls. We are relying on their interface with our networks and facilities. We have recall coordinators at each of our facilities who work with the National Center for Patient Safety to receive the recall, assure that any shelf product is immediately removed. The NCPS then works with subject matter experts in VA 

Central Office, who will work with the facility and its databases to 

identify any patients who may have had a particular implant 

placed so that we can inform the patient and the provider and be 

sure appropriate actions are being taken. 

Dr. BENISHEK. Has this actually occurred under your tenure 

there? Have you seen anything that happened that you are aware 

of? 

Dr. LYNCH. It has occurred seamlessly. There have been I think 

about 46 recalls over the past year that have been mediated by the 

National Center for Patient Safety. I cannot itemize those for you. 

Thirteen of those involved biologics. They were all biologics that 

were placed in the OR so we should have record of the implantation. 

Dr. BENISHEK. So then that information goes to each individual 

medical center and then they from their list of patients figure out 

if they have done any of those implants? Is that how it works? 

Dr. LYNCH. What they would do is go back and review the appropriate record to see if any of those were implanted in a patient and 

then link that implant to a patient, yes. 

Dr. BENISHEK. So do you know how, does that take a long time 

then? Or, I mean, is it done on computers? Is that—— 

Dr. LYNCH. The search is done by computers, yes. 

Dr. BENISHEK. All right. 

Mr. MATKOVSKY. And it is also tracked on a web site. So you 

know, an internal system. National Center for Patient Safety will 

issue an alert. It goes to a patient safety officer at the VISN who 

oversees the patient safety officer at the facility. And depending on 

the criticality of the alert notice, there is a requirement to have 100 

percent compliance by a given date. And that date is set by the 

criticality of the alert. 

Dr. LYNCH. And there is a requirement that the medical center 

communicate with the National Center for Patient Safety to indicate that the appropriate action has been taken. 

Dr. BENISHEK. All right. Well I do not know, I just got this answer here in response to your answer. Apparently there was a 


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source saying that the National Center for Patient Safety does not 

track biologics. 

Dr. LYNCH. The National Center for Patient Safety does not specifically track the product, the facility does. The National Center 

for Patient Safety, however, does track the recall notices for biologics and does pass them through to Central Office, the Network, 

and the facility when appropriate. 

Dr. BENISHEK. All right. Well I am just—— 

Dr. LYNCH. In fact there were 13 recalls within I believe the past 

year that did relate to biologics that were managed by the National 

Center for Patient Safety. 

Dr. BENISHEK. All right. Well that is contradictory to somebody 

else’s answer at a previous date, apparently. So—— 

Mr. MATKOVSKY. I think the distinction is that at the National 

Center for Patient Safety they are not keeping the list of the individual patient and the implant of that patient. That is not NCPS’s 

charge. It is their charge to link to the FDR, find an incident from 

a medical center, and then trigger the recall action, set the goal, 

measure compliance. The tracking is done both in CPRS and in the 

prosthetics that will track that. So there are policies that require 

us to record the serial number and associate that with the individual patient. 

Mr. COFFMAN. Right. And I think, and just to interject for a second, I mean, what we have had is testimony and certainly evidence 

in the GAO analysis is that you are not effectively tracking this information and that is a problem for patient safety. Dr. Benishek, 

please proceed. 

Dr. BENISHEK. Actually I am pretty much out of time here, so 

thank you. 

Mr. COFFMAN. Mrs. Walorski, Indiana. 

Mrs. WALORSKI. Thank you, Mr. Chairman. Mr. Matkovsky, I 

just wanted to ask a follow up on the issue of the medical device 

tax. The reason I am asking that question and the reason I am concerned about it, and I have repeatedly asked the question of the 

VA, is because we have had complaints in my district, which is in 

Northern Indiana, of long waits for medical devices, hips, knees. 

Veterans even asking if they can, you know, why the VA cannot 

refer them to private hospitals, refer them to somebody else, get 

them the treatment because of enduring pain. And I posed the 

question to the VA way back in April of last year, of saying, you 

know, what is this impact going to be? Is there going to be an access issue? Which I have never received an answer on. But from 

what I am hearing in my district, in my district there is potentially 

an access issue. 

And the other question I have was on this issue of funding. And 

I reasked the question to the VA back in November on the committee and somebody was here representing the VA and they said 

they would get back to us and they never did. I have never had 

an answer in 60 days. And the reason I am reposing the question 

to you today, especially because you are here testifying on this specific issue that we are talking about, when can you give me, even 

if the VA’s answer is that the dollar value is minimal, all I want 

is the dollar figure the VA assigns to the medical device impact. 

When can I get that dollar figure that you guys are assessing to 


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the medical device impact? Can you tell me? Because my fear is 

that if I walk out of here today and I do not have some kind of an 

agreement with the VA today, I have waited 60 days, even put the 

request in writing, and we still do not have an answer. When can 

you provide me the answer? 

Mr. MATKOVSKY. I would say roughly within 30 days. We do a 

forecast out for the prosthetics spend that we perform. And we are 

getting better at forecasting that amount. It is going to be somewhat challenging. I mean, we will have to look at how much the 

device tax costs and then do some extrapolation on that. But I 

would say give us 30 days and—— 

Mrs. WALORSKI. So I guess my response to that is I have given 

the VA 60 days, and no response both verbally and in writing. Can 

you provide me with that information by the end of the week? By 

tomorrow, 5:00? 

Mr. MATKOVSKY. I want to do a good job and make sure we get 

it done right—— 

Mrs. WALORSKI. But my concern is nobody has answered the 

question. We have done everything here. And the complaints that 

I am receiving from veterans who are waiting for these products 

has to lead me to believe if there is an access problem in my district is there also a dollar value problem with funds available to 

the VA? And is there a economic impact? So my concern is because 

of the fact that veterans are complaining, and the pain that they 

are in in the meantime, and the issue of asking to even go to private hospitals, to go elsewhere, ask me if the VA will reassign 

them? 

Mr. MATKOVSKY. I will personally commit to you that I will make 

sure we get this answer to you. I would say 30 days. We have some 

concurrence processes and other things that I need to go through. 

So I cannot necessarily commit to those timelines. But I will make 

sure we get it done. 

Mrs. WALORSKI. Thank you. Thank you, Mr. Chairman. 

Mr. COFFMAN. Our thanks to the panel. You are now excused. 

Today we have had a chance to hear about many deficiencies 

present in VA’s handling, tracking, and procurement of surgical implants. I am not convinced that VA has taken the appropriate steps 

to correct these problems, especially considering how many of them 

were addressed in similar hearings this subcommittee held nearly 

two years ago. This lack of progress on the part of VA is unacceptable. As such, this hearing was necessary to accomplish a number 

of items. Number one, to discover the extent of VA inappropriately 

allowing vendors to participate in hands on surgical procedures. 

Two, to address the absence of an operational tracking system that 

would VA to determine what implants were administered to veterans in case of an emergency. Three, to identify the reasoning and 

effects of VA’s failure to procure biological implants on the federal 

supply schedule as well as its rampant and incorrect use of waivers. Four, to require VA officials to explain their inadequate response to these serious problems and determine what steps if any 

are being taken to correct them. 

I ask unanimous consent that all members have five legislative 

days to revise and extend their remarks and include extraneous 

material. Without objection, I would like to thank again all of our 


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witnesses and audience members for joining in today’s conversation. With that, this hearing is adjourned. 

[Whereupon, at 12:03 p.m., the subcommittees were adjourned.] 


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APPENDIX 

PREPARED STATEMENT OF MIKE COFFMAN, CHAIRMAN

OVERSIGHT AND INVESTIGATIONS

REMARKS—VENDORS IN THE OR—VA’S FAILED OVERSIGHT OF SURGICAL IMPLANTS

JANUARY 15, 2014 

Good morning. This hearing will come to order. 

I want to welcome everyone to today’s hearing titled, ‘‘Vendors in 

the OR—VA’s Failed Oversight of Surgical Implants.’’ 

This hearing examines serious problems with the tracking and 

handling of surgical implants within the VA and follows through 

on procurement issues revealed in a previous hearing by this subcommittee. 

According to multiple sources, VA medical centers have allowed 

surgical implant vendors to participate in hands-on treatment administered to veterans. Based on my staff’s initial findings, I asked 

GAO to investigate these allegations regarding veteran health care 

and to determine what policies are currently in place. 

GAO substantiated that several veterans had received skin 

grafts that had been applied directly by skin graft vendors. GAO 

found that VHA requires each medical facility to develop its own 

policy on vendor access, resulting in varying degrees of specificity 

regarding their participation in patient care. 

These findings raise serious questions about the extent of vendor 

involvement in patient care at VA facilities and the lack of clear 

guidance regarding vendor access. VA’s own consent form as well 

as industry best practices state that vendor representatives may be 

present to provide technical advice but may not physically participate in the procedure. However, GAO’s investigation confirms that 

these policies are being unevenly applied or unenforced. Clearly, 

national guidance and oversight is necessary to protect veterans 

who undergo surgical implant procedures. 

There are also significant problems with how VA handles and 

tracks surgical implants in veterans. Previous VA OIG audits criticized the VHA for weak internal controls that jeopardize VA’s ability to identify and notify patients in the event of FDA product recall. According to GAO’s report, released on Monday, these concerns remain and have not been remedied. For some clinical specialties, including gastroenterology, interventional radiology, and 

pulmonary, identifying information on implants was not tracked in 

any system. It is troubling to consider that for these specialties, 

VHA was unable to verify that the items purchased were actually 

implanted in the patients for whom they were intended. 

In 2008, VA began developing the Veterans Implant Tracking 

and Alert System (VITAS) to track and retrieve identifying information—including the lot and serial number—of surgical implants 

placed in patients VHA-wide. Unfortunately, according to GAO, 

this system’s development was suspended at the end of fiscal year 

2012 due to data-reliability challenges, and as of December 2013, 

development of VITAS has not resumed, limiting VHA’s ability to 

identify and locate patients who have received implants. 


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Additionally, GAO’s report shows that VA has failed to make sufficient progress with prosthetic procurement reform. In a May 30, 

2012 hearing, this subcommittee revealed that VA medical centers 

and VHA regional network contracting officers misused waiver authority to spend nearly 3 billion dollars on open market purchases 

of prosthetics, including surgical implants, rather than procure 

them through competitive contracts, including those with businesses on the Federal Supply Schedule. 

As a result of the hearing, VA acknowledged that there are often 

several options available for implants and that disadvantaged veteran owned small businesses and others offering these products 

were being unfairly excluded from consideration. VA indicated that 

it would implement reforms so that non-competitive and sole source 

purchases would require justification on a case by case basis. 

GAO’s report does contain some good news: VA has made some 

progress with obtaining national committed use contracts for nonbiological implants, such as artificial joints, cardiac pacemakers, 

heart valves, and coronary stents. Use of these national committed 

use contracts is the most favored method of procurement for implants under the Federal Acquisition Regulations. However, GAO 

also reported that no such contracts have been negotiated for biological implants such as skin and bone grafts. Moreover, contrary 

to a memorandum, dated May 23, 2012, from Assistant Deputy 

Under Secretary Matkovsky, GAO found biological implants were 

rarely ordered from the Federal Supply Schedule at each VA medical center it visited. According to GAO, over-use of the waiver 

process continues. It reported that none of the medical centers it 

visited procure surgical implants in compliance with waiver requirements for open market purchases. Finally, it is most disappointing to note that while VA and VHA now have procurement 

oversight components, GAO reported that they have failed to impose corrective action for these deficiencies. 

In conclusion, VA must continue to implement reforms so that 

medical centers procure surgical implants that meet patient needs 

while also ensuring best value. More importantly, VA and VHA 

must pay much better attention to patient safety concerns regarding surgical implants. It is way past time for VA to develop national policies that set forth the parameters for vendor access to 

treatment facilities and that implement sufficient oversight controls. Additionally, proper tracking of surgical implants is a problem that has been unresolved for far too long and it must be remedied post haste. 


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PREPARED STATEMENT OF ANN KIRKPATRICK, RANKING MINORITY MEMBER

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS HEARING 

VENDORS IN THE OR—VA’S FAILED OVERSIGHT OF SURGICAL IMPLANTS

JANUARY 15, 2014 

Statement of Rep. Ann Kirkpatrick, Ranking Member, Subcommittee on Oversight and Investigations 

Thank you Mr. Chairman. 

This morning, the Subcommittee on Oversight and Investigations 

will be looking into VA practices regarding purchasing surgical implants. In addition, the Subcommittee will be looking into allegations that surgical implant vendor representatives had participated 

in direct patient care. 

On Monday, the Government Accountability Office (GAO) released a report entitled VA Surgical Implants: Purchase Requirements Were Not Always Followed at Selected Medical Centers and 

Oversight Needs Improvement. 

The GAO looked at four VA medical Centers and found that 

these hospitals did not always follow VHA policy regarding documenting open market purchases of surgical implants, including obtaining the necessary waivers to purchase items not covered by a 

VA-negotiated contract. Last year, VA instituted a new policy regarding purchases above the Federal Acquisitions Regulation’s 

(FAR) micro-purchase threshold of $3,000 and below the simplified 

acquisition threshold of $150,000. Medical facility and regional office officials ‘‘attributed noncompliance mainly to insufficient VHA 

guidance and VA staff’s inexperience’’ in completing the new requirements. 

This is a familiar litany to members serving on this subcommittee. It has been noted before that it does not matter how 

good and thorough the policy and standards are if no one follows 

them and there are seemingly no consequences for noncompliance. 

And this is what I would like to explore today in addition to looking at the specific allegations and looking at ways to improve the 

process. 

Surgical implants, and the larger issue of medical procurement, 

provides us with a classic balancing act of patient and provider 

choice on one hand, and efficiency and savings on the other. These 

are not, in my view, mutually exclusive concepts, but also, there 

are, ultimately, very few easy answers. 

Should there be a greater level of centralization on procurement 

matters, or should we provide greater local autonomy while ensuring that policies are followed? Indeed, how do we ensure that VA 

employees are provided the tools to do their jobs and help our veterans but are also held accountable if they do not comply with established policies. 

On the issue of surgical implants, what policies and structures 

are in place to ensure that VA staff is kept fully-up-to-date on advances in the field of surgical implants, and the availability of difVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00044 Fmt 6621 Sfmt 6602 Y:\86725.TXT PAT

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ferent options, while also ensuring that VA’s contracting efforts are 

directed toward items that are clinically advantageous and necessary for patient care. Are decisions regarding which items to include in a VA-negotiated committed-use contract made from the top 

down, or the bottom up, and more importantly, are these decisions 

made rigorously and systematically? How effective is the recently 

instituted program executive office and does this effort have the 

staffing level and financial resources to make a difference and improve the process? 

GAO reported that VHA spent approximately $563 million on 

surgical implants in fiscal year 2012, an increase of 28 percent over 

fiscal year 2008 levels. I would like to hear from our witnesses 

today regarding the factors that led to this increase. It is not clear 

to me whether the increase is primarily due to the practice of open 

market purchases, or to an increase in either the costs of surgical 

implants or an increase in their use. 

Patient safety is our number one concern. That is why I am concerned over allegations that surgical implant vendor representatives participated in direct patient care. I want to ensure that VA 

policies are fully followed in this regard while also recognizing that 

at times vendor representatives can have an important role in providing technical assistance and education to VA care providers. 

So let us begin the conversation on how best to fix the problems 

before us today and work to improve the VA health care system 

and the health care it provides to our veterans. Spending taxpayer 

dollars wisely is essential, but providing the health care that veterans have earned and deserve is critical. 

I look forward to hearing from our witnesses today, and I yield 

back the balance of my time. 


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PREPARED STATEMENT OF PHILIP MATKOVSKY

Mr. Chairman, Ranking Member Kirkpatrick, and members of 

the Committee, thank you for the opportunity to appear before you 

this morning to discuss the Department of Veterans Affairs’ (VA) 

practices regarding the use, tracking, and procurement of surgical 

implants at VA medical centers. 

The Veterans Health Administration (VHA) has made significant 

changes in the last 3 years to the way it procures surgical implants 

and prosthetics appliances for the benefit of Veterans. These 

changes are intended to improve procurement performance and accountability while ensuring effective health care delivery for our 

Veterans. Beginning in Fiscal Year (FY) 2012 and concluding at 

the end of FY 2013, VHA transitioned the purchase of surgical implants and prosthetics appliances valued at greater than $3,000 to 

warranted contracting officers in the VHA procurement organization. This change strengthened our procurement performance for 

the acquisitions above the micro purchase level. Over 1,100 warrants have been pulled back from non-contracting officer prosthetics staff. VHA’s procurement organization has hired and provided specialized training to contracting staff to ensure prosthetics 

procurements are properly executed, both systematically and in accordance with Federal and VA policies and regulations. 

Throughout this transition period, VHA’s procurement team’s 

main focus was ensuring that orders were completed timely and in 

concert with clinicians’ prescriptions. With the transition now complete, VHA continues to closely monitor ordering timeliness and accuracy while auditing procurement quality and increasing its use 

of negotiated contracts for sourcing surgical implants and prosthetic appliances. As a result of this transition, our acquisitions 

above micro-purchase limits are now recorded in our electronic contract management system and the Federal Procurement Data System. 

These audits for compliance and procurement quality have led to 

changes in VHA procedures and ordering templates use in our electronic contract management system. Further improvements to our 

ordering processes will occur in the near term. Quality assurance 

reviews will begin in this fiscal quarter to provide continuous management oversight into ordering processes. These quality reviews 

will focus on the sourcing practices and will be used to improve our 

utilization of existing national contracts and our ability to place 

biologics and implants on national contracts. These efforts to establish national contracts will be directly informed by our clinical leadership to ensure we are emphasizing quality and value. 

VHA is currently updating and finalizing its policy for prosthetics procurement. Once published, this new directive will provide more comprehensive and clear guidance to VA medical center 

staff on how to appropriately order prosthetic appliances to include 

surgical implants and biologics. VA is still reviewing the recently 

released Government Accountability Office (GAO) report titled, ‘‘VA 

Surgical Implants: Purchase Requirements Were Not Always Followed at Selected Medical Centers and Oversight Needs Improvement.’’ Prior to receiving the GAO report, VA had initiated a number of reforms to its acquisitions process. Any further opportunities 


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identified by GAO to enhance our prosthetics acquisition procedures will be considered in our ongoing efforts. 

The presence of vendors in the operating room is a common practice in health care. There are broadly accepted professional ethics 

standards pertaining to the presence of vendors in operating rooms 

from the American College of Surgeons and the American Medical 

Association. Physicians use their professional judgment to determine when the presence of vendors in clinical settings will improve 

the safety and effectiveness of patient care. VHA Handbook 

1004.01, entitled Informed Consent for Clinical Treatments and 

Procedures, requires that physicians obtain the patient’s signature 

on VA Form 10–431 before undertaking specific procedures such as 

surgery. The policy also requires that physicians discuss the contents of this form with patients. The form states that under certain 

circumstances the presence of a vendor representative is important 

to the success of the procedure, that prior to the procedure the representative will sign an agreement to strictly adhere to VA’s privacy rules, that the representative may provide technical advice 

but will not physically participate in the procedure, and that the 

representative will be closely monitored by the VA treatment team. 

38 CFR 1.220. also provides additional guidance related to vendors 

in clinical settings. 

In VA, the consent form that is used for all treatments and procedures (VA Form 10–0431a) that patients (or their surrogate) 

must sign prior to undergoing operative procedures, contains the 

following language: 

‘‘VA hospitals are teaching facilities, and trainees may participate in or observe this treatment/procedure. In certain circumstances, the presence of a vendor representative (company representative) is important to the success of the procedure. Prior to 

the procedure, the representative will sign an agreement to strictly 

adhere to VA’s privacy rules. The representative may provide technical advice but will not physically participate in the procedure. 

The representative will be closely monitored by the VA treatment 

team.’’ 

Conclusion 

Mr. Chairman, we appreciate your support and encouragement 

in identifying and addressing issues regarding the procurement of 

surgical implants at VA medical centers. My colleague and I are 

prepared to respond to any questions you may have. 

f 

QUESTIONS FOR THE RECORD

QUESTIONS FROM SUBCOMMITTEE CHAIRMAN MIKE COFFMAN 

Question: 1 Please provide a detailed statement with citations 

to all guidance, including but not limited to directives, handbooks, 

and/or regulations, regarding VA and/or VHA policies on access by 

surgical implant vendor representatives to clinical settings where 

implantation occurs? Please also describe any changes that are 

planned in this regard. 

Question: 2 Please provide a detailed statement with citations 

to all guidance, including but not limited to directives, handbooks, 


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and/or regulations, regarding VA and/or VHA policies related to 

credentials and other qualifications necessary for surgical implant 

vendor representative participation in implant procedures. Please 

also describe any changes that are planned. 

Question: 3 Please describe in detail the oversight and enforcement processes that are in place or are planned regarding the 

agreed conditions of informed consent notices signed by patient/veterans, including those with respect to vendor presence. 

Question: 4 In Mr. Matkovsky’s written testimony, he refers to 

38 CFR § 1.220, as guidance for vendors in clinical settings but on 

its face, this regulation applies to pharmaceuticals. Does VA and/ 

or VHA interpret the regulation to include surgical implants? If so, 

please explain. If not, then please indicate whether VA and/or VHA 

plan to promulgate a similar regulation for surgical implants. 

Question: 5 Please describe in detail the steps VA and/or VHA 

plan to take to include biological implants on Federal Supply 

Schedule contracts and/or national committed use contracts. 

Question: 6 Please describe in detail the circumstances under 

which VA unilaterally deleted biologics from VA’s Federal Supply 

Schedule contracts and then did an immediate about face to put 

them back on schedule. 

Question: 7 In a memorandum dated May 23, 2012, Mr. 

Matkovsky indicated that biological implants should be purchased 

on the Federal Supply Schedule. Please indicate whether this directive has been followed and provide the specific number of such purchases. 

Question: 8 The GAO report states that VHA has a number of 

policy documents and trainings under development that are designed to improve compliance with the new purchasing process for 

surgical implants over $3,000. Please give us an overview of what 

these documents and trainings will entail and when you expect 

them to be in place. Also, please describe what steps VHA is taking 

to monitor the timeliness of orders and to make the process more 

efficient. 

Question: 9 Given that VA and/or VHA is making open market 

purchases and not properly documenting them, how does VA ensure that it is not violating the Competition in Contracting Act? 

How will VA ensure compliance and hold employees accountable for 

adherence to federal acquisition regulations related to future open 

market purchases? 

Question: 10 GAO found that VA and/or VHA have oversight 

mechanisms in place regarding procurement of surgical implant 

purchases but that corrective action to prevent recurrence of poorly 

documented open market purchases is not pursued. What plans 

does VA and/or VHA have for improvement in this regard? 

Question: 11 Please describe the status of the Veterans Implant 

Tracking and Alert System (VITAS) and VA and/or VHA plans and 

timetables to implement the system. Also, please describe how VA 

and/or VHA expect to overcome the data reliability problems that 

in 2012 prevented VITAS from succeeding? 

Question: 12 Please describe the controls that VA and/or VHA 

have in place or plan to implement to prevent implantation of expired or contaminated surgical implants and enable the identification of patients with such implants for recall purposes. 


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QUESTIONS AND RESPONSES FOR THE RECORD

QUESTIONS FROM SUBCOMMITTEE CHAIRMAN MIKE COFFMAN AND 

RESPONSES FROM VA 

Question: 1 Please provide a detailed statement with citations 

to all guidance, including but not limited to directives, handbooks 

and/or regulations, regarding VA and/or VHA policies on access by 

surgical implant vendor representatives to clinical settings where 

implantation occurs? Please also describe any changes that are 

planned in this regard. 

VA Response: VHA Handbook 1004.01, Informed Consent for 

Clinical Treatment and Procedures (available at http:// 

www.ethics.va.gov/ETHICS/docs/policy/VHA—Handbook—1004– 

01—Informed—Consent—Policy—20090814.pdf), requires the use 

of the informed consent process and the use of the iMedConsentTM 

software program (or VA Form 10–431a, Consent for Clinical 

Treatment or Procedures when iMedConsentTM cannot be used) 

for procedures performed in and out of the operating room (OR) by 

any provider. Notably, VA’s informed consent form specifically informs the patient that vendor representatives may provide technical advice but will not physically participate in the procedures. 

However, the informed consent process does not address vendors 

who are present in non-procedure areas. National level policy regarding vendors is in development. 

VA has issued informal guidance to VA health care facilities in 

the form of two Privacy Fact Sheets titled, ‘‘Vendor Representatives 

in Surgical Setting’’ (dated December 2003) and ‘‘Disclosing the 

Minimum Amount of Protected Health Information (PHI) to Vendors Assisting with Implantable Devices or Observing Surgery’’ 

(dated September 2007). Both Fact Sheets address access to PHI by 

surgical implant vendor representatives in clinical settings. These 

Privacy Fact Sheets are meant to provide VA health care facility 

Privacy Officers with information on the legal requirements under 

the Privacy Act and Health Insurance Portability and Accountability Act (HIPAA) for disclosing or sharing PHI with surgical implant vendor representatives. 

Question 2: Please provide a detailed statement with citations 

to all guidance, including but not limited to directives, handbooks, 

and/or regulations, regarding VA and/or VHA policies related to 

credentials and other qualifications necessary for surgical implant 

vendor representative participation in implant procedures. Please 

also describe any changes that are planned. 

VA Response: There are no national level VA or VHA policies 

related to credentials and other qualifications necessary for surgical implant vendor representative participation in implant procedures. Consistent with professional ethics standards and guidelines 

promulgated by professional medical societies, the policy currently 

in development will clarify that vendor representatives in VA are 

not allowed to engage in the practice of surgery or medical decision 

making or to be involved in direct patient contact during procedures; and that the role of vendor representatives is only to provide 

technical advice and/or to be involved in the remote calibration or 

adjustment of medical devices to the surgeons and manufacturers’ 

specifications. The policy will further clarify requirements that venVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00066 Fmt 6621 Sfmt 6602 Y:\86725.TXT PAT

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dors must meet before they are allowed to be present in clinical 

settings. 

It is anticipated that the policy should be completed in early 

2015. In the interim, VA’s iMedConsentTM form states that vendor 

representatives may provide technical advice, but they will not 

physically participate in the procedures. 

Question 3: Please describe in detail the oversight and enforcement processes that are in place or are planned regarding the 

agreed conditions of informed consent notices signed by patient/veterans, including those with respect to vendor presence. 

VA Response: VHA Handbook 1004.01 constitutes VHA national policy on informed consent. It mandates the use of the 

iMedConsentTM software program or VA Form 10–431a to document the informed consent process. This policy applies to procedures performed both inside and outside of the OR by a provider. 

The oversight responsibility is assigned to the facility. 

Question 4: In Mr. Matkovsky’s written testimony, he refers to 

38 CFR § 1.220, as guidance for vendors in clinical settings but on 

its face, this regulation applies to pharmaceuticals. Does VA and/ 

or VHA interpret the regulation to include surgical implants? If so, 

please explain. If not, then please indicate whether VA and/or VHA 

plan to promulgate a similar regulation for surgical implants. 

VA Response: 38 Code of Federal Regulations (CFR) § 1.220 

provides guidance regarding pharmaceutical representatives. VA 

has not interpreted the regulation to apply to vendor representatives for surgical implants. As for changes that are planned with 

regard to policy concerning surgical implant vendor access, please 

refer to VA’s response to question #1 and #2 above. 

Question 5: Please describe in detail the steps VA and/or VHA 

plan to take to include biological implants on Federal Supply 

Schedule contracts and/or national committed use contracts. 

VA Response: In the fall of 2012, the Office of Acquisition, Logistics, and Construction’s National Acquisition Center (NAC) attempted to increase the number of biologic sources under Federal 

Supply Schedule (FSS) Group 65 Part II Section A (FSS 65IIA) 

Medical Equipment and Supplies. During this process, a review of 

the FSS Agency Specific clause AS1904, Regulatory Requirement 

Provisions (August 2000), which includes CFR Part 800–1200 revealed that human cells, tissues and cellular, and tissue-based 

products (i.e., allografts) which as classified under 21 CFR 1271 

were believed to be a controlled-substance in lieu of a medical device. As such, it was then determined allografts should be removed 

from all FSS contracts awarded under 65IIA. During the week of 

May 31, 2013, VA Contracting Officers notified all affected FSS 

65IIA contractors, via a bilaterally-generated modification, that all 

allografts line items would be effectively removed from their respective contracts by June 15, 2013. All FSS contractors were given 

until June 6, 2013, to sign, date, and return the bilateral modification. FSS contractors who did not comply by June 6, 2013, received 

a unilaterally-executed modification removing allograft products 

with an effective date of June 15, 2013. 

After additional fact finding and consultation with VHA and the 

Office of General Counsel, VA determined that the NAC misinterVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00067 Fmt 6621 Sfmt 6602 Y:\86725.TXT PAT

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preted the language of AS1904 as it pertained to allografts. As a 

result, effective June 21, 2013, the Deputy Assistant Secretary for 

Acquisition and Logistics directed the NAC to rescind its decision 

to remove allografts from VA’s FSS and restore all products previously offered by the schedule holders. 

Question 6: Please describe in detail the steps VA and/or VHA 

plan to take to include biological implants on Federal Supply 

Schedule contracts and then did an immediate about face to put 

them back on schedule. 

VA Response: VHA performed the following steps to include biological implants on national committed use contracts: 

1) Convened a VHA-led panel of experts on February 27, 2014, 

to support establishing appropriate national committed use contracts for biological implants by; and 

2) Developed and submitted complete requirements documentation to the VA Strategic Acquisition Center (SAC) by the end of fiscal year (FY) 2014 to support their follow through for award of national committed use biological implant contracts. 

Question 7: In a memorandum dated May 23, 2012, Mr. 

Matkovsky indicated that biological implants should be purchased 

on the Federal Supply Schedule. Please indicate whether this directive has been followed and provide the specific number of purchases. 

VA Response: The memorandum communicated requirements to 

both procurement and non-procurement staff to adhere to sourcing 

and waiver processes. The memorandum was not, however, a directive. Following the release of the memorandum, VHA undertook 

the full transition of procurements above the micro-purchase 

threshold (of $3,000) as indicated below: 

Waivers 

The data below identify the number of waivers from FSS orders 

processed through local contracts: 

FY 2012: 10 Waivers approved 

FY 2013: 21 Waivers approved 

Through the first quarter of FY 2014, there are eight waivers approved or under review. Waiver requests are typically for multiple 

items on a local contract. VHA is identifying improvements to further improve the level of adherence to waiver processes. As VHA 

has transitioned procurements above the micro-purchase threshold 

from prosthetics staff to procurement staff, it will be more feasible 

to improve adherence with internal VA policies. 

Purchases From FSS Biologics Vendors 

It is difficult to track specific biologics vendors due to limitations 

in VA FSS tracking systems. The data below identify general 

trends for purchases from FSS vendors. 

FY 2013: Total: $23.2 Million 

Top 5 Federal Supply Schedule Vendors: 

Avkare .............................................................................................................................................. $14.7 Million 

Shire Regenerative .......................................................................................................................... $4.5 Million 

Academy Medical ............................................................................................................................ $2.4 Million 

Advanced Biohealing ....................................................................................................................... $1.3 Million 

Cotton Medical Group ..................................................................................................................... $309,000 


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Transition of Warrants: Beginning in FY 2012 and concluding at 

the end of FY 2014, VHA removed procurement authority above 

the micro-purchase from over 1,000 for facility prosthetics staff. 

These duties were transitioned to approximately 200 warranted 

Contracting Officers. 

Question 8: The GAO report states that VHA has a number of 

policy documents and trainings under development that are designed to improve compliance with the new purchasing process for 

surgical implants over $3,000. Please give us an overview of what 

these documents and trainings will entail and when you expect 

them to be in place. Also, please describe what steps VHA is taking 

to monitor the timeliness of orders and to make the process more 

efficient. 

VA Response: The VHA Procurement Policy Office has drafted 

VHA Directive 1081, Procurement Process for Individual Prosthetic 

Appliances, which establishes procedures for procuring prosthetic 

appliances and sensory aids including surgical implants over the 

$3,000 micro-purchase threshold. This directive is undergoing VA’s 

coordination, concurrence, and approval process and has obtained 

almost all required concurrences. The directive defines and standardizes the processes and policies that VHA Acquisition workforce 

will follow when procuring the specified items. The directive also 

defines the circumstances under which Veteran Affairs Acquisition 

Regulation (VAAR) and Federal Acquisition Regulation (FAR) may 

be cited and other than full and open competition procedures utilized. Once approved and published, the directive will define the 

roles and responsibilities of the acquisition team members and 

streamline the procurement process to make it more efficient. 

1. Issuing Consignment Agreements: A standard operating procedure (SOP) is being developed that provides guidance to the acquisition workforce for procuring implantable devices on a consignment basis so that the medical centers will have instant availability to the different type or model. 

2. Monitoring Timeliness of Orders: VHA has developed a dashboard that tracks the timeliness of prosthetic orders by the Network Contracting Office. The tool tracks four events in the procurement process so when delays happen, the cause can be readily 

identified. These events include the following: 

• Consult to electronic Contract Management System (eCMS) Planning Module—This captures the date of the patient consult and the date a Network Contracting Office receives a procurement request. 

• eCMS Planning Module to Graphical User Interface Purchase Order (GUI 

PO)—This captures the date of receipt of a procurement request by the Network 

Contracting Office and the date funds are committed to support the contract 

award. 

• GUI PO to eCMS Award—This tracks the date that funds are committed and 

the date the purchase order is awarded by the Contracting Officer. 

• Consult to eCMS Award—This tracks the overall time frame from the patient 

consult to the date the purchase orders are awarded by the Contracting Officer. 

The Network Contracting Office dashboard shows the average 

amount of days for each of the above events. The dashboard is robust and allows us to drill down by the types of products purchased 

to identify what may be causing overall timeframes to be less than 

optimal. Network Contracting Offices and Network Prosthetics Departments each own part of the process, and there are conference 

calls each week to discuss performance and timeliness. Good perVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00069 Fmt 6621 Sfmt 6604 Y:\86725.TXT PAT

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formers will share best practices, and performance outliers are required to describe the actions they are taking to reduce timelines. 

VHA is successfully using this dashboard to not only monitor timeliness but also work with Network Prosthetics Representatives and 

Network Contracting Officers to improve performance. 

Question 9: Given that VA and/or VHA is making open market 

purchases and not properly documenting them, how does VA ensure that it is not violating the Competition in Contracting Act? 

How will VA ensure compliance and hold employees accountable for 

adherence to federal acquisition regulations related to future open 

market purchases? 

VA Response: VA takes several steps to ensure it is not violating the Competition in Contracting Act. VHA clinicians determine which surgical implants will best meet the clinical needs of 

individual patients. This is not a decision made by Contracting Officers. Many times, the manufacturer and size of a particular implant is not known until the surgery is being performed, and the 

surgeon observes the internal physical characteristics of the patient. Title 38 United States Code § 8123, Procurement of Prosthetic Appliances, states, ‘‘The Secretary may procure prosthetic 

appliances and necessary services required in the fitting, supplying, and training and use of prosthetic appliances by purchase, 

manufacture, contract, or in such other manner as the Secretary 

may determine to be proper, without regard to any other provision 

of law.’’ VHA has provided justification templates to our acquisition 

workforce and has an audit program to ensure contract files have 

proper documentation. When a specific product is not identified in 

the physician’s consult, competition is used by Procurement/Contracting Officers. Effective October 1, 2013, VHA transitioned purchasing authority for items greater than $3,000 to Contracting Officers. This threshold is significant because it denotes the micro-purchase limit. For these transactions, VHA performs quality assurance reviews to assess compliance of our procurement staff. 

Question 10: GAO found that VA and/or VHA have oversight 

mechanisms in place regarding procurement of surgical implant 

purchases but that corrective action to prevent recurrence of poorly 

documented open market purchases is not pursued. What plans do 

VA and/or VHA have for improvement in this regard? 

VA Response: VHA has provided justification and approval templates to our acquisition workforce and has an audit program to ensure contract files have proper documentation. The transition of the 

procurement workload for open-market surgical implant purchases 

from VA medical center prosthetics departments to Network Contracting Offices was completed on October 1, 2013. Although it is 

still early in the transition, expectations are the existing guidance 

and oversight program will produce improvements in the documentation of open-market surgical implant purchases. The oversight program includes a corrective action plan/improvement plan 

requirement. 

Question 11: Please describe the status of the Veterans Implant 

Tracking and Alert System (VITAS) and VA and/or VHA plans and 

timetables to implement the system. Also, please describe how VA 

and/or VHA expect to overcome the data reliability problems that 

in 2012 prevented VITAS from succeeding. 


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VA Response: VITAS is designed to track implants (e.g., coronary stents, dental, aortic valves, etc.) to include both non-biologic 

and biologic implants. Biologics that are not ‘‘implanted’’ such as 

wound care products will not be tracked by this software solution. 

VITAS, as designed, will draw on a number of registries for source 

implant device data including, but not limited to, the VistA Dental 

Package, Cardiovascular Assessment, Reporting and Tracking 

(CART) System, and VistA Surgery Package. VITAS software, as 

developed, was undergoing Initial Operating Capability (IOC) testing when the developer contract concluded prior to VITAS release 

and implementation. If funded for completion, two challenges identified in IOC will require resolution. The first challenge identifies 

the National Prosthetics Patient Database (NPPD) as an unreliable 

resource for implant tracking purpose. The proposed solution is to 

replace the NPPD with the VistA Surgery Package as source data 

for surgical implants placed in the operating room. The second 

challenge relates to locating the patient for notification in the event 

of a product recall. VITAS, as designed, queried the VA Primary 

Care Management Module (PCMM) to provide a primary care physician as the sole point of contact for recall notification. This was 

identified in IOC testing as a potential risk to timeliness of notification since PCMM is currently not a comprehensive data source 

for Veterans receiving care and treatment in VA. The solution is 

for VITAS to provide notification to additional providers (e.g., surgeon, cardiologist, and dentist) and VHA administrators (e.g., facility Chief of Staff) for patient notification in the event of a product 

recall consistent with current VHA policy. 

Question 12: Please describe the controls that VA and/or VHA 

have in place or plan to implement to prevent implantation of expired or contaminated surgical implants and enable the identification of patients with such implants for recall purposes. 

VA Response: VHA Directive 1039, Ensuring Correct Surgery 

and Invasive Procedures, mandates that ‘‘time-outs’’ must be facilitated by a checklist and occur immediately prior to the start of a 

procedure including verification that the correct implant is available, if applicable. An additional step is required immediately prior 

to implantation of the medical device. The privileged provider performing the procedure must confirm the correct implant with a 

team member, including a ‘‘read-back’’ of the relevant information. 

Documentation of the correct medical implant must be placed in 

the patient’s electronic health record. 

If a potentially contaminated surgical implant is recalled by the 

manufacturer or the Food and Drug Administration, VA’s National 

Center for Patient Safety (NCPS) Product Recall Office posts a recall notice with a timeline for removal actions to affected VA facilities through the VHA Alerts and Recalls intranet database. 

Facility Recall Coordinator (FRC) in each facility receive the recall notices from the Product Recall Office and work daily to remove defective medical products and food through assignments 

made to the Facility Designated Area Specialists within each medical center. Through this process, established by VHA Directive 

2008.080, Recall of Defective Medical Devices and Medical Products, Including Food and Food Products, VA facilities remove poVerDate Aug 31 2005 11:33 Feb 27, 2015 Jkt 000000 PO 00000 Frm 00071 Fmt 6621 Sfmt 6604 Y:\86725.TXT PAT

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tentially harmful products from inventory in a timely and effective 

manner. 

NCPS’ Product Recall Office receives feedback confirmation from 

each FRC that the facility did or did not have the affected product 

in stock at the time of the recall and removed any recalled product 

from inventory. This prevents potentially contaminated surgical 

implants from being used. The Product Recall Office monitors compliance to the recall process for each facility. 

f 

January 24, 2014 

The Honorable Eric K. Shinseki 

Secretary, U.S. Department of Veterans Affairs 

810 Vermont Avenue, NW, Washington, DC 20420, 

Dear Mr. Secretary: 

Please provide written responses to the attached questions for 

record for the Oversight and Investigations Subcommittee hearing 

entitled ‘‘Vendors in the OR—VA’s Failed Oversight of Surgical Implants’’ that took place on January 15, 2014. 

In responding to these questions for the record, please answer 

each question in order using single space formatting. Please also 

restate each question in its entirety before each answer. Your submission is expected by the close of business on February 25, 2014, 

and should be sent to Ms. Bernadine Dotson at 

Bcrnadine.dotson@mail.house.gov. 

If you have any questions, please call Mr. Eric Hannel, Majority 

Staff Director of the Oversight & Investigations Subcommittee, at 

202–225–3527. 

Sincerely, 

Mike Coffman, Chairman 

Subcommittee on Oversight & Investigations 

Æ 


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