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29–370 2018

ASSESSING VA’S RISKS FOR DRUG DIVERSION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MONDAY, FEBRUARY 27, 2017 

Serial No. 115–4 

Printed for the use of the Committee on Veterans’ Affairs 

( 

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

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(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

DAVID P. ROE, Tennessee, Chairman 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

AMATA COLEMAN RADEWAGEN, American 

Samoa 

MIKE BOST, Illinois 

BRUCE POLIQUIN, Maine 

NEAL DUNN, Florida 

JODEY ARRINGTON, Texas 

JOHN RUTHERFORD, Florida 

CLAY HIGGINS, Louisiana 

JACK BERGMAN, Michigan 

JIM BANKS, Indiana 

JENNIFFER GONZALEZ-COLON, Puerto 

Rico 

TIM WALZ, Minnesota, Ranking Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

KATHLEEN RICE, New York 

J. LUIS CORREA, California 

KILILI SABLAN, Northern Mariana Islands 

ELIZABETH ESTY, Connecticut 

SCOTT PETERS, California 

JON TOWERS, Staff Director 

RAY KELLEY, Democratic Staff Director 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

JACK BERGMAN, Michigan, Chairman 

MIKE BOST, Illinois 

BRUCE POLIQUIN, Maine 

NEAL DUNN, Florida 

JODEY ARRINGTON, Texas 

JENNIFER GONZALEZ-COLON, Puerto Rico 

ANN MCLANE KUSTER, New Hampshire, 

Ranking Member 

KATHLEEN RICE, New York 

SCOTT PETERS, California 

KILILI SABLAN, Northern Mariana Islands 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 

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(III) 

C O N T E N T S 

Monday, February 27 2017 

Page 

Assessing VA’s Risks For Drug Diversion ............................................................. 1 

OPENING STATEMENTS 

Honorable Jack Bergman, Chairman ..................................................................... 1 

Honorable Ann Kuster, Ranking Member ............................................................. 2 

WITNESSES 

Carolyn Clancy, M.D., Deputy Under Secretary For Health For Organizational Excellence, Veterans Health Administration, Department Of Veterans Affairs ......................................................................................................... 4 

Prepared Statement ......................................................................................... 26 

Accompanied by: 

Michael A. Valentino, R.Ph., MHSA, Chief Consultant, Pharmacy Benefits Management Services, Veterans Health Administration, Department of Veterans Affairs 

Mr. Nick Dahl, Deputy Assistant Inspector General for Audits and Evaluations,VA Office of Inspector General .................................................................. 6 

Prepared Statement ......................................................................................... 30 

Accompanied by: 

Emorfia Valkanos, R.Ph., Health Systems Specialist, Office of Healthcare 

Inspections, VA Office of Inspector General 

Mr. Randall B. Williamson, Director, Healthcare Team, U.S. Government 

Accountability Office ............................................................................................ 8 

Prepared Statement ......................................................................................... 33 

Keith Berge, M.D., Consultant in Anesthesiology, Chair, Mayo Clinic Enterprise-wide Medication, Diversion Prevention Committee, Mayo Clinic ........... 9 

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

STATEMENTS FOR THE RECORD 

Jeffrey Plagenhoef, M.D., President, American Society of Anesthesiologists ..... 39 

Letter From: Michael J. Missal - Reponse to Question ........................................ 41 

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ASSESSING VA’S RISKS FOR DRUG DIVERSION 

Monday, February 27, 2017 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON VETERANS’ AFFAIRS, SUBCOMMITTEE ON DISABILITY ASSISTANCE

AND MEMORIAL AFFAIRS, Washington, D.C. 

The Subcommittee met, pursuant to notice, at 3:30 p.m., in Room 

334, Cannon House Office Building, Hon. Jack Bergman [Chairman 

of the Subcommittee] presiding. 

Present: Representatives Bergman, Bost, Poliquin, Dunn, 

Arrington, and Kuster. 

Also Present: Representatives Roe and Walz. 

OPENING STATEMENT OF JACK BERGMAN, CHAIRMAN 

Mr. BERGMAN. Good afternoon. This hearing will come to order. 

I want to welcome everyone who has joined us today. 

Today, we will address the lack of oversight and internal controls 

regarding controlled substances within the Veterans Health Administration that leave facilities open to drug diversion and veteran harm. 

The diversion of drugs from VA health care facilities is an incredible patient safety issue that puts veterans, VA employees, and the 

public at tremendous risk. Unfortunately, the news has recently 

been filled with story after story of drug diversions within VA. 

In Little Rock, Arkansas, a VA pharmacy technician reportedly 

used his access to medical supplies Web sites to order and divert 

4,000 oxycodone pills, over 3,000 hydrocodone pills, and more than 

14,000 Viagra and Cialis pills, at the cost to the VA of more than 

$70,000. This technician was allegedly selling these drugs on the 

street, where they had a value of more than $160,000. 

At a VA facility in Florida, a registered nurse was apparently 

stealing oxycodone and hydromorphone from the hospital to feed 

her addiction. Keep in mind, these are medications that should 

have been going to veterans for their care. 

These issues are, in part, a result of VA having inadequate procedures in place to safeguard against theft and diversion of controlled substances. A recent Government Accountability Office 

audit requested by this Committee found that one VA medical center missed 43 percent of the required monthly inspections, mostly 

in critical care areas such as the operating room and the intensive 

care unit. In addition, three other facilities did not follow all of 

VHA’s requirements for inspections of controlled substances. 

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This is not the first instance where weaknesses were identified 

in VA’s controlled substance inspection program. In 2009 and 2014, 

the VA Office of Inspector General found that some medical facilities were not conducting monthly inspections and some inspections 

were incomplete. VA has been given multiple opportunities to address these concerns. This leaves me wondering what VA is doing 

to repair the lax oversight and apparent absence of accountability 

regarding these issues within VHA. 

To make matters worse, there are also issues with drug testing 

employees to ensure that they are suitable to provide care to our 

veterans. A 2015 Office of Inspector General report found that VA 

Medical Centers were not conducting preemployment and random 

drug tests for testing-designated positions in many instances across 

VHA, which amounted to tens of thousands of employees not receiving drug tests required by the Drug-Free Workplace Program. 

Most recently, in January 2017, the OIG found high backlogs in 

background checks, to include drug testing, for high-risk positions 

at the Atlanta VA Medical Center. 

It is precisely these tools that have been put into place to help 

protect patients and health care organizations from drug diversions 

and harm. However, VA does not seem to be taking them as seriously as it should. 

Based on the oversight reports and numerous diversion incidents 

we will discuss today, I am concerned that VA’s controlled substance oversight program is not working and that staff who fail to 

follow proper procedures are not being held accountable for violations. 

In case after case, what we see are examples of drugs being diverted for personal use or personal gain, yet there does not seem 

to be much progress made by the VA to correct the glaring problems that allow it to happen. 

What is even more concerning is that the programs to help deter 

diversion or identify illegal employee drug use are not being implemented consistently within the VA health system. We are in the 

midst of an opioid epidemic, and it’s time for VA to start making 

effective changes to avoid putting veterans and the employees who 

serve them at risk. 

With that, I recognize Ranking Member Kuster for her opening 

statement. 

OPENING STATEMENT OF ANN KUSTER, RANKING MEMBER 

Ms. KUSTER. Thank you, Mr. Chairman. 

And thank you for choosing this topic. I am particularly interested, as the cochair, the founding cochair, of our congressional 

Task Force to Combat the Heroin Epidemic. I appreciate this testimony. 

This afternoon, we are again examining VA’s role in ensuring 

that prescription drugs are safely controlled in VA medical facilities. 

Less than a year ago, former Chairman Kaufman and I held a 

hearing of the O&I Subcommittee on this very issue in Colorado 

because the Drug Enforcement Agency, DEA, found several violations in the Denver VAMC. We continue to hear disturbing reports 

in hospitals and clinics, in our communities, that some health care 

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employees are stealing controlled substances for their own personal 

use or personal gain. We know that these cases are on the rise 

throughout the country. 

One health care employee diverting controlled substances can be 

a serious public health risk and can cause significant harm to 

many patients. We learned this lesson the hard way in New Hampshire with the technician who was injecting himself with fentanyl 

at a hospital in Exeter, New Hampshire. But it turned out this had 

started at the Baltimore VA Medical Center and continued in more 

than a dozen hospitals in other States, infecting up to 50 patients 

in our community with Hepatitis C, and some of these patients 

were veterans. 

From this example, it is clear that the nationwide trend of opiate 

diversion also impacts our VA. The VA health system is one of the 

Nation’s leading prescribers of opioid medication. Diversion in the 

VA threatens the safety of veterans and hampers efforts to address 

the opioid epidemic in our communities. Preventing diversion of 

these substances should be a paramount concern. 

That’s why I find the GAO and IG’s findings particularly troublesome. It’s unacceptable that some VA medical facilities are not conducting routine inspections to prevent and identify drug diversion. 

Background investigations that could potentially identify employees who have diverted drugs or who may have a drug/substanceuse problem were backlogged in Atlanta. Healthcare employees at 

the Atlanta Medical Center were not subject to drug testing for 6 

months, which could identify diversion of prescription drugs. 

We need to get to the bottom of why these safeguards and processes are not being followed. I want to know if the procedures when 

followed would work to prevent drug diversion. I want to know if 

VA has the resources it needs to conduct the inspections, the background checks, and to administer its Drug-Free Workplace Program. 

I am also concerned about the VA hiring freeze that is currently 

in place and that VA HR employees are not exempt. The GAO and 

IG identified that staff need more personnel and more training to 

properly conduct these inspections. They also identified the need 

for more HR personnel to address the background-check backlog in 

Atlanta. Without adequate support staff in place, VA medical facilities will continue to struggle to comply with the procedures and 

programs that they must follow to ensure that our veterans receive 

safe care. 

Finally, I look forward to learning about progress at the VA with 

regard to the Opioid Safety Initiative that we passed within CARA, 

the Comprehensive Addiction and Recovery program, just last year 

to bring down the rate of opioid prescriptions for all of our veterans. We must do everything we can to help veterans suffering 

from chronic pain and to help veterans struggling with substance 

abuse and addiction. 

The opioid epidemic is destroying the lives of veterans and their 

families in communities across New Hampshire and all across the 

country, and we need to work together to find innovative solutions 

to end this epidemic. As I say to my colleagues, heroin does not 

choose R’s and D’s. We can work together. We are proud champions 

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of the Comprehensive Addiction Recovery Act that we passed last 

Congress, and I look forward to hearing about VA compliance. 

Thank you, Chairman Bergman, and I yield back. 

Mr. BERGMAN. Thank you, Ranking Member Kuster. 

I ask that all Members waive their opening remarks, as per this 

Committee’s custom. 

With that, I welcome our first and only panel, who is now seated 

at the witness table. 

On the panel, we have Dr. Carolyn Clancy, Deputy Under Secretary for Health for Organizational Excellence. She is accompanied by Dr. Michael Valentino, Chief Consultant for the Pharmacy Benefits Management Services of the Veterans Health Administration. 

We also have Mr. Nick Dahl, Deputy Assistant Inspector General 

for Audits and Evaluations. He is accompanied by Ms. Emorfia 

Valkanos, Health Systems Specialist for the Office of Healthcare 

Inspections in the Office of the Inspector General. 

Finally, we have Mr. Randall Williamson, the Director of the 

Healthcare Team for the Government Accountability Office; and 

Dr. Keith Berge, Consultant in Anesthesiology and Chairman of 

the Mayo Clinic Enterprise-Wide Medication Diversion Prevention 

Committee. 

I ask that the witnesses please stand and raise your right hand. 

Do you solemnly swear, under penalty of perjury, that the testimony you are about to provide is the truth, the whole truth, and 

nothing but the truth? 

Please be seated. 

Let the record reflect that all witnesses have answered in the affirmative. 

Dr. Clancy, you are now recognized for 5 minutes. 

STATEMENT OF CAROLYN CLANCY, M.D. 

Dr. CLANCY. Good afternoon, Chairman Bergman, Ranking Member Kuster, and Members of the Subcommittee. Thank you for the 

opportunity to discuss oversight of controlled substances and the 

Drug-Free Workplace Program at VA facilities. I will address inspections to minimize diversion, drug testing for selected employees, and our commitment to accountability for employees who do 

not live up to our core values. 

I am accompanied today, as you mentioned, by Mike Valentino 

from Pharmacy Benefits. 

GAO’s recently released report on medical facility controlled substance inspection programs in four of our facilities has prompted a 

swift response. We concurred with GAO’s six recommendations and 

are now implementing them. Expect them to be fully implemented 

by October of this year. We conducted a conference call last week 

with over 450 field-based staff to launch the action plans and to 

provide tools that support that effort, followed by distribution of 

written instructions. Additional dissemination efforts are planned 

over the next 2 weeks. 

Although GAO and VA Inspector General identified selected instances of noncompliance with these robust controls, I believe the 

system is working as designed to make it difficult for VA staff to 

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divert drugs and, most importantly, to give us the tools to be able 

to detect diversion rapidly and take action when it does occur. 

VHA implemented robust controlled substance internal controls 

in the early 1980s. In many cases, these measures exceed those required by the Controlled Substances Act, and we believe they align 

closely with Mayo Clinic’s recommended best practices. 

Data from January 2nd of 2014 through March 11th of 2016 

show that VA’s reported controlled substances loss rate is 0.008 

percent, or 8 per 100,000. And it is VA’s very own internal controls 

that lead to the vast majority of diversion cases being identified. 

The use of illegal drugs by VA employees is inconsistent with the 

special trust placed in those who care for veterans. 

The Inspector General recently reviewed allegations at the Atlanta VA Medical Center of a backlog of unadjudicated backgrounds investigations and found that mandatory drug testing of 

new hires did not occur over a 6-month period, resulting in a backlog of about 200 background investigations. It was also found that 

the Drug-Free Workplace Program was not administered from November of 2014 to May of 2015. 

Atlanta VA leadership implemented a number of changes in 2016 

in response to these recommendations, such as moving the human 

resources department under the direct supervision of the Medical 

Center director and developing a secondary database for staffing 

and tracking all background investigations. 

We expect that that backlog will be cleared by the end of this 

March, and, if not, we’ll keep you informed. 

In addition, VA has made great strides towards improving the 

Drug-Free Workplace Program. In October 2015, drug program coordinators began certifying on a monthly basis that employees selected for random drug testing were tested, when they were tested, 

or why they were not tested. 

The VA is also developing procedures to ensure the drug-testing 

coding of employees in approximately 180,000 testing-designated 

positions is accurate and complete. On March 1st of 2016, the Assistant Secretary For Human Resources and Administration published a memorandum stating that 100 percent of all applicants 

tentatively selected for appointment to a testing-designated position be drug tested prior to appointment. 

VA works closely with local, State, and Federal law enforcement 

entities to identify specific geographic areas with reported mail 

losses, and VA’s identification of loss clusters has led to successful 

arrests, prosecutions, and convictions. VA has developed a culture 

of controlled substance loss reporting and has adopted a practice of 

over- rather than underreporting suspected cases of diversion. 

Mr. Chairman, I am proud of the health care our facilities provide to our veterans, including prescription drug services. The 

issues we’re discussing here today are closely related to our Nation’s overarching struggle with opioid use. As a whole, our Nation 

needs to come up with a better alternative to pain management 

than opioids. 

VA is at the forefront of this challenge with our Opioid Safety 

Initiative, which we pioneered in August of 2013. We are actively 

reducing the number of opioids we prescribe and the number of 

veterans receiving these prescriptions. Instead, we’re offering a vaLeonard.horne on VACREP0180 with DISTILLER

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riety of complementary and integrative medicine treatments for 

chronic pain, such as chiropractic and acupuncture, among many 

other options. Initiatives like these will reduce the number of controlled substances VA prescribes, making it easier to maintain 

their oversight. 

With support from Congress, we look forward to continuing to 

improve our oversight of controlled substances and Drug-Free 

Workplace Programs, which will further improve the care of our 

veterans and the care that they deserve. 

Thank you for the opportunity to testify, and I look forward to 

your questions. 

[THE PREPARED STATEMENT OF CAROLYN CLANCY APPEARS IN THE

APPENDIX]

Mr. BERGMAN. Thank you, Dr. Clancy. 

Mr. Dahl, you are now recognized for 5 minutes. 

STATEMENT OF NICK DAHL 

Mr. Dahl. Mr. Chairman, Ranking Member Kuster, and Members 

of the Subcommittee, thank you for the opportunity to testify today 

on the Office of Inspector General’s work related to the Drug-Free 

Workplace Program and the oversight of controlled substances at 

VA facilities. 

I am accompanied by Emorfia Valkanos, who is a member of the 

OIG’s Healthcare Inspection staff in Manchester, New Hampshire, 

and is also a former VA pharmacist. 

The Federal Drug-Free Workplace Program was initiated with 

the goal of establishing a drug-free Federal workplace. The program made it a condition of employment for all Federal employees 

to refrain from using illegal drugs on or off duty. VA has designated safety-sensitive occupational series as testing-designated 

positions, including positions such as physicians, nurses, police officers, and motor vehicle operators. 

In recent years, the OIG has completed two projects that assessed aspects of the Drug-Free Workplace Program. In March 

2015, the OIG issued a report detailing the results of an audit of 

VA’s program. We identified program weaknesses in three areas. 

First, preemployment applicant drug testing. If a tested applicant has a verified positive test result, VA should decline extending 

a final offer of employment. However, we reported that VA did not 

ensure compliance with policy to drug test all applicants selected 

for a testing-designated position prior to appointment. Instead, VA 

selected only about 3 of every 10 applicants for testing. 

Second, employee random drug testing. We estimated VA 

achieved a national drug-testing rate of 68 percent of employees selected for random drug testing in fiscal year 2013. In our review 

of 22 randomly selected facilities, we found 4 facilities did not test 

any randomly selected employees, 10 had compliance rates ranging 

from 31 to 89 percent, while the remaining 8 facilities tested at 

least 90 percent of their randomly selected employees. 

We also estimated at least 9 percent of about 206,000 employees 

in testing-designated positions were not subject to the possibility of 

random drug testing because they were not properly coded with a 

drug test code in VA’s personnel system. Those not subjected to 

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random drug testing included physicians, nurses, and addiction 

therapists. 

Finally, reasonable-suspicion drug testing. We reported VA 

lacked sufficient oversight practices to monitor whether facilities 

referred all employees with a positive drug test result to the Employee Assistance Program. 

Based on our work, we determined VA’s program was not accomplishing its primary goal of ensuring illegal drug use was eliminated and VA’s workplace was safe. We made five recommendations, and, as of today, one recommendation remains open. 

A more recent report focused on human resources issues at the 

Atlanta VA Medical Center. During this review, we substantiated 

an allegation that there was no drug testing of employees in testing-designated positions for at least 6 months in 2014 and 2015. 

Despite the lack of drug testing for 6 months, we found no indications VA management at either the local or the national level was 

aware of the lapse. 

Because no drug testing occurred, the Atlanta VA Medical Center 

lacked assurance that employees who should have been subject to 

drug testing during this period remained suitable for employment. 

We made two recommendations focused on the Drug-Free Workplace Program, and VA reported they have taken action on these 

recommendations. 

VA also requires that managers at VHA facilities ensure that a 

controlled substances inspection program is implemented and 

maintained. The OIG has reviewed VA’s management of controlled 

substances during our combined assessment program reviews. We 

rolled up the results of our work in June 2014, and GAO references 

that work in their recent report. 

The OIG also has a vigorous investigative program related to 

drug diversion. We primarily focus on three categories: first, the diversion of controlled and noncontrolled substances by VHA employees. The diversion of drugs by health care providers for personal 

use is a serious issue that the OIG diligently pursues. 

Next, the diversion of controlled substances and noncontrolled 

substances for illegal distribution, which involve cases where VA 

pharmaceuticals are diverted or stolen for the purpose of illegal 

sale. 

Also, the diversion of controlled substances by a theft of mailed 

pharmaceuticals. Our investigations have revealed mailed pharmaceuticals are vulnerable to theft at any point in the process, with 

the most common occurrence being theft by employees of the mail 

carrier. 

In conclusion, the OIG has provided crosscutting oversight of the 

Drug-Free Workplace Program and controlled substances inspections through our audits and inspections. This oversight is necessary to ensure VA takes the steps necessary to reduce risks to 

the safety and well-being of veterans and VA employees by having 

and following proper program controls. We also actively investigate 

drug diversion and seek prosecution for those engaged in drug diversion. 

Based on our work in recent years, we have concluded VA lacked 

reasonable assurance that it is achieving a drug-free workplace and 

adequately securing controlled substances. 

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Mr. Chairman, this concludes my statement. We would be happy 

to answer any questions that you or other Subcommittee Members 

may have. 

[THE PREPARED STATEMENT OF NICK DAHL APPEARS IN THE APPENDIX]

Mr. BERGMAN. Thank you, Mr. Dahl. 

Mr. Williamson, you are now recognized for 5 minutes. 

STATEMENT OF RANDALL B. WILLIAMSON 

Mr. WILLIAMSON. Thank you, Chairman Bergman and Ranking 

Member Kuster and Members of the Subcommittee. 

The increase in the prescribing and use of opioids over the last 

two decades, sometimes referred to as the opioid explosion, has 

brought with it the need for medical facilities to undertake efforts 

to prevent diversion of opioids and other controlled substances by 

facility employees for their own personal use. 

Diversion of controlled substances can compromise patient treatment, can be costly to the facility, and can cause harm in our communities for those that are the recipients of illegally obtained controlled substances. 

I am here today to discuss our recent report on VHA’s efforts to 

prevent diversion of opioids and other controlled substances 

through its controlled substance inspection programs. 

All VA medical facilities that store and dispense controlled substances are required to undertake monthly inspections of all areas 

within the facilities that are authorized to have controlled substances. 

Each facility director is responsible for overseeing the inspection 

program and appointing a coordinator to manage the program and 

inspectors who conduct the inspections. Usually, both the coordinators and the inspectors have other responsibilities within each facility and work part-time on the inspection program. The coordinator is responsible for ensuring that monthly inspections are conducted and for submitting reports to the facility director summarizing inspections and any trends. 

We found that the program was not being managed according to 

VHA policy and needed improvement in certain areas. 

First, monthly inspections are not always being conducted as required. We visited four VA medical facilities across the country and 

found that, over a 14-month period, one facility missed 43 percent 

of the required inspections while another missed 17 percent. The 

operating rooms in one facility, for example, were not inspected at 

all because we were told that the inspectors needed to arrive before 

or after normal operating room hours and could not do so because 

of their conflicting work schedules. 

Second, when conducting the inspections, facility inspectors did 

not always follow VHA policy requirements, as was the case for 

three of the four facilities we visited. For example, inspectors don’t 

always verify that controlled substances have been properly transferred from pharmacies to automated dispensing machines in patient care areas; or inspectors didn’t always count all of the controlled substances stored in patient care areas. 

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Third, we found that local written inspection procedures were not 

fully consistent with VHA policy requirements. We found this problem at three of the four hospitals we visited. 

These three weaknesses increased the risk of diversion at VA facilities. 

We found that many of these problems were allowed to happen, 

in part, due to poor oversight at the facility and network levels. Facility directors at two of the four facilities we visited did not consistently perform their oversight responsibilities for the inspection 

program, which include reviewing monthly inspection reports and 

implementing corrective actions if missed inspections or other problems are identified. 

Also, we found that two of the four network managers who had 

oversight responsibilities for the medical centers we visited did not 

review facilities’ quarterly trend reports, as required. The controlled substance inspection coordinator is required to prepare and 

submit these quarterly reports based on trends identified in the 

monthly inspections. 

Further, one of the two networks that actually did review the 

quarterly trend reports took no action to ensure that one of the facilities in our review that had not prepared quarterly trend reports 

had a corrective action plan to do so in the future. 

Aside from the oversight weaknesses, we found that there is limited training for coordinators to better ensure that they have a 

complete and detailed understanding of VHA’s inspection procedures. 

Finally, two of the facilities we visited had backup coordinators 

to help manage the inspection process and complete inspections 

when the primary coordinator or inspectors could not carry out 

their responsibilities because of pressing job duties or unforeseen 

circumstances. We recommended that VA adopt this type of practice systemwide, and VA concurred. VA also concurred with our 

five other recommendations to improve the process and provide better oversight. 

This concludes my opening remarks. 

[THE PREPARED STATEMENT OF RANDALL B. WILLIAMSON APPEARS

IN THE APPENDIX]

Mr. BERGMAN. Thank you, Mr. Williamson. 

Dr. Berge, you are now recognized for 5 minutes. 

STATEMENT OF KEITH BERGE, M.D. 

Dr. BERGE. Chairman Bergman, Ranking Member Kuster, and 

Members of the Subcommittee, thank you for the opportunity to 

speak with you today about drug diversion from the health care 

workplace. Such diversion is a crime that endangers all patients, 

health care employers, coworkers, and even endangers the 

diverters themselves. 

While we have long known of these hazards of patients being deprived of pain medication by diversion, only fairly recently has the 

grave risk to extremely vulnerable patients been revealed by outbreaks of disease, such as blood poisoning by bacteria or viruses 

that have been transmitted by drug diverters swapping syringes in 

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the commission of their crimes. In the process, many patients have 

been infected with potentially fatal illnesses. 

I have attached for your review a paper authored by the CDC investigators outlining six such outbreaks over a 10-year period that 

resulted in illness and death in patients. 

One of these diversion infection scenarios included Veterans Affairs patients being exposed to a diverter that communicated his 

hepatitis C infection to approximately 50 patients. This individual 

was referred to earlier in the introduction comments. This diverter 

was a radiation technologist who traveled the country, working for 

multiple employment agencies. He had been fired from multiple 

jobs for diverting fentanyl for his own use, but by simply lying 

about previous terminations on job applications and in the absence 

of a national registry of radiation technologists, he had no trouble 

finding employment. 

In the darkened invasive radiology suites, he would swap 

fentanyl syringes on the anesthesia cart with ones he had previously used to inject himself. He would then excuse himself to a 

restroom, inject himself with the stolen fentanyl, draw up tap 

water, and repeat the process with the next patient’s fentanyl. In 

this manner, he conveyed his potentially lethal illness to many innocent victims. 

The patients described in these eight outbreaks were all extremely vulnerable positions, either undergoing an invasive procedure while under anesthesia or while in an intensive care unit. 

Clearly, such behavior is unacceptable. In recognition of these 

dangers posed by diversion, the Drug Enforcement Administration 

requires stringent drug control policies and procedures to be put in 

place to protect controlled substances from attack across all points 

of the manufacturing, distribution, dispensing, administration, and 

disposal spectrum. 

The drugs used in the health care setting are highly sought-after 

drugs of abuse, both by addicts and by those who would profit richly from the sale of stolen drugs. Experience at the Mayo Clinic and 

elsewhere has shown the necessity of having robust surveillance, 

detection, investigation, and intervention programs in place in 

order to minimize the risk to all involved. 

While it will impossible to completely eliminate drug diversion 

from the health care workplace, it is imperative that robust systems rapidly detect and halt such activity. I have attached for your 

review an article from the Mayo Clinic authors, myself included, 

which outlines our program from its inception through its very successful implementation. 

While we continue to try to improve our system, it has proven 

quite effective in identifying a host of drug diverters since implementation 7 years ago. Diverters come from diverse backgrounds 

and include physicians, pharmacists, pharmacy techs, nurses, nursing students, nursing assistants, janitors, patients, patient family 

members, nursing home attendants, hospice workers, and strangers 

off the street. 

These stories are incredible, but they all point to the powerful 

draw that these drugs have over addicts. As such, it is not good 

enough to merely have effective policies and procedures on the 

books; they must actually be rigorously followed. 

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Diverters are generally clever and desperate, and they will gravitate into areas of a system where they perceive the drugs to be 

most vulnerable to attack. It therefore behooves any health care facility to have a reputation for being effective at rapidly identifying, 

terminating, and prosecuting drug diversion and drug diverters. 

Only by doing so can we protect the most vulnerable of our patients 

from preventable harm. 

As I’ve stated, this problem will never go away, so we must become very good at rapid intervention. Only by instituting and following effective antidiversion policies and procedures will this be 

possible. 

I thank the Committee for its attention to this very important 

issue and stand ready to answer any questions you may have. 

Thank you. 

[THE PREPARED STATEMENT OF KEITH BERGE APPEARS IN THE APPENDIX]

Mr. BERGMAN. Thank you, Dr. Berge. 

The written statements of those who have just provided oral testimony will be entered into the hearing record. 

Mr. BERGMAN. We will now proceed to questioning. 

Dr. Clancy, in your testimony, you state that the VA performs an 

actual count of all controlled substances every 72 hours. Who performs these counts, and who oversees that these counts actually 

occur at each facility? 

Dr. CLANCY. So what I saw when I made a more or less unannounced visit to the D.C. VA last week is that pharmacy techs who 

are working in the vault are doing that, and they are double counting as they’re doing it. So, in other words, there are two assistants 

who are each verifying, because counting a lot of pills is prone to 

missing one and so forth. And that is further verified by a supervisor. 

Mr. BERGMAN. Given the weaknesses identified by the OIG and 

more recently by GAO, how can VA central office be sure that these 

counts are taking place and that they are accurate? You observed 

one. 

Dr. CLANCY. Yes. Well, I think that Dr. Berge just said it well. 

We have very good policies in place, but it’s very important that 

they are rigorously followed. So we are exploring right now how we 

might do some backup audit to make sure that those policies are 

followed. 

As I mentioned in my opening, we actually have already disseminated written statements to the field. I would be happy to make 

a copy of that memo available for the record or just for your interest. 

But, again, it’s very, very important to know that this actually 

happens, that our aspirations are as good as what we’re delivering 

on. 

Mr. BERGMAN. Thank you. 

Dr. Clancy, how many cases of drug diversion has the Controlled 

Substance Inspection Program identified in the last 2 years? 

Dr. CLANCY. So what I have here is a poster, which we could 

make available to the Committee—Mike, if you could just turn that 

around—of controlled substance losses by type. 

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12 

So the data that we looked at specifically goes from January 2nd 

of 2014 to March 11th, I believe, of 2016. What you see is that 91.4 

percent of these losses occur outside our facility in the mail system. 

And that leaves about 1.5 percent, I believe, from employees internally. 

But, again, this is something that we’re checking all the time. 

And if there’s any question whatsoever, VA police are engaged, as 

well as the Inspector General’s Office, and they’ve been most helpful. 

Mr. BERGMAN. And of those losses that occurred at VA facilities 

outside of the loss in the postal, will you be able to provide the 

Subcommittee a list of those facilities where the drugs have been 

reported missing or stolen in the last 2 years? 

Dr. CLANCY. We would be happy to do that. 

Mr. BERGMAN. Okay. 

Mr. Williams, what is the role of the medical center directors in 

terms of ensuring inspections and proper oversight? 

Mr. WILLIAMSON. Well, they are key at the facility level for reviewing the monthly inspection reports, identifying any issues that 

arise, such as missed inspections, inspections that are not done correctly and other things that the coordinator reports to them. And 

they then are responsible for holding staff accountable and developing corrective action plans. 

Mr. BERGMAN. I see I’ve got about a minute left here. 

Dr. Berge, VA’s Office of Human Resources Management reported to the OIG that they interpreted language in the VA’s DrugFree Workplace Handbook to require only some job finalists for 

testing-designated positions to be drug tested before being appointed. 

Would this be an acceptable practice in your health care organization? 

Dr. BERGE. I believe in our health care organization we do postoffer-of-employment testing on all applicants. 

Mr. BERGMAN. And what are the consequences for hiring health 

care workers prior to drug testing or completing background 

checks? 

Dr. BERGE. Well, you might be letting the fox in the henhouse. 

You might be letting somebody who would test positive and is, in 

fact, an addict into an area where they can get their hands on 

drugs. 

There’s an example of that in the Denver area within about 3 

years ago. Kristen Parker, she is now spending 30 years in Federal 

prison for infecting about 36 patients with her hepatitis C. But, in 

retrospect, she was a heroin addict that took a job in a facility and 

started diverting fentanyl. 

Mr. BERGMAN. Thank you. 

Ranking Member Kuster, you are recognized for 5 minutes. 

Ms. KUSTER. Thank you, Mr. Chair. 

Thank you to our panel. I particularly want to thank the GAO 

and the IG for their helpful reports. 

I want to focus in on evidence demonstrating we know what a 

successful drug diversion deterrence program would look like, and 

yet we continue to have this problem at various VISNs. 

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My question is: Currently, the VA gives authority to the individual facilities to implement these inspection procedures. Is there 

any reason—and I guess this is for Dr. Clancy—why the VA could 

not streamline this process and apply one standard to all facilities 

and, in fact, have an inspection team based out of the central office 

that would go out to the VISNs? 

It seems what I’m hearing is that this is often just an added 

task. In fact, in one case, it was somebody who was a food services 

worker, that this was just an add-on. It doesn’t seem as though 

we’re taking it sufficiently seriously. 

And wouldn’t it make more sense if we had an office of inspection 

that would then go out to the VISNs perhaps, as you did yourself, 

without advance warning and do these checks? 

Dr. CLANCY. Thank you, Congresswoman. That’s exactly what 

we’re going to be looking into. And I think what we need to look 

at is how much of this could be done remotely, how much of it requires on-site presence, and, frankly, how much can we identify 

ahead of time which facilities are likely to have the most challenges. 

I suspect that in some instances—but we need to test this—we 

will know which facilities are more likely to be compliant. I 

guessed correctly which one was the facility in the GAO report 

based on many, many other things I knew about that particular facility. And I wasn’t incredibly surprised by the distribution of the 

others. 

But we need to actually up our game and make sure that great 

policies are implemented consistently. There’s no question about 

that. 

Ms. KUSTER. And at least have consistency. What I’m curious 

about is having a system that would be consistent throughout. 

So I have got a couple minutes. I want to return to the issue of 

reducing the amount of opiate medication generally in the VA population. We had testimony from a medical researcher that, out of 

the 60,000 surgeries a year, 99 percent of people get opiate medication, and 1 in 15 will become a chronic user of opiates. That’s what 

is feeding this epidemic. 

Can you talk to me more about both the program within CARA, 

encouraging VAs to reduce the use of opiate medication, or any 

other examples that you might have in the system? 

Dr. CLANCY. Of course. And thank you for the question. 

I’m happy to report that we are on track for all the provisions 

in CARA. Incredibly enough, VA’s portion of that is named for a 

veteran who died under our care. And I was literally speaking with 

his father yesterday, and I have been most impressed by the family 

honoring the experience of their son by working with us to make 

sure that we provide better care. 

VA has really been on the forefront of reducing the use of 

opioids. So, beginning in August of 2013, we’ve seen a 31-percent 

reduction in the number of patients receiving opioids. We’ve seen 

a 56-percent reduction in the number of veterans who are receiving 

an opioid and another type of drug which has a particularly high 

risk for adverse reactions. 

We are doing much more frequent urine testing, because we’re 

trying to minimize diversion from patients, veterans actually sellLeonard.horne on VACREP0180 with DISTILLER

14 

ing the drugs that they got at VA to elsewhere. So the right answer 

on a urine drug screen is positive, that you’re actually taking the 

medications you received. 

We’re seeing the overall dosage of opioids has decreased quite 

significantly for—and we’ve also seen—we have seen these results 

at a time when we’ve seen an overall growth in the number of veterans we are serving. 

I want to be clear: We’re not done, and we will continue to monitor this. And I’m very proud of the work that we are doing to offer 

veterans alternatives to chronic pain management. 

Ms. KUSTER. My time is up, but I would just say to the chair 

that, as we continue, I would love to have further testimony about 

the chronic pain programs and how we can bring down the use of 

opiate medication. 

Thank you. 

Mr. BERGMAN. Mr. Bost, you are recognized for 5 minutes. 

Mr. BOST. Thank you, Mr. Chairman. 

And, Dr. Clancy, I’d like to continue down that same path. The 

Ranking Member actually asked the first part of the question I was 

going to ask, but I still want to go down that. And that was, okay, 

the report from 2009 and then again in 2014 on the weakness that 

the VA Controlled Substance Program had, now, you kind of explained what the VA central office was doing, but what about the 

VISN and at the faculty level? What are we doing there? 

Dr. CLANCY. So every one of our networks that’s a Veterans Integrated Service Network has a pharmacy lead there. I will say that 

it’s my understanding that there’s some variability in terms of how 

many other members of the team that they have. Many of them are 

quite strong in terms of reviewing facility reports and providing 

that kind of oversight. Others, it’s my understanding, are less so. 

I’d be happy to provide more detail for the record. 

But I think that we need a very consistent approach: here’s the 

facility’s responsibility; here is the second line, which should be the 

network; and then central office providing what is sometimes referred to as the third line of defense. I’m quoting from, sort of, accepted practices in internal audit, which is an area that we have 

just started up within my group. 

Mr. BOST. Okay. And I know that you’ve been trying to do that 

since the 2014 report, but why do you suppose that when all of a 

sudden the GAO came back, many of those same weaknesses 

showed up again? What are we not doing correctly to move quick 

enough to try to deal with this? 

And it is getting to a point of epidemic, and not just in the VA. 

It’s nationwide, the epidemic that we’re dealing with. But we have 

to set the example. 

Dr. CLANCY. I would agree. And that’s precisely how we think of 

it, as setting an example. 

I think, to some extent—I believe it was Mr. Williamson referred 

to the fact that some of these coordinators have collateral duties. 

I do note that, for many of our facilities, anesthesia and the operating rooms tend to be areas, probably because of the hours, where 

there have been problems conducting inspections. 

Every facility in our system has been directed, redirected quite 

recently, to have a backup coordinator. 

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15 

My colleague from pharmacy who’s here today—not Mr. 

Valentino, one of his top lieutenants—came with me the other day, 

and he noticed that maybe there was a little problem with not randomly conducting the inspections throughout the month. If you let 

it go till the end of the month, which is understandable—but, nonetheless, if, you know, stuff happens that week, that means you will 

have slipped a month and so forth. 

So that is the kind of thing that I think we can and will improve 

on. 

Mr. BOST. My next question is for Mr. Dahl. 

In your investigation related to the 2015 and 2017 reports, how 

many positions identified as no background check completed were 

the high-risk or the testing-designated positions? Do you know 

that? 

Mr. DAHL. Well, the 2015 report did not get into the background 

investigations. Our 2017 report, which was focused only on the Atlanta VA Medical Center, I wouldn’t have that information at 

hand, but I’d be happy to look into that. 

Mr. BOST. Can we get a copy of that to try to figure that out? 

Because we want everyone tested, because, as you described, somebody at the panel did, that everyone is at risk with this, anyone 

we hire. That being said, if we’re going to drop them into those 

high-risk positions, we’ve definitely got to do some backing up and 

making sure. 

And I’m kind of short on time here, but, Dr. Berge—and this is 

a question that I’m sure my constituents and people throughout 

this Nation are going to ask, would your health care organization 

hire a clinic professional prior to completing a background check? 

Dr. BERGE. No. 

Mr. BOST. That’s what I thought. 

Okay. What risks are associated with hiring a clinical staff prior 

to a background check? 

Dr. BERGE. Well, one source of frustration is, like, when we are 

interviewing an applicant for, say, our nurse anesthesia school, 

that employment law forbids us to ask, have you been through 

treatment for chemical dependency before? Well, we have had such 

people come in that developed fentanyl addiction and then, in retrospect, well, they’ve gone through treatment for cocaine abuse in 

the past. 

So, in some ways, we’re barred from asking some of those questions. But we would complete the post-offer-of-employment drug 

testing. 

Mr. BOST. And if I can just add, first off, let me say this—and 

I know I’m running short on time, Mr. Chairman—but this is an 

issue I’ve dealt with on a State level and then here at this level 

as well. The one thing we want to remember is how vitally important those tests are, because this disease—and it is a disease to be 

an addict. 

I had a friend that, one time, when we begged him to talk to us, 

he gave us an information, it wasn’t correct, and he came back and 

said to us, what part of I’m an addict, I lie, don’t you understand? 

That’s why it’s so vitally important to not only do the question but 

make sure that we do the followup checks. 

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16 

And the concern I see is the holes that are existing in the system. We can’t have it—we want to do everything we can to empower you to try to stop this epidemic that is affecting—and it 

doesn’t matter what your race is, what your gender is, what your 

socioeconomic status is. We’ve got to continue to work on this. 

So thank you very much. 

Mr. CHAIRMAN, I yield back. 

Mr. BERGMAN. Thank you. 

Mr. Walz, you are recognized for 5 minutes. 

Mr. WALZ. Thank you, Mr. Chairman. 

And thank you all for being here. 

Dr. Clancy, you and I have a long history in this too. Just for 

the Committee’s sake, for the new members, the first piece of legislation that we authored in 2008 was the pain directive that went 

to the VA to set up the step pain management. That was with a 

lot of work that came in from the folks from the Mayo Clinic, from 

Boston Scientific, and all of the best practices, working in conjunction with the VA. This is one of those issues that the seamlessness 

between the private sector and the VA is pretty strong. We all have 

the same issues. 

But my colleagues were getting at it, and the Ranking Member 

knows this, the fundamental issue here is pain management. It’s 

in the beginning, and our Nation goes through these cyclical issues 

of issuing opioids, pulling them back, which creates its own problem. 

The diligence on the control side, we can always do better on 

that. And I think there’s been some great suggestions there. But 

I would suggest to all of us—that program, am I right, Dr. Clancy, 

was never fully implemented? We had this discussion out in 

Tomah, Wisconsin, here about 18 months ago. Did we ever fully implement it before it expired? 

Dr. CLANCY. I’m not sure, but I could get back to you on that. 

What I do know is, thanks to the new legislation that Representative Kuster was asking about, the CARA bill, we are now making 

sure that there is pain management expertise and teams accessible 

by all our facilities. For some of our facilities, that’s going to be 

partly virtual, but, you know, as an integrated system, we can do 

that— 

Mr. WALZ. But it builds on that same principle— 

Dr. CLANCY. Absolutely. 

Mr. WALZ [continued].—and fully implemented the same thing 

that’s happening in the private sector. Because most of us know, 

as the VA goes, so goes the rest of the system in a lot of ways, just 

because of the sheer volume of this. 

How much collaboration, Dr. Clancy, do you have with, like Dr. 

Berge, experts that are out there? 

Dr. CLANCY. Well, I am just meeting Dr. Berge today, although 

we have a mutual colleague friend. But we consult with others 

pretty broadly. And, in fact, when the CDC published their guidelines on opioids last year, they drew on expertise from a number 

of folks in the VA, including from your district. Because, as you 

said, this is all about a common health challenge shared by the 

country. 

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17 

Mr. WALZ. Dr. Berge, again, thank you for being here. And you 

and your colleagues over the years have—I think the thing about 

this is to not think everything is reactive, and this recent opioid 

epidemic and the overdoses and everything else that come with it, 

that that was not a surprise to many folks like yourself. 

But when you said Mayo Clinic saw that you had maybe some 

holes in there, you decided to turn around, and now recognized as 

one of the best, how long did it take you to implement that before 

you saw or expected to see change? 

Dr. BERGE. We were probably about a year and a half in creating 

our system. And that was in response to a tampering diversion that 

ended up on the front page of the newspaper and embarrassed us. 

We tried to work through every spot in the supply chain where we 

were vulnerable and figure out a plan to address that. And it takes 

some time to go through that process. 

Mr. WALZ. And you have facilities—how many facilities? 

Dr. BERGE. Well, we have the Midwest, the Minnesota facility 

and surrounding area. We also have Jacksonville, Florida, and 

some small surrounding area; and Scottsdale, Arizona, and some 

surrounding area. 

Mr. WALZ. So the numbers, you have 50,000-plus employees, 

roughly? 

Dr. BERGE. About 70,000 employees. 

Mr. WALZ. About 70,000 for the entire system on that, so this is 

a big health care system that’s been able to—I think one of the 

maybe frustrations—and I know it frustrates you too, Dr. Clancy— 

is sometimes the slowness of the reacting to these situations as the 

bureaucracy takes time. 

You’re feeling comfortable now, Dr. Clancy, that there is, with 

the new legislation, with the emphasis on this, with the situations 

that come up that are unacceptable—and the thing is, as I think 

for many of us, we know that what’s happened in these situations 

that have been brought to light are happening in the private sector. 

Our responsibility is the VA. Our responsibility, both from an oversight and a legal responsibility but also from an ethical responsibility, is to those veterans. 

Do you feel like it’s moving quickly enough for you? 

Dr. CLANCY. I’m excited by how enthusiastic our employees are 

about this. I mean, this is a national problem. I’m excited by the 

progress we’ve made. But we will be tracking this very, very closely. 

Mr. WALZ. Because I get it too. They’re embarrassed by this. We 

recognize that when it’s not done right—the issue in—the surrounding areas impacted it. This is a tragic situation. 

I guess the news for all of us in here is we can do something 

about it and do something quickly, because we have that ability in 

the VA. And I guess I’m just looking to see these things maybe be 

implemented as quickly as we can, and I know you are too. 

And I thank you all for your testimony. 

Mr. BERGMAN. Thank you. 

Mr. Poliquin, you are recognized for 5 minutes. 

Mr. POLIQUIN. Thank you, Mr. Chairman, very much. 

Mr. Dahl, you’re with the Inspector General’s Office, correct, sir? 

Mr. DAHL. Yes, sir. 

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18 

Mr. POLIQUIN. And, Mr. Williamson, you’re with the Government 

Accountability Office? 

Mr. WILLIAMSON. Correct. 

Mr. POLIQUIN. Okay. Great. 

You two gentlemen, please, the last 8 years or so, you’ve repeatedly reported that there’s a problem with keeping track of the 

drugs at the VA facilities, making sure they’re not stolen and sold 

and so forth and so on. Is that correct? 

[Nonverbal response.] 

Mr. POLIQUIN. Okay. So would you both conclude that we still 

have a problem? 

Mr. DAHL. I’m sorry, I missed that. 

Mr. POLIQUIN. Would you conclude that we still have a problem? 

Mr. DAHL. I would think that, based on GAO’s recent work, that 

there is still an issue. 

Mr. POLIQUIN. Thank you. 

Dr. Clancy, you are the Deputy Under Secretary for Health for 

Organizational Excellence. What does that mean? Does that mean, 

in part, keeping track of who’s got these harmful drugs and make 

sure they’re not put in the wrong hands? 

Dr. CLANCY. What it means is providing oversight for quality, for 

safety of care, and for integrity. 

Mr. POLIQUIN. Okay. 

Dr. CLANCY. And integrity is about compliance with the stated 

policies. 

Mr. POLIQUIN. Okay. What person at the VA, Dr. Clancy, what 

one person is responsible for this problem? Who’s the head banana? 

Dr. CLANCY. That would be the Under Secretary for Health. 

Mr. POLIQUIN. Who’s that? 

Dr. CLANCY. Right now, that is someone in an acting position, 

Dr. Poonam Alaigh. You know that our Under Secretary was recently confirmed as Secretary. 

Mr. POLIQUIN. Could you spell that name for me, please? 

Dr. CLANCY. A-l-a-i-g-h. 

Mr. POLIQUIN. Okay. And you report to that person, that individual? 

Dr. CLANCY. What? 

Mr. POLIQUIN. You report to that individual. Is that correct? 

Dr. CLANCY. Yes. 

Mr. POLIQUIN. Okay. 

When someone is caught, Dr. Clancy, stealing drugs and selling 

them or making them available to folks that shouldn’t have them, 

like our veterans that we’re working so hard to help, what action 

is taken? 

Dr. CLANCY. It depends on the specifics of the circumstances— 

Mr. POLIQUIN. Do you call the cops? 

Dr. CLANCY. Yes. 

Mr. POLIQUIN. You do. Good. Okay. 

And what sort of actions recently have taken place in the system 

that you can share with us about people being held responsible for 

this abuse? 

Dr. CLANCY. I think you have probably seen from newspaper articles that a fair number of people that we have brought to the attention of law enforcement have, in fact, been convicted and are 

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19 

serving time. They’re paying their debt to society. And we would 

be happy to get you a whole list for the record. 

Mr. POLIQUIN. That would be great. We will make sure we get 

that list. Thank you very much. 

Integrated services networks, who are they and what do they do? 

And how are they involved in this? 

Dr. CLANCY. So we have facilities—that is hospitals, clinics, and 

so forth—all over the country, including Alaska and Hawaii and 

Guam and even a clinic in Manila and so forth. So a big, big span 

of reach. And so the system is organized into these networks. This 

is sort of a submanagement model. 

Mr. POLIQUIN. Okay. And what does the integrated service networks do? 

Dr. CLANCY. They manage and provide oversight for the facilities 

and clinics in that particular area. 

Mr. POLIQUIN. Okay. So they’d be responsible also for making 

sure that we have a good headcount, so to speak, on where the 

drugs are and where they’re being dispensed, correct? 

Dr. CLANCY. Yes. 

Mr. POLIQUIN. Okay. Good. And who’s the head person over 

there? 

Dr. CLANCY. There are 18 of these networks. So, in your area, 

that would be Dr. Michael Mayo-Smith for New England. 

Mr. POLIQUIN. Okay. We’ll make sure we get a list of these people also. 

Mr. Williamson, have you found in traveling around the country 

and dealing with separate VA facilities that there is inconsistency—and I think Congresswoman Kuster asked this question earlier; I want to make sure I get it straight—there is inconsistency 

in which organizations, which medical facilities actually do a better 

job than not in following these protocols? 

Mr. WILLIAMSON. Absolutely. 

Mr. POLIQUIN. Okay. How do you fix that problem? 

Mr. WILLIAMSON. There was one facility that we looked at that 

did everything right, and what was going on there was commitment and leadership from the medical director right down to the 

inspectors. And that’s what you need. It’s a culture— 

Mr. POLIQUIN. So there is an example at the VA that this can 

be done correctly. 

Mr. WILLIAMSON. Yes. 

Mr. POLIQUIN. Okay. And what would you guess, what percentage of the VA facilities around the country are doing this well? 

Mr. WILLIAMSON. Ten, 15 percent. 

Mr. POLIQUIN. Ten or 15 percent. 

So, Mr. Chairman, there are 85 percent of the VA facilities 

around the country who are dispensing drugs illegally or at least 

in a hurtful way, correct? 

Mr. WILLIAMSON. I wouldn’t say dispensing drugs illegally. 

They’re not following the tenets of the inspection process. 

Mr. POLIQUIN. Okay. And, as a result, these drugs get in the 

wrong hands. 

Mr. WILLIAMSON. Correct. 

Mr. POLIQUIN. Okay. Good. 

Dr. Berge, you’re in the private sector over at Mayo, correct? 

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20 

Dr. BERGE. Correct. 

Mr. POLIQUIN. Okay. At least you’re outside the government sector. 

Dr. BERGE. Correct. 

Mr. POLIQUIN. Good. Have you found that with an effective drug 

control program that you can save money? 

Dr. BERGE. I believe we can. I believe if you were to ask the executives of the Exeter, New Hampshire, hospital that’s being, you 

know, sued, you know, multiple lawsuits, that they wish they had 

a more effective system in place. 

Mr. POLIQUIN. Besides avoiding litigation, is there a way to save 

money when you have an effective program like this? 

Dr. BERGE. That’s extremely hard to quantify, I think. I mean, 

to have an effective system in place is not an inexpensive endeavor 

in itself. But it allows you to—we have heard that the word on the 

street is don’t go to work for Mayo, because if you’re going to steal 

drugs, they’ll catch you. 

Mr. POLIQUIN. Gotcha. Thank you. 

Thank you very much for being here. 

Mr. Chairman, thank you very much. 

Mr. BERGMAN. Thank you. 

Dr. Dunn, you are recognized for 5 minutes. 

Mr. DUNN. Thank you, Mr. Chairman. 

Dr. Clancy, I serve a constituency that actually has a veterans 

hospital, the Lake City facility. And there was testimony here that 

we did not read aloud but I think you’re familiar with that they 

had a problem in the Lake City facility recently with a nurse misappropriating drugs. 

Can you discuss the corrective actions and protocols that have 

been established at that Lake City facility in the wake of this incident to restore the quality of care and the level of workplace safety 

for the community? 

And, also, tell me if your current controlled substance coordinator in that facility is properly certified and educated on the management of controlled substances and the supply chain and the 

management policies. 

Dr. CLANCY. I would be happy to take that for the record. Our 

first focus was on protecting patients and then holding the individual accountable. But I will get the rest of the information— 

Mr. DUNN. Okay. So you’re not familiar with that particular incident in the Lake City facility? 

Dr. CLANCY. I am familiar with the incident. I’m not familiar 

with all of the details of the followup. But we will find that for you. 

Mr. DUNN. All right. 

Let me depart for a second. Dr. Berge, you’re an expert in substance abuse, I think, and how it comes to pass. I’m a surgeon, and 

I’ve managed operating rooms, I’ve directed hospitals and, you 

know, large clinics. And this is a problem we all have to address. 

It’s just part of the job that we have to do when we do health care. 

Mr. DUNN. And I’ve seen this studied at the State level as well. 

I’m looking at this particular pie chart here that suggests that 90 

percent of the problem with diversion with controlled substances is 

occurring not in the health care facilities, but in the United States 

Postal Service and in UPS. Now, I want to tell you that I’ve looked 

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21 

at a lot of drug diversion, a lot of problems with this in my 35-year 

career as a surgeon, I have never seen anything like this reported. 

This is perilously close to the old excuse, the dog ate my homework. 

Do you believe that 90 percent of the problem of drug diversion in 

this country occurs in the United States Postal Service? 

Mr. BERGE. I’m not really qualified to comment on that because 

that’s not where we see it. I’m basically assigned to within the 

walls of our healthcare facility, so what happens without, I don’t 

know. That’s not what we see at Mayo, we see other forms of diversion. 

Mr. DUNN. Perhaps I should redirect that question, Dr. Clancy, 

and say, do you mean by this that the 90 percent of the problem 

occurs in the Veterans Administration facility mail rooms? Or are 

you actually saying that employees of the United States Postal 

Service, and the United Parcel Service, or people who victimize 

them are getting 90 percent of the diverted drugs? 

Dr. CLANCY. What I am saying, and I’ll ask my colleague to 

elaborate, is that between the time the prescriptions are put in an 

envelope, and understand that we have a central mail order pharmacy which, for most prescriptions, works extraordinarily well, it 

does a high order of business, very large volumes. Somewhere between there and the veterans home where it was supposed to go 

is where it is diverted. On occasion, we’ve heard from veterans that 

that’s actually diverted by a family member and so forth. But it 

could be any one of those points and that’s where working with the 

inspector general, VA police, and outside law enforcement has been 

very helpful. 

Mr. DUNN. Okay. So let’s drill down on this a little bit farther, 

because this looked like they were laying it off on the Postal Service. What’s happening is the VA is taking—getting receipt of the 

drugs from who they purchased from, and then they are distributing it in their system. Now they may be using UPS or USPS, and 

somewhere between once the VA has the drug and the VA passes 

it off to another part of the VA, the drugs are being diverted. Is 

that the system? 

Dr. CLANCY. No, this is outside the VHA system. 

Mr. DUNN. So I have to tell you, 35 years, I’ve never heard this 

kind of accusation, 90 percent of the problems in the postal system, 

I’m flabbergasted, Mr. Chairman. And let the record reflect my incredulity. 

Mr. WILLIAMSON. Dr. Dunn, we looked at this. One of the first 

things that we tried to obtain was good data. I would be very suspicious of the VA data because drug losses are not always synonymous with diversion, so one has to be careful of that. But the reporting system, VA doesn’t have a good reporting system for drug 

diversion cases, so I would be very suspicious of this VA data. 

Mr. DUNN. I am too. Thank you. 

Mr. BERGMAN. Thank you. 

Dr. Roe, you’re recognized for 5 minutes. 

Mr. ROE. Thank you, Mr. Chairman. I want to go along with a 

little bit of what Dr. Dunn was doing. Obviously, we know that 

there’s a drug epidemic, and certainly in the State of Tennessee I 

live in, it is. Is there any data on how many veterans die of drug 

overdose deaths by both with Diazepines and with opioids? Dr. 

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Clancy, do you have any information on that? How many of our 

veterans? 

Dr. CLANCY. We do track that very closely, and we would be 

happy to get that for you for the record. 

Mr. ROE. The other thing I have, as I looked at this graph more, 

I couldn’t figure out you determined 90 percent. I mean, if somebody is home and just said I didn’t get my drugs. Look, one good 

thing, if there is any good thing about an electronic health record, 

what used to happen to us when we would close our office at 5 

o’clock, people would start calling in and ask about, Well, I just had 

surgery—we had a big practice—2 weeks ago, and Dr. So-and-so 

didn’t leave me enough medicine, I need you to call me a prescription in. The EMR, I’d just pull it up and say, well, you don’t seem 

to be a patient in our practice. People are very clever at being able 

to get drugs. How many—when you say 90 percent, how in the 

world could you ever figure that number out, because you say here 

that the Post Office doesn’t deliver it. How do you know that? 

Mr. VALENTINO. I can help with that. This is based on a sample 

of reports from January 2014 through March of 2016. So whenever 

we have a loss, we have a template that the individual facility fills 

out. What happened? Who did you report it to? DEA, OIG, VA police and security and so on and so forth. In those reports, we’re able 

to glean information and identify if it was a situation where a VA 

staff member diverted a drug, or whether it was a patient calling 

and saying, I didn’t get my package. And our packages are sent 

with tracking information. 

So we can tell where it is in the delivery stream. And at some 

point, if the patient says they don’t get it, we have one of two situations: either they did get it, or a family member got it, or it went 

missing somewhere. So these are—I agree, these may not be diversions, but these are indeed lost reports that are generated— 

Mr. ROE. I’m sorry to interrupt you, because my time is short. 

But it looked to me like, if we can know how many died, if there 

is a real problem, looks like there may be a better way to deliver 

these medications to people, than sending them out in the mail. I 

mean, if that’s where nine out of 10 of these problems are, and 

we’re losing a lot of people, it looks to me like that’s a sloppy system, if that’s the case. 

Anyway, Dr. Clancy, in your written testimony, you said 92 percent of—get lost by mail, and you sort of answered about how you 

got at that information. And in viewing the DEA forms 106 submitted to the Committee, we learned of instances where VA mailed 

controlled substances to the wrong address, and worse, to the 

wrong veteran. How many cases from the 92 percent that were 

missing in the mail were those delivered to the wrong address or 

to the wrong person? That’s really sloppy. 

Dr. CLANCY. We would be happy to get that for the record. 

Mr. ROE. Well, just—and we appreciate that. And please take 

that for the record and note that the numbers—and bring those 

numbers to the Committee. And for now, what’s the VA doing to 

ensure that they get the right prescription? That’s just sloppy work 

when you mail it to the wrong address, or to the wrong person, for 

goodness sakes. 

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Dr. CLANCY. There’s a big part of the effort initiated by Secretary 

McDonald and my VA transformation that includes making sure 

that veterans data is integrated from multiple sources, because 

after all, many veterans get multiple services from us, so that 

when they move, change phone numbers or whatever, we’ve got accurate information. Everything that is mailed out is bar-coded so 

that it can be tracked. So if a veteran calls up a facility and says, 

My medications didn’t come, they can actually track it, there’s a 

tracking number, whether it’s Postal Service or UPS. And ultimately, that’s helpful in law enforcement in figuring out what happened. 

Mr. ROE. But is that a system we want to continue at the VA? 

Because the VA is a huge system, and treating millions of people, 

and not thousands, but millions. 

Mr. VALENTINO. So you’re right, absolutely right that this is an 

area where it’s not working as well as it should. If we required 

every veteran to come in to pick up their controlled substances, we 

could certainly do that, I think it could create some unintended 

consequences, some of our veterans live very far away. So we may 

have to look at other options for them to get their controlled substances. 

Mr. ROE. Now I agree with that, it would do that. I’m not saying 

that you should do that. We have a situation now where there’s 30- 

something thousand people, these are all deaths that are preventable. It is really disturbing to me, that when you have probably as 

many people die of drug overdose deaths as car wrecks now, so it 

is a huge problem for the entire country. 

Mr. Chairman, I yield back. 

Mr. BERGMAN. Mr. Poliquin is recognized for one follow-on question. 

Mr. POLIQUIN. Thank you very much, Mr. Chairman. I appreciate 

it. I would like to follow up on what Chairman Roe was just talking 

about. It’s clear to me and I think everybody in this room that the 

VA, and God bless them, they are doing a horrible job when it 

comes to this issue. Why in the heck do we have to dispense the 

pills from the VA? How many pharmacies do we have in this country? I don’t know, Doctor, I mean we have a bunch of them, right? 

Why in the heck can’t we have pharmacies around the country closer to where our population is, where our veterans are, why don’t 

they dispense the pills, if you guys are doing such a horrible job? 

Dr. Clancy? 

Dr. CLANCY. I’m sure, as my colleague noted, first of all, mail 

order works extraordinarily well for other types of medications, and 

as we work through how to reduce this area of vulnerability, there 

may be a lot of other options that we could consider. 

Mr. POLIQUIN. Good. So, in other words, what you are saying if 

you’re getting an aspirin or something like that, it will probably 

make sense, but a controlled substance. Maybe it’s better if it’s 

closer to home, right, where folks come in and they are known by 

the folks at the pharmacy, and you know, we’ve got a problem here, 

so forth and so on. Why not? I think we ought to consider that. I 

don’t know what the protocol is, Mr. Chairman, I bet these nice 

folks can come back to us at some time and report back to us. I 

would like to follow up, if I can, along the same vein, is that Mr. 

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Dahl and Mr. Williamson, my eyes are bad, it’s Mr. Williamson, 

right? Great. You two fellows said that roughly 10 or 15 percent 

of the medical facilities in the VA are doing this right. That means 

there are 80, or 85 percent, or 90 percent— 

Ms. WILLIAMSON. That’s what I would—we only looked at four, 

and the IG looked at 58, but that’s based on, you know, some— 

Mr. POLIQUIN. There are a bunch of them that are doing it 

wrong? 

Ms. WILLIAMSON. Excuse me? 

Mr. POLIQUIN. There are a bunch of them that are doing it 

wrong? 

Ms. WILLIAMSON. Correct. 

Mr. POLIQUIN. I have an idea, Mr. Chairman, why don’t we get 

you nice folks to talk to our great staff here, and find out who’s 

doing if right? And we’ll have our staff, Mr. Chairman, call up the 

folks that are doing it right, and let’s find out why they are doing 

it right, and then maybe we can have this nice person, Mr. Alaigh, 

who, I believe, Dr. Clancy report to, who would be the Under Secretary for Health Organizational Excellence, have him come before 

the Committee, and then we can see, okay, we’ve had these folks 

that are doing it right, now we’re having a problem at the VA doing 

it wrong. Maybe you can tell us why 80 percent are doing it wrong. 

It’s just an idea. What do you think about that, Mr. Dahl, do you 

think that would work? 

Mr. DAHL. I missed that last part, sir. 

Mr. POLIQUIN. Do you think that would work? Would that give 

us a little bit of help to the folks that are doing it wrong? 

Mr. DAHL. Best practices, it wouldn’t hurt to share them. 

Mr. POLIQUIN. There you go. We are all trying to get this right, 

because we have a lot of veterans who are in pain, and we got a 

lot of folks that are having problems with opioids and heroin, including the Second District of Maine that I’m very concerned about. 

So anything that we can do to help you folks, we’ll do that. And 

I know our great staffer, Kate, will be in touch with you folks to 

get the names that we talked about. 

Yes, Doctor. 

Dr. CLANCY. I just wanted to make the point that we often do 

do sharing of best practices and have a big initiative on that now, 

and I think it is a splendid idea to— 

Mr. POLIQUIN. Have you been doing that for the last 8 years? 

Dr. CLANCY. Not in this particular area. We have focused a lot 

on reducing opioid use. 

Mr. POLIQUIN. The last year, the last 2, or the last 3? 

Dr. CLANCY. The last couple of years. 

Mr. POLIQUIN. The last couple of years. But you still have about 

80 percent not doing it right? 

Dr. CLANCY. I am not quite as confident. I think that may be a 

slightly pessimistic projection, but I will tell you when we look, I 

will let you know. 

Mr. POLIQUIN. Thank you. Even more, Mr. Chairman, more reason for us to get the folks who are doing it right to come and report 

to us and maybe have the person who is in charge of everybody tell 

us why the other folks are doing it right. 

Dr. CLANCY. If I might, Dr. Alaigh is a woman. 

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Mr. POLIQUIN. Wonderful. Thank you very much. I appreciate it. 

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

Mr. BERGMAN. Thank you. Thanks to everyone. Thanks to the 

witnesses. This has been a great next first step as we move forward with a very serious issue here. You are now excused. 

It is clear from the testimony that has been provided today, as 

well as the numerous cases we here about in the news that drug 

diversion is a major problem at VA facilities. The lack of oversight 

over VA’s controlled substances and the apparent lack of accountability for failing to monitor proper distribution, storage and destruction is troubling. We hope that by bringing this issue to light, 

it will encourage the VA to take steps necessary to impose better 

oversight and control. 

I look forward to hearing back on the progress and changes the 

VA is making. I ask unanimous consent that all Members have 5 

legislative days to revise and extend their remarks and include extraneous material. Without objection, so ordered. 

I would like to, once again, thank all our witnesses and the audience members for joining in today’s conversation. With that, this 

hearing is adjourned. 

[Whereupon, at 4:44 p.m., the Subcommittee was adjourned.] 

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1Gellad, W.F., Good, C.B., & Shulkin D.: Addressing the opioid epidemic: Lessons from the 

Veterans Affairs. JAMA Int. Med. (in press). 2 Aspinall, S.L., Sales, M.M., Good, C.B., Canzolino, J.J., Calabrese, V., Glassman, P.A., Burk, 

M., Moore, V., Neuhauser, M.M., Golterman, L., Ourth, H., Morreale, A., Valentino, M., & 

Cunningham, F.E. Pharmacy benefits management in the Veterans Health Administration revisited: 2004–2014- A decade of advancements. J. Manag. Care. Pharm. 2016; 22(9):1058–1063. 3 United States Senate Committee on Veterans’ Affairs, Hearing on Overmedication: Problems 

and Solutions. Apr. 30, 2014. 113th Cong. 2nd sess. Washington: GPO, 2015 (statement of Mark 

Edlund, Health Services Researcher, RTI International). 

A P P E N D I X 

Prepared Statement of Carolyn Clancy, M.D. 

Good morning, Chairman Bergman, Ranking Member Kuster, and Members of the 

Subcommittee. Thank you for the opportunity to discuss oversight of controlled substances and Drug Free Workplace programs at Department of Veterans Affairs (VA) 

facilities. I am accompanied today by Michael A. Valentino, Chief Consultant for the 

Veterans Health Administration’s (VHA) Pharmacy Benefits Management Service 

(PBM). 

Introduction 

VHA is the Nation’s largest integrated health care system, and pharmacy services 

are a vital part of delivering the high-quality health care our Veterans deserve. Our 

pharmacy program is widely regarded as the professional benchmark for clinical 

pharmacy practice, drug formulary management, prescription fulfillment services, 

and 1A1medication 1A2safety. 3

VHA’s PBM is responsible for providing a broad range of pharmacy services via 

260 VA medical center and community-based outpatient clinic pharmacies and 7 

Consolidated Mail Outpatient Pharmacies (CMOP). In fiscal year (FY) 2016, VHA 

dispensed more than 147 million prescriptions to over 5 million unique Veterans. 

Of these, 30 million were provided by medical facility pharmacies, and 117 million 

by CMOPs. 

Oversight of controlled substances is multi-faceted and involves: 1) ensuring VA 

lists controlled substances on its National Formulary that have evidence of safety 

and effectiveness; 2) providing evidence-based prescribing criteria for controlled substances; 3) developing internal controls for physical drug security; 4) using electronic 

prescribing to prevent forgery; 5) monitoring suspected cases of theft or diversion 

and taking appropriate follow-up action; 6) addressing any controlled substances 

prescribing that does not align with evidence-based criteria; 7) implementing patient-focused initiatives such as medication take-back programs; 8) overdose education and naloxone distribution; and 9) ensuring the availability of complementary 

and integrative medicine therapies in place of controlled substances. 

As part of its long-standing focus on medication safety, VHA implemented robust 

controlled substance security measures in the early 1980s. In many cases, these security measures far exceed the requirements of the Controlled Substances Act 

(CSA). For example, CSA requires that an actual count of scheduled II controlled 

substances and an estimated count of most of Schedule III through V controlled substances be performed every two years. However, VA performs an actual count of all 

Schedules of controlled substances every 72 hours. In addition CSA allows Schedule 

III through V controlled substances to be dispersed among non-controlled substances 

in the pharmacy. However, VA requires all Schedules of controlled substances to be 

stored under lock and key, with electronic access controls requiring two-factor authentication. 

Individuals who are determined to divert controlled substances may find a way 

to do so despite the existence of robust controls. This is true within and outside of 

VA. Data from January 2, 2014, through March 11, 2016, show that VA had 2,405 

reports of internal and external losses, some of which were due to diversion. The 

data also show that approximately 92 percent of controlled substances losses occur 

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in the mailing system during shipping to the Veteran, 1.5 percent of losses are due 

to diversion by VA staff, 1.2 percent are due to external theft outside of the mailing 

system, 0.3 percent are due to dispensing errors and 5.6 percent are unknown but 

likely due to manufacturer shortages in stock bottles, miscounts, or similar issues. 

During this same time period, VA dispensed approximately 29 million prescriptions for controlled substances, as well as a very large number of individual doses 

of controlled substances for hospitalized patients. Using only the number of controlled substance prescriptions, which overestimates reports of loss by not including 

inpatient doses, the 2,405 reports filed indicate a controlled substance loss rate of 

0.008 percent. 

Opioid Safety Initiative (OSI) 

The OSI was chartered by the Under Secretary for Health in August 2012 and 

piloted in several Veterans Integrated Service Networks (VISN). Based on the results of these pilot programs, OSI was implemented nationwide in August 2013. The 

OSI objective is to make the totality of opioid use visible at all levels in the organization. This includes key clinical indicators such as the number of unique pharmacy 

patients dispensed an opioid, unique patients on long-term opioids who receive a 

urine drug screen, patients receiving an opioid and a benzodiazepine (which puts 

them at a higher risk of adverse events), as well as the average morphine equivalent daily dose (MEDD) of opioids. 

OSI has demonstrated achievement by multiple metrics, including by: a reduction 

in the number of patients receiving opiate analgesics; 2) a reduction in the number 

of patients receiving them for longer than 90 days; 3) a reduction in the concurrent 

prescription of opiate analgesics with other controlled substances that have potential for drug interactions; 4) a reduction in their average daily dose; and 5) an increase in the number of patients who are receiving opiate analgesics with completed 

drug screens. 

Results of key clinical metrics for the OSI from the fourth quarter 4 of FY 2012 

(beginning in July 2012) to the first quarter of FY 2017 (ending in December 2016) 

are: 

• 208,036 fewer patients receiving opioids (679,376 patients to 471,340 patients, 

a 31 percent reduction); • 69,148 fewer patients receiving opioids and benzodiazepines together (122,633 

to 53,485 patients, a 56 percent reduction); • 157,300 fewer patients on long-term opioid therapy (438,329 to 281,029, a 36 

percent reduction). • The percentage of patients on long-term opioid therapy who have had a urine 

drug screen to help guide treatment decisions has increased from 37 percent to 

86 percent (a 49 percent increase) • The overall dosage of opioids is decreasing in the VA system as 26,350 fewer 

patients (59,499 to 33,149, a 44 percent reduction) are receiving greater than 

or equal to a 100 MEDD. 

Additionally, the desired results of OSI have been achieved despite an overall 

growth of 119,766 patients who are receiving prescriptions from VA at the same 

time. While these changes may appear to be modest, given the size of the VA patient population, they signal an important trend in VA’s use of opioids. VA expects 

this trend to continue as it renews its efforts to promote safe and effective pharmacologic and non-pharmacologic pain management therapies. 

GAO Report 

The Government Accountability Office (GAO) provided VHA a draft report on December 16, 2016, titled VA HEALTH CARE: Actions Needed to Ensure Medical Facility Controlled Substance Inspection Programs Meet Agency Requirements. In the 

report, GAO found that diversion of opioid pain relievers and other controlled substances by health care providers has occurred at several VA medical facilities. VA 

concurred with GAO’s six recommendations from this report: 

1.The Under Secretary for Health should ensure that VA medical facilities have 

established an additional control procedure, such as an alternate controlled substance coordinator or a pool of extra inspectors, to help coordinators meet their responsibilities and prevent missed inspections. 

2.The Under Secretary for Health should ensure that VA medical facilities have 

established a process where coordinators, in conjunction with appropriate stakeholders (e.g., pharmacy officials), periodically compare facility inspection procedures 

to VHA’s policy requirements and modify facility inspection procedures as appropriate. 

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3.The Under Secretary for Health should improve the training of VA medical facility controlled substance coordinators by ensuring the training includes the inspection procedures that VHA requires. 

4.The Under Secretary for Health should ensure that medical facility directors 

have designed and implemented a process to address nonadherence with program 

requirements, including documenting the nonadherence and the corrective actions 

taken to remediate nonadherence or the actions that demonstrate why no remediation is necessary. 

5.The Under Secretary for Health should ensure that networks review their facilities’ quarterly trend reports and assure facilities take corrective actions when nonadherence is identified. 

6.The Under Secretary for Health should ensure that networks monitor their medical facilities’ efforts to establish and implement a review process to periodically 

compare facility inspection procedures to VHA’s policy requirements. 

The final GAO report was published on February 15, 2017, and VA is in the process of implementing the recommendations: 

1.VHA’s Directive 1108.02, Inspection of Controlled Substances, provides guidance 

to Facility Directors to ensure the Controlled Substances Programs develop and remain compliant with the requirements. The PBM will develop a memorandum that 

outlines the expectations of Directive 1108.02 and specifically the requirements to: 

1) have mandatory training; 2) appoint an alternate Controlled Substance Coordinator; and if one is not already appointed, to provide back-up support; and 3) adding 

inspectors to the program to ensure inspections are not missed. Each Facility Director will then be provided this memorandum, and Facility Quality Managers (QM) 

will report compliance to the VISN QM Officer. 

2.Each Medical Facility Director will be required to compare the current inspection program policy and procedures with VHA Directive 1108.02 using the Self-Assessment guide. The self-assessment will be completed by a multidisciplinary group 

including the Controlled Substance Coordinator, Chief of Pharmacy or designee, 

Nurse Executive or designee, and Facility QM or designee. The results of the selfassessment will be reviewed by the facility QM Committee. An action plan must be 

developed for identified deficiencies and progress tracked until completion through 

the QM committee. 

3.The Deputy Under Secretary for Health for Operations and Management 

(DUSHOM) will provide the memorandum developed in response to Recommendation 1 that outlines the requirements that all current and future Controlled Substance Coordinators complete the Talent Management System web-based Controlled 

Substance Inspector Certification training program in addition to the Controlled 

Substance Coordinator Orientation Training Course. The certification course contains detailed information on conducting inspections. VHA Directive 1108.02, Inspection of Controlled Substances, will be updated with this requirement. 

4.PBM will develop guidance to be distributed by the DUSHOM directing Medical 

Facility Directors to assess adherence with program requirements at least quarterly. 

The facility QM Committee will review and evaluate monthly and quarterly reports 

for adherence with requirements and corrective actions taken or required to ensure 

compliance with program requirements in VHA Directive 1108.02. All corrective actions will be documented and followed through to completion by the QM Committee 

and reported to the Medical Facility Director. 

5.PBM will develop a memorandum that outlines the expectations of Directive 

1108.02 and specifically the requirements that Networks will: 1) review their facilities’ quarterly trend reports and ensure facilities take corrective actions when nonadherence is identified, and 2) monitor their medical facilities’ efforts to establish 

and implement a review process to periodically compare facility inspection procedures to VHA’s policy requirements. The DUSHOM will provide this memorandum 

to each Network Director, who will disseminate it to the Facility Directors, thereby 

ensuring appropriate actions have been taken to ensure the actions listed in the 

memorandum are completed. 

At completion of each of these actions, the VISN QM Officer will monitor compliance and provide an action plan for any non-compliant facilities within that VISN 

to PBM and the DUSHOM. The two offices will meet and decide whether any further actions are needed. The status of each response is in process, and the target 

completion date is October 2017. 

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VA’s Drug Free Workplace Program 

VA, as an employer, understands that well-being of its employees is essential to 

the successful accomplishment of the agency’s mission, and is dedicated to maintaining high employee productivity. As such we are committed to implementing Executive Order (EO) 12564, signed by President Ronald Reagan on September 15, 1986, 

requiring all Federal agencies to develop a plan to combat drugs in the workplace. 

VA takes very seriously our mission to provide top quality care and services to 

our Veterans. In doing so, our human resources offices play a very vital role in implementing our Drug Free Workplace Program (DFWP). As the second largest employer in the Federal Government, VA can and should continue to show the way 

towards achieving drug-free workplaces through programs designed to offer drug 

users a helping hand and, at the same time demonstrating that drugs will not be 

tolerated in the workplace. The use of illegal drugs by VA employees is inconsistent 

with the special trust placed in such employees who care for Veterans. VA has recently made great strides towards improving the Drug Free Workplace Program. 

Beginning in October 2015, Drug Program Coordinators began certifying on a 

monthly basis that employees selected for random drug testing were tested, when 

they were tested, or why they were not tested. In November 2015, the Office of 

Human Resource Management began reviewing the data entered in the notification 

site for compliance and has continued in the ensuing months to conduct this review. 

Those Coordinators not in compliance with the certification process are reported to 

their chain of command until compliance is achieved. 

VA is developing procedures to ensure the drug testing coding of employees in 

Testing Designated Positions (TDP) is accurate and complete. We are working with 

our HR Smart (VA’s recently implemented human resources information system) 

business partner to implement a monthly process ensuring that all employees occupying Testing Designated Positions identified in VA Directive 5383 are included in 

the pool of random selectees each month. The update process will run prior to the 

random selection of employees to be tested that month. In addition, queries are now 

available to human resource (HR) offices to assist them in ensuing all testing designated positions are appropriately coded. 

VA is committed to 100 percent testing of all final selectees for Testing Designated Positions prior to appointment. On March 1, 2016, the Assistant Secretary 

for Human Resources and Administration published a memorandum stating that 

100 percent of all applicants tentatively selected for appointment to a TDP be drug 

tested prior to appointment. 

VA has implemented a process to monitor local compliance with VA’s DFWP requirements. Beginning in March 2016, the DFWP website was modified to reflect 

that Coordinators were to certify that all applicants selected for all TDPs were tested in accordance with VA Handbook 5383. Those Coordinators not in compliance 

with the certification process are reported to their chain of command until compliance is achieved. 

OIG Review of Drug Testing at Atlanta VA Medical Center 

In April 2015, the VA Office of Inspector General (OIG) opened an investigation 

at the Atlanta VA Medical Center (VAMC) to review allegations of a backlog of over 

300 unadjudicated background investigations and that mandatory drug testing of 

new hires did not occur over a 6-month period. It is important to note that this inspection happened before many of the institutional changes described above were 

implemented. 

The investigation substantiated both allegations and found that, as of July 2015, 

the Atlanta VAMC had a backlog of about 200 unadjudicated background investigations; Atlanta VAMC human resources personnel acknowledged a backlog dating as 

far back as 2012. It was also found that the DFWP was not administered from November 2014 to May 2015. 

VA appreciates OIG’s work in making recommendations to improve our hiring 

processes. Atlanta VAMC leadership implemented a number of changes in 2016 including: 

• realigning the human resources department under the direct supervision of the 

Medical Center Director; 

• hiring a new human resources officer; 

• dedicating a senior staff member to the personnel security section to oversee 

personnel assigned to that function; and 

• developing a secondary database to work in tandem with the current system for 

staffing and tracking all background investigations, expiration, status, open and 

closed dates. 

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Atlanta VAMC identified 220 employees who require drug testing, and began notifications to these employees in December 2016. A phased approach is necessary to 

take into account workload, the number of people tested, and staffing levels. The 

Atlanta VAMC expects to complete testing by March 2017. 

CONCLUSION

Mr. Chairman, I am proud of the health care our facilities provide to our Veterans, including prescription drug services. With support from Congress, we look 

forward to continuing to improve our oversight of controlled substances and drug 

free workplace programs, which will further improve the care our Veterans deserve. 

Thank you for the opportunity to testify before this subcommittee. I look forward 

to your questions. 

f 

Prepared Statement of Nicholas Dahl 

Mr. Chairman, Ranking Member Kuster, and Members of the Subcommittee, 

thank you for the opportunity to testify today on the Office of Inspector General’s 

(OIG) work related to oversight of controlled substances and drug free workplace 

programs at VA facilities. I am accompanied by Emorfia Valkanos, a member of the 

OIG’s Office of Healthcare Inspections staff in Manchester, New Hampshire, who is 

also a pharmacist. 

BACKGROUND 

The Federal Drug-Free Workplace Program was initiated by Executive Order 

12564 in 1986. The Executive Order established the goal of a drug-free Federal 

workplace and made it a condition of employment for all Federal employees to refrain from using illegal drugs on or off duty. The following year, Congress passed 

legislation (P.L. 100–71, Supplemental Appropriations 1987) designed to establish 

uniformity among Federal agencies’ drug testing, confidentiality of drug test results, 

and centralized oversight of the drug testing program. 

Within VA, the Deputy Assistant Secretary for Human Resources Management is 

responsible for the implementation of the Department’s Drug-Free Workplace Program. Drug Program Coordinators at each Veterans Health Administration (VHA) 

facility are responsible for scheduling drug tests each month for randomly selected 

employees. Department-wide, VA randomly selects 285 employees each month 

across its facilities for drug testing-for an annual total of 3,420 employees. 

VA Directive and Handbook 5383, VA Drug-Free Workplace Program, establishes 

policies and procedures for VA’s Drug-Free Workplace Program. The Handbook designates safety-sensitive occupational series as Testing Designated Positions (TDPs), 

such as physicians, nurses, police officers, motor vehicle operators, and Senior Executive Service employees. 

There are several components to VA’s Drug-Free Workplace Program, including: 

• Pre-employment applicant testing of final selectees for TDPs. 

• Random monthly drug testing of employees in TDPs. (Human Resources officials are responsible for properly coding employees in TDPs with the drug test 

code in VA’s personnel information system.) 

• Drug testing of employees when there is reasonable suspicion of on-the-job drug 

use or where drug use is suspected following a workplace accident or injury. 

VA also requires that managers at VHA facilities ensure that a controlled substance inspection program is implemented and maintained. VHA Handbook 1108.02, 

Inspection of Controlled Substances, details requirements for facility controlled substances inspections. 

OIG WORK 

In recent years, the OIG has conducted an audit and a review where we assessed 

aspects of the Drug-Free Workplace Program. The audit included a comprehensive 

assessment of the effectiveness of VA’s Drug-Free Workplace Program. We identified 

program weaknesses and made recommendations to improve the effectiveness of the 

program. The review revealed one medical center did not conduct drug testing for 

a 6 month period. The review also revealed a lack of oversight of the Drug-Free 

Workplace Program, both at a local and national level, in that the 6 month lapse 

in testing was not timely identified. 

Drug-Free Workplace Program 

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1 Audit of VA’s Drug-Free Workplace Program, March 30, 2015. 

In March 2015, we reported VA needed to improve the management of its DrugFree Workplace Program to ensure the program was effective in maintaining a 

workplace that is free from illegal drug use. 1 We identified program weaknesses 

and determined VA’s Program was not accomplishing its primary goal of ensuring 

illegal drug use was eliminated and VA’s workplace was safe. 

Pre-Employment Applicant Drug Test 

We reported that VA’s Office of Human Resources Management (OHRM) did not 

ensure facility Human Resource Management Officers complied with VA’s policy to 

drug test all applicants selected for a TDP prior to appointment. Instead, VA selected about 3 of every 10 applicants selected for a TDP for pre-employment drug 

testing. If a tested applicant has a verified positive test result, VA should decline 

extending a final offer of employment. While VA’s Drug-Free Workplace Program 

Handbook states every individual tentatively selected for employment in a TDP is 

subject to a drug test before appointment, OHRM officials interpreted this language 

as meaning only some finalists for TDPs needed to be drug tested before being appointed. Because of this interpretation, we estimated approximately 15,800 (70 percent) of the nearly 22,600 individuals VA reported appointing into TDPs during fiscal year (FY) 2013 were not drug tested before being hired. 

Employee Random Drug Testing 

We estimated VA achieved a national employee random drug testing rate of 68 

percent of the 3,420 employees selected for random drug testing in FY 2013. Of 22 

randomly selected facilities, we found 4 did not test any randomly selected employees, 10 had compliance rates ranging from 31 to 89 percent, and 8 tested at least 

90 percent of their randomly selected employees. Facility Coordinators could not explain why the majority of the 32 percent of employees were not tested. 

We also estimated at least 19,100 (9 percent) of about 206,000 employees in TDPs 

were not subject to the possibility of random drug testing because they were not 

coded with a Drug Test code, as required, in VA’s personnel information system. 

Those not subjected to random drug testing included physicians, nurses, and addiction therapists. In addition, VA may have incorrectly identified as many as 13,200 

employees with the Drug Test code-meaning, employees in positions that do not usually require random drug testing were subject to testing. We found VA did test nonDTP employees, which reduced the probability that employees in high-risk, safety 

sensitive TDPs were selected for drug testing. 

Reasonable Suspicion Drug Testing 

OHRM lacked sufficient oversight practices to monitor whether facilities referred 

all employees with a positive drug test result to the Employee Assistance Program 

(EAP). VA’s Drug-Free Workplace Program Handbook requires facilities to refer all 

employees with a positive drug test result to its EAP for assessment, counseling, 

and referral for treatment or rehabilitation. However, facility Coordinators reported 

that only 17 of 51 employees who tested positive for drugs as a result of reasonable 

suspicion or after a workplace accident or injury were referred to their facility’s 

EAP. 

We made five recommendations to the Deputy Assistant Secretary for Human Resources Management. These recommendations included: 

• Ensuring all final selectees for TDPs complete pre-employment drug testing 

prior to appointment 

• Increasing accountability to ensure all employees selected for random drug testing are tested 

• Improving the accuracy of Drug Test coding in VA’s personnel information system 

• Implementing procedures to ensure Custody and Control forms are accurately 

completed 

• Ensuring compliance with Program requirements, such as referring employees 

who test positive to the EAP. 

The then Acting Deputy Assistant Secretary concurred with our recommendations 

and provided action plans that were responsive to our recommendations. This included a plan to require mandatory pre-employment drug testing of all candidates 

selected for a TDP. Action in response to four of the five recommendations has been 

completed. VA continues to work on actions to ensure the accuracy of Drug Test coding in its personnel information system. Recently, VA notified us that they continue 

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2 Review of Alleged Human Resources Delays at the Atlanta VAMC, January 30, 2017. 

3 An adjudication is considered backlogged after 90 days without a determination. 

4There was also no monthly random drug tests for current employees in TDPs. 

5 Combined Assessment Program Summary Report - Evaluation of the Controlled Substances 

Inspection Program at Veterans Health Administration Facilities, June 10, 2014. 

to work with their personnel information system business partner to implement this 

recommendation. We will continue to track their progress until we receive documentation that action is complete. 

Human Resources Delays 

In January 2017, we reported on delays in the processing of certain human resources functions at the Atlanta VA Medical Center (VAMC). 2 We conducted our 

work to assess allegations that there was a backlog of unadjudicated background investigations 3 and mandatory drug testing for new hires in TDPs 4 did not occur for 

a period of at least 6 months between 2014 and 2015. We substantiated both allegations. Regarding the allegation that the Atlanta VAMC did not administer the DrugFree Workplace Program for 6 months, we found no drug testing was completed at 

the VAMC from November 2014 through May 2015. This lapse occurred because the 

facility Coordinator left the position in September 2014 and the alternate Coordinator did not assume the collateral duties required of this position. Further, other 

VAMC Human Resources personnel were unaware of the Drug-Free Workplace Program responsibilities. Despite the lack of drug testing for 6 months, we found no 

indications VA management was aware of the lapse. Because no drug testing occurred, the Atlanta VAMC lacked assurance that employees who should have been 

subject to drug testing remained suitable for employment. We made five recommendations in the report: 

• Develop an action plan to ensure staff have appropriate background investigations and determinations are accurately recorded 

• Ensure all suitability adjudicators receive the mandatory training and background investigation required for the position 

• Provide training to all human resources staff on the requirements of the personnel suitability program 

• Ensure human resources staff are trained on the requirements of the Drug-Free 

Workplace Program and the responsibilities of their positions 

• Review the Drug-Free Workplace Program on a regular basis to ensure compliance with regulations and that employees hired during gaps are subject to corrective testing. 

The Atlanta VAMC Director concurred with our recommendations and reported 

that action has been taken with regards to the Drug-Free Workplace Program. 

When we receive documentation of action related to those recommendations, we anticipate closing them. 

Evaluation of the Controlled Substances Inspection Program 

During our past inspections of VHA medical centers through our Combined Assessment Program reviews (CAP Reviews), we analyzed pharmacy operations including environment of care, management of controlled substances, and pharmacy 

security. In 2008, we reported facility managers needed to reinforce compliance with 

VHA policy regarding controlled substances inspections. We conducted another review during our fiscal year 2013 CAP Reviews to include 58 facilities and issued 

a summary of the results in June 2014. 5 The summary report contained 10 recommendations focused on opportunities for improvements: 

• Conducting annual physical security surveys and correcting identified deficiencies 

• Completing controlled substances quarterly trend reports and providing them to 

facility Directors 

• Conducting monthly controlled substances inspections of non-pharmacy areas 

• Completing non-pharmacy controlled substances inspection activities 

• Performing emergency drug cache quarterly controlled substances physical 

counts and monthly verification of seals 

• Validating completion of required drug destruction activities 

• Verifying 10 percent of outpatient pharmacy written prescriptions for Schedule 

II drugs 

• Validating accountability of prescription pads stored in the pharmacy 

• Defining policy for acceptable reasons for missed controlled substances area inspections 

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33 

• Providing annual controlled substances inspectors training. 

VA concurred with the recommendations and reported in December 2014 that action had been taken to address these recommendations. 

Investigative Work 

The OIG conducts criminal investigations regarding drug diversion classified in 

three categories. 

Diversion of Controlled and Non-controlled Substances by VHA Employees 

Diversion by healthcare providers is a serious issue that OIG diligently pursues. 

Not only is it an issue of theft, it is potentially an issue of patient safety if the provider is ingesting controlled substances while on duty, if false entries are placed in 

patient files to cover up the diversion, or if patients are given another substance 

in place of the diverted drug. OIG recently concluded an investigation of drug diversion that resulted in a former Albany, New York, VAMC hospice nurse being sentenced to 82 months’ incarceration and 3 years’ supervised release after pleading 

guilty to tampering with a consumer product and obtaining controlled substances 

by deception and subterfuge. The investigation by the OIG and the Food and Drug 

Administration, Office of Criminal Investigation, revealed the defendant stole 

oxycodone hydrochloride from syringes and replaced the contents with Haldol, an 

anti-psychotic medication. The investigation further revealed the defendant may 

have inflicted pain and suffering on dying hospice patients by diverting their pain 

medications for his own use and replacing it with a drug that was subsequently administered by other nurses. 

Diversion of Controlled and Non-controlled Substances for Illegal Distribution 

VA pharmaceuticals are also diverted or stolen for the purpose of illegal sale. An 

ongoing investigation at the Little Rock, Arkansas, VAMC has led to two pharmacy 

technicians and a pharmacy technician student trainee being indicted for charges 

to include conspiracy, theft, and possession with intent to distribute. The OIG investigation resulted in the defendants being charged with diverting and distributing 

4,000 oxycodone tablets, 3,300 hydrocodone tablets, 308 oz. of promethazine with codeine syrup, and over 14,000 Viagra and Cialis tablets. Three additional VA employees were identified as part of the drug diversion, resulting in a resignation and reassignments. The monetary loss to VA is over $77,000. 

Diversion of Controlled Substances via Theft of Mailed Pharmaceuticals 

Mailed pharmaceuticals are vulnerable to theft at any point in the process. The 

most common occurrence is theft by employees of the mail carrier, either Government or private. This type of diversion results in veterans experiencing delays in 

receiving their medication. A recent VA OIG and UPS Security investigation revealed a defendant stole several VA packages containing oxycodone and morphine 

that were intended for veterans residing in Memphis, Tennessee. During the investigation, the defendant was caught attempting to steal an additional package and 

confessed to the thefts. The (now) former UPS driver was sentenced to time served 

and 3 years’ probation after pleading guilty to theft. 

CONCLUSION 

The OIG has provided cross cutting oversight of the Drug-Free Workplace Program through our audits, inspections, and investigations. This oversight is necessary to ensure that VA takes the necessary steps to reduce risks to the safety and 

well-being of veterans and VA employees by having and following the proper program controls. We also have an active program investigating and having those engaged in drug diversion prosecuted. Without appropriate actions, we concluded VA 

lacked reasonable assurance that it is achieving a drug-free workplace and adequately securing controlled substances. 

Mr. Chairman, this concludes our statement. We would be happy to answer any 

questions that you or other Subcommittee Members may have. 

f 

Prepared Statement of Randall B. Williamson 

Actions Needed to Ensure Medical Facilities’ Controlled Substance 

Programs Meet Requirements 

Chairman Bergman, Ranking Member Kuster, and Members of the Subcommittee: 

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1GAO, VA Health Care: Actions Needed to Ensure Medical Facility Controlled Substance Inspection Programs Meet Agency Requirements, GAO 17 242 (Washington, D.C.: Feb.15, 2017). 2 As described in our report, we reviewed VHA’s controlled substance inspection program policy issued in 2010, which was the most current policy at the time our review. See Department 

of Veterans Affairs, Veterans Health Administration Handbook 1108.02, Inspection of Controlled 

Substances (Washington, D.C., Mar. 31, 2010). VHA issued an update to its policy in November 

2016. See Department of Veterans Affairs, Veterans Health Administration Directive1108.02, 

Inspection of Controlled Substances (Washington, D.C., Nov. 28, 2016). 3GAO, Standards for Internal Control in the Federal Government, GAO 14 704G (Washington, D.C.: Sept. 10, 2014). GAO, Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: Nov. 1, 1999). Internal control is a process effected by 

an entity’s management, oversight body, and other personnel that provides reasonable assurance that the objectives of an entity will be achieved. 

I am pleased to be here today to discuss our recent report on the controlled substance inspection programs at medical facilities run by the Department of Veterans 

Affairs (VA). 1 The Veterans Health Administration (VHA), which operates VA’s 

health care system, requires that each of its medical facilities with stocks of controlled substances implement an inspection program to help reduce the risk of employees diverting for their own personal use controlled substances intended for veterans. Diversion of controlled substances such as opioid pain relievers can occur 

anywhere in a facility where employees have access to controlled substances, and 

this diversion can pose a risk to veterans-for example, by depriving them of needed 

medications. Without effective practices to reduce the risk of diversion by employees 

and to quickly identify it, diversion can remain undetected. 

Under its controlled substance inspection program, VHA requires medical facilities to conduct monthly inspections following specified procedures outlined in VHA’s 

inspection program policy. These inspections must be performed in all facility areas 

that are authorized to have controlled substances-including pharmacies and patient 

care areas such as operating and emergency rooms. 2 At each medical facility, the 

facility’s director is primarily responsible for overseeing the inspection program and 

ensuring that the facility’s program adheres to VHA’s requirements. The facility director must appoint a coordinator to manage the controlled substance inspection 

program and the inspectors who conduct the inspections. The coordinator is responsible for ensuring that the inspections are conducted each month and submitting reports summarizing the results from the monthly inspections and trends to the facility director. The Veterans Integrated Service Network (network) that oversees the 

facility is responsible for reviewing the inspection program trend reports annually. 

My testimony today summarizes the findings from our report analyzing the implementation and oversight of controlled substance inspection programs at select VA 

medical facilities. Accordingly, this testimony addresses: 

1.the extent to which selected VA medical facilities have implemented controlled 

substance inspection programs as required by VHA policies, and 

2.VHA’s oversight of these programs at selected VA medical facilities. 

In our report, we recommend several key actions that VA should take to ensure 

that the facilities’ inspection programs meet VHA’s requirements, and my testimony 

summarizes these recommendations and VA’s response to them. 

To conduct our work, we reviewed VHA policies and interviewed officials from 1) 

VHA Central Office, 2) a nongeneralizable selection of four VA medical facilities, 

and 3) the four networks that oversee these facilities. We selected the four facilities 

to achieve variation in geography and in the number of prescriptions for opioid pain 

relievers dispensed in the states in which the facilities operate. The four VA medical 

facilities we selected are located in Washington, D.C.; Milwaukee, Wisconsin; Memphis, Tennessee; and Seattle, Washington. We compared the number of controlled 

substance inspections that officials from each of the four VA medical facilities reported to us as having been completed from January 2015 through February 2016 

to the number of inspections that should have been conducted, based on VHA’s policy requirements. We reviewed the inspection procedures in place at each of the four 

facilities as described in the facilities’ inspection program policies and other guidance documents, and we compared these procedures to VHA’s policy requirements. 

We also reviewed the monthly and quarterly inspection reports for each of the four 

selected facilities during our review period and analyzed the contents of VHA’s online training courses for coordinators and inspectors. We compared the implementation and oversight of the facilities’ controlled substance inspection programs to 

VHA’s policy requirements and to federal standards for internal control related to 

control activities, monitoring, and oversight. 3 Further details on our scope and 

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4See GAO 17 242. 

5 VHA’s inspection program policy requires that facilities inspect patient care areas and pharmacies on a monthly basis using specific procedures. 6 A team of inspectors is assigned from various areas of the medical facility. 7 Automated dispensing machines are computerized drug storage and dispensing medication 

cabinets. 8The VA Office of the Inspector General also found in 2009-and again in 2014-that VA medical facilities did not always conduct required inspections or follow VHA’s required procedures. 

For example, see VA Office of the Inspector General, Combined Assessment Program Summary 

Report: Evaluation of the Controlled Substances Inspection Program at Veterans Health Administration Facilities (Washington, D.C.: June 10, 2014). 

methodology are included in our report. 4 The work this statement is based on was 

performed in accordance with generally accepted government auditing standards. 

Selected VA Medical Facilities Did Not Conduct All Monthly Inspections or 

Follow All Required VHA Inspection Procedures 

We found that from January 2015 through February 2016, one of the four selected 

facilities we reviewed missed 43 percent of the required monthly inspections, and 

another facility missed 17 percent of these inspections. Further, at both facilities, 

most of the missed inspections were for patient care areas such as the operating 

rooms. 5 At one of the two facilities, inspectors had missed all 14 inspections of the 

facility’s operating rooms during our 14-month review period. The facility’s coordinator told us that the operating rooms were not inspected during this time because 

the assigned inspectors needed to arrive before or after normal operating room 

hours to obtain access to the controlled substances and were unable to conduct the 

inspections due to their conflicting work schedules. 6 As a result of missed inspections in the operating rooms and other patient care areas, these medical facilities 

lack reasonable assurance that their physical inventory of controlled substances 

matches the recorded inventory, thereby increasing the risk that controlled substances could be stolen. Further, their ability to protect veterans from the harm that 

can result from diversion, such as depriving them of needed pain medications, is 

limited. The other two VA medical facilities we reviewed fully adhered to VHA’s requirement to conduct monthly inspections in their patient care areas and pharmacies. 

We also found that three of the four selected VA medical facilities, when conducting inspections, did not include, or correctly follow, three or more of the nine 

VHA inspection requirements we reviewed. The fourth facility we reviewed had implemented inspection procedures that followed these nine requirements. For example, inspectors at two facilities did not verify that controlled substances had been 

properly transferred from their facility pharmacies to the automated dispensing machines in patient care areas. 7 VHA requires inspectors to verify that all controlled 

substances transferred by a pharmacy on a selected day were received in patient 

care areas such as the operating room. However, at one facility, inspectors told us 

that they did not conduct this required procedure in one of the facility’s two pharmacies. At another facility, inspectors verified only a sample of controlled substances dispensed by the pharmacy to confirm that the substances were actually 

transferred. Without checking that all controlled substances were properly transferred, inspectors may not identify controlled substances that are dispensed by the 

pharmacy and subsequently diverted rather than stocked in the automated dispensing machines located in patient care areas. 8

We found that several factors contributed to the missed inspections and incorrect 

implementation of inspection procedures that we identified. 

First, the two VA medical facilities that missed inspections lacked an additional 

control procedure, such as designating an alternate coordinator or appointing additional inspectors, to help prevent missed inspections when the assigned inspectors 

could not conduct them. Both of the facilities that conducted all of the required 

monthly inspections had an alternate coordinator to assist the coordinator in managing the inspection program, including scheduling the inspections and following up 

with inspectors to ensure inspections are completed. In addition, the alternate coordinator at one of these facilities conducted inspections when inspectors had unforeseen circumstances that prevented them from completing the assigned inspections. 

In contrast, the two medical facilities that missed inspections did not have an additional control procedure, such as the use of an alternate coordinator. Without coordinators ensuring that the monthly inspections are conducted, VA medical facilities 

lack assurance that the inspection programs are meeting the objective to reduce the 

risk of diversion of controlled substances. 

Second, three of the four VA medical facilities in our review did not have written 

inspection procedures that were fully consistent with VHA’s policy requirements. 

Leonard.horne on VACREP0180 with DISTILLER

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This likely contributed to their inspections not following certain VHA policy requirements. (See figure 1.) 

Note: At the four selected Department of Veterans Affairs (VA) medical facilities, 

we reviewed written inspection procedures that were included in the local inspection 

program policies, training manuals and other guidance documents and compared 

them to the Veterans Health Administration’s (VHA) inspection program requirements included in VHA’s 2010 policy. See Department of Veterans Affairs, Veterans 

Health Administration Handbook 1108.02, Inspection of Controlled Substances 

(Washington, D.C.: Mar. 31, 2010). 

aVA medical facility C had no written procedures for its pharmacy inspections. Although this VA medical facility’s inspection program policy stated that inspections 

must follow the required procedures included in VHA’s Handbook 1108.02, this 

handbook was not included in the guidance that inspectors told us they used in performing and implementing the inspection procedures. 

The one VA medical facility that had written inspection procedures that were consistent with VHA’s policy requirements has an ongoing process to conduct comprehensive reviews of its procedures. At this facility, the coordinators had conducted 

separate reviews of the facility’s procedures in coordination with two pharmacy 

managers, according to a facility official. In contrast, at the other three selected VA 

medical facilities, the coordinators’ reviews of the facilities’ procedures were not as 

comprehensive. For example, the coordinator at one facility told us he had compared 

the facility’s procedures to the VHA requirements but did not involve other facility 

officials to verify the accuracy of his review. 

Third, while VHA relies on coordinators to ensure that the inspections are conducted correctly, we found that VHA’s training course for coordinators lacks substantive information about VHA’s required inspection procedures. VHA’s training 

course for inspectors, in comparison, includes substantive information about the required inspection procedures. While two of the four coordinators we interviewed told 

us they were provided helpful on-the-job training at their medical facilities, which 

included shadowing the prior coordinator, three of them told us that additional coordinator training was needed. 

In our report we noted that missed inspections and gaps in facilities’ local inspection procedures and coordinator training are inconsistent with federal internal control standards, which state that management should periodically review their procedures for effectiveness and provide proper training to achieve results. We concluded 

that missed inspections and gaps in inspection procedures and training could significantly limit VHA’s ability to reduce the risk of diversion of controlled substances. 

To address these shortcomings, we recommended that VA ensure that VA medical 

facilities establish an additional control procedure, such as an alternate coordinator, 

to help prevent missed inspections as well as a process in which coordinators and 

other stakeholders compare facility inspection procedures to VHA’s policy requirements and modify facility procedures, as appropriate. We also recommended that VA 

improve its coordinator training by ensuring that the training includes the inspecLeonard.horne on VACREP0180 with DISTILLER


Insert offset folio 1 here 29370.001
37 

9 VHA included this network requirement in a 2014 memo that it issued in response to the 

VA Office of the Inspector General findings on weaknesses in the inspection programs. See VA, 

Memorandum on Controlled Substance Inspection Program Requirement, VA Office of Inspector 

General-Combined Assessment Program Findings (Washington, D.C.: July 9, 2014). 

tion procedures that VHA requires. VA agreed with these recommendations and 

said it plans to take steps to implement them by October 2017. 

Oversight of Controlled Substance Inspection Programs by Selected VA 

Medical Facilities and Networks Is Inconsistent 

We found inconsistent oversight of the controlled substance inspection programs 

at selected VA medical facilities by facility directors and by the networks to which 

the facilities report. Directors at two of the four facilities had not implemented corrective actions to address missed inspections identified by coordinators in the 

monthly inspection reports that the directors had reviewed. In addition, one of four 

facility directors did not receive quarterly trend reports during our review period as 

required by VHA policy and did not implement a corrective action to ensure that 

he receives future reports. Further, we found that two of the four networks did not 

review their facilities’ quarterly trend reports as required by VHA policy. Officials 

at one of these two networks told us that they were unaware of the requirement, 

while an official in the other network told us the officials responsible for reviewing 

the reports did not realize it was a requirement. 9 One network that had reviewed 

the quarterly trend reports did not follow up with a facility in our review to ensure 

that the coordinator had submitted missed trend reports to the facility’s director. 

We also found that this coordinator had not completed other quarterly trend reports, 

and the facility’s director did not develop a corrective action plan to ensure the completion of these reports in the future. 

In our report, we pointed out that the inconsistent oversight by the directors and 

networks is contrary to federal internal control standards, which call for oversight 

to be ongoing to assess performance, promptly remediate deficiencies, and hold individuals accountable for their responsibilities. We concluded in our report that without ongoing monitoring by facility directors and networks-including holding facilities 

accountable for correcting nonadherence to program requirements-VHA lacks reasonable assurance that facilities will correct deficiencies on a timely basis. To address these oversight problems, we recommended that VA ensure that medical facility directors have a process in place to document and correct nonadherence with 

program requirements. We also recommended that VA ensure that the networks review their facilities’ quarterly trend reports and ensure that facilities take corrective 

actions when program nonadherence is identified. VA agreed with our recommendations and said it plans to take steps to implement them by October 2017. 

Chairman Bergman, Ranking Member Kuster, and Members of the Subcommittee, 

this concludes my statement. I would be pleased to respond to any questions that 

you may have at this time. 

GAO Contacts & Staff Acknowledgments 

If you or your staff members have any questions concerning this testimony, please 

contact me at (202) 512–7114 (williamsonr@gao.gov). Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last page of this 

statement. Other individuals who made key contributions to this testimony include 

Marcia A. Mann, Assistant Director; Pamela Dooley (Analyst-in-Charge); Krister 

Friday; and Carmen Rivera-Lowitt. 

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f 

Prepared Statement of Keith H. Berge, M.D. 

Chairman Bergman, Ranking Member Kuster, and Members of the Committee, 

Thank you for the opportunity to speak with you today about drug diversion from 

the health care workplace. Such diversion is a crime that endangers all patients, 

health care employers, coworkers, and even endangers the diverters themselves. 

While we have long known of these hazards of patients being deprived of pain medicine by diversion, only fairly recently has the grave risk to extremely vulnerable patients been revealed by outbreaks of diseases such as blood poisoning by bacteria 

or viruses that have been transmitted by drug diverters swapping syringes in the 

commission of their crimes. In the process, many patients have been infected with 

potentially fatal illnesses. I have attached for your review a paper authored by CDC 

investigators outlining 6 such outbreaks over a 10 year period that resulted in illness and death in patients. One of the diversion/infection scenarios included Veteran’s Affairs patients being exposed to a diverter that communicated his Hepatitis 

C infection to approximately 5O patients. This diverter was radiation technologist 

who traveled the country working for multiple employment agencies. He had been 

fired from multiple jobs for diverting fentanyl for his own use, but by simply lying 

about previous terminations on job applications, and in the absence of a national 

registry of radiation technologists, he had no trouble finding employment. In the 

darkened invasive radiology suites he would swap the fentanyl syringe on the anesthesia cart with one he has previously used to inject himself. He would then excuse 

himself to a restroom, inject himself with the stolen fentanyl, draw up tap-water, 

and repeat the process with the next patient’s fentanyl. In this manner, he conveyed 

his potentially lethal illness to many innocent victims. The 8 patients described in 

these outbreaks were all in extremely vulnerable positions, either undergoing an 

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1 United States Government Accountability Office, Actions Needed to Ensure Medical Facility 

Controlled Substance Inspection Programs Meet Agency Requirements, February 2017, Available at: http://www.gao.gov/assets/690/682804.pdf 

invasive procedure while under anesthesia, or in an Intensive Care Unit. Clearly, 

such behavior is unacceptable, and in recognition of these dangers posed by diversion the Drug Enforcement Administration requires stringent drug control policies 

and procedures to be put in place to protect controlled substances from attack across 

all points of the manufacturing, distribution, dispensing, administration and disposal spectrum. The drugs used in the healthcare setting are highly sought after 

drugs of abuse, both by addicts and by those who would profit richly by the sale 

of stolen drugs. 

Experience at the Mayo Clinic and elsewhere has shown the necessity of having 

robust surveillance, detection, investigation, and intervention programs in place in 

order to minimize the risk to all involved. While it will be impossible to completely 

eliminate drug diversion from the healthcare workplace, it is imperative that robust 

systems rapidly detect and halt such activity. I have attached for your review an 

article from Mayo Clinic authors, myself included, which outlines our program from 

its inception to very successful implementation. While we continue to try to improve 

our system, it has proven quite effective in identifying a host of drug diverters since 

implementation 7 years ago. Diverters come from diverse backgrounds, and include 

physicians, pharmacists, pharmacy techs, nurses, nursing students, nursing assistants, janitors, patients, patient’s family members, nursing home attendants, hospice 

workers, and strangers off the street. The stories are incredible, but they all point 

to the powerful draw that these drugs have over addicts. As such, it is not good 

enough to merely have effective policies and procedures on the books; they must actually be rigorously followed. Diverters are generally clever and desperate, and they 

will gravitate into the area of a system where they perceive the drugs to be most 

vulnerable to attack. It therefore behooves any healthcare facility to have a reputation for being effective at rapidly identifying, terminating, and prosecuting drug diversion and drug diverters. Only by doing so can we protect the most vulnerable 

of our patients from preventable harm. As I’ve stated, this problem will never go 

away, so we must become very good at rapid intervention. Only by instituting and 

following effective anti-diversion policies and procedures will this be possible. 

I thank the Committee for its attention to this important issue, and stand ready 

to answer any questions you may have. 

Keith H. Berge, M.D. 

Consultant, Anesthesia & Perioperative Medicine 

Chair, Medication Diversion Prevention Subcommittee 

f 

Statements For The Record 

AMERICAN SOCIETY OF ANESTHESIOLOGISTS 

Jeffrey Plagenhoef, M.D., President, American Society of Anesthesiologists 

On behalf of more than 52,000 members, the American Society of Anesthesiologists r (ASA) would like to thank Chairman Bergman, Ranking Member Kuster 

and members of the Subcommittee for holding the hearing, ‘‘Assessing VA’s Risks 

for Drug Diversion,’’ and providing ASA the opportunity to submit a Statement for 

the Record. We greatly appreciate your willingness to discuss this important topic 

and how it impacts our nation’s Veterans. Physician anesthesiologists are health 

care professionals who manage and administer a large number of controlled substances in their roles as perioperative physicians, and are pain medicine specialists, 

diagnosing and treating patients with complex pain conditions. As leaders in patient 

safety, anesthesiologists thereby are uniquely positioned to address this issue. ASA 

believes prevention of, and education about, drug diversion activities are critical. We 

look forward to working with the Committee and others on a multidisciplinary approach to minimize the potential for drug diversion and ensure patients in the Department of Veteran Affairs continue to receive high-quality care. 

It is no secret that the potential for drug diversion by clinicians, staff, patients, 

family members and others is a real threat at any hospital, surgery center, nursing 

home, pharmacy or other care organizations. News media and internal reviews, such 

as the February 2017 GAO report on controlled substance inspection programs, 1

have played an important role in revealing some of these instances where health 

care professionals have diverted drugs for their own use, and in some cases, the paLeonard.horne on VACREP0180 with DISTILLER

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2The TEDS Report, Substance Abuse Treatment Admissions Involving Abuse of Pain Relievers: 1998 and 2008, July 15, 2001. Available at: https://www.dea.gov/divisions/dal/2010/ 

dallas071610.pdf?utm—source=ABCeAlert&utm— 

campaign=Hospital%20Drug%20Diversion%20Prevention&utm—content=2–20–17 3SUD Curriculum, ASA Committee on Occupational Health, Tetzlaff, John, November 12, 

2015, Available here: https://www.asahq.org//media/sites/asahq/files/public/resources/ 

asa%20committees/substance-use-disorder-model-curriculum-42216.pdf?la=en 4Drug Enforcement Agency, FY 2016 Budget and Performance Summary, Available here: 

https://www.justice.gov/sites/default/files/jmd/pages/attachments/2015/01/30/28—bs—section— 

ii—chapter—-—dea.pdf 

tient fatalities that have been the result. Moreover, a report by the Substance Abuse 

and Mental Health Services Administration (SAMHSA) illustrates that drug diversion contributed to a fourfold increase in substance abuse treatment admissions between 1998 and 2008 among individuals aged 12 and older. 2 It is also widely known 

that certain healthcare specialties, such as anesthesiology, are associated with increased risk for abuse of and dependency on certain classes of drugs. For this reason, ASA feels strongly about identifying and adopting strategies that lead to successful drug diversion deterrence programs. As a result, ASA’s Committee on Occupation Health has created a model curriculum on substance use and disorder. This 

curriculum identifies the problem of drug diversion and addiction, specifically in the 

occupation of anesthesiology, detection, re-entry into the occupation, as well as prevention. 3

As the Committee is aware, there are institutions that already implement successful drug diversion deterrence programs. In fact, some of these programs have been 

highlighted in testimony for this hearing. In addition, the Centers for Medicare & 

Medicaid Services (CMS) has resources describing the role of practitioners in preventing drug diversion. 

Furthermore, Congress and Federal agencies have taken important steps to curb 

opioid abuse and misuse. For example, during the 114th session, Congress passed 

the Comprehensive Addiction and Recovery Act (CARA), which included ASA-supported provisions to expand access to naloxone; allow patients to partially fill prescriptions for controlled substances; reauthorize NASPER, a public health grant program for prescription drug monitoring programs; and enable National Institutes for 

Health (NIH) to intensify pain research. Additionally, the Centers for Disease Control and Prevention (CDC) issued the Guideline for Prescribing Opioids for Chronic 

Pain, which ASA collaborated with the agency to develop. 

There has been a heightened focus by regulators to tighten prescription requirements and work to change prescribing practices in response to the opioid epidemic. 

ASA is a long-time proponent of the use of multimodal, multidisciplinary pain management strategies including interventional techniques that will decrease reliance 

on opioids for chronic pain. While efforts to address the opioid epidemic are underway, there is a growing need to address drug diversion. ASA believes it is important 

to consider these alternative treatments as not only a method of decreasing patient 

reliance on opioids, but to also reduce the incidence of drug diversion. 

The Drug Enforcement Agency (DEA) is heightening its scrutiny of healthcare organizations. As evidenced DEA’s FY 2016 Performance Budget, there was a 9% increase in the budget devoted to Diversion Control. 4 It is no surprise that hospitals, 

surgery centers, nursing homes, pharmacies and other organizations will be held accountable for a lack of oversight and diligence when diversion occurs. Therefore, it 

would be prudent for health care providers, including anesthesiologists, to take preemptive steps to mitigate risks. 

As previously mentioned, there are already institutions implementing successful 

drug diversion deterrence programs and a lot to be learned from the information 

that already exists. ASA believes that training and education are integral to successful drug diversion deterrence programs. ASA recommends that all employees be 

educated on how to identify, detect and report potential drug diversion. It is also 

important that they are able to do this anonymously, either through a telephone 

hotline or other immediate method. A limited number of health care professionals 

should also be properly trained on the use of automated dispensing units, with the 

caution that overreliance on these units can create a false sense of security. 

Multimodal pain management techniques should be considered and employed whenever possible in order to reduce reliance on opioids. Additionally, policies and procedures should be developed with respect to waste/destruction of controlled substances 

and segregation of duties, including the ordering, receipt, inventory, storage, and 

stocking of controlled substances in different locations. It is also advisable to frequently review drug management data, including investigating and reviewing discrepancies on a timely basis and conducting ‘unscheduled’ reviews. 

Leonard.horne on VACREP0180 with DISTILLER

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ASA believes it is important to proactively take steps to mitigate the risk of drug 

diversion. Having procedures in place that inform every employee of the importance 

of preventing drug diversion, including disciplinary actions, can reduce risks. Even 

with certain safeguards in place, institutions are vulnerable. Therefore, it is important to work closely with and in cooperation with law enforcement, including local 

police and the DEA. 

ASA thanks the Committee for the opportunity to submit this Statement for the 

Record and would like to offer our members as a resource to the Committee, and 

also to emphasize our willingness to work with you and the Department of Veterans 

Affairs to address the issue of drug diversion. 

Sincerely, 

Jeffrey S. Plagenhoef, M.D. 

President 

American Society of Anesthesiologists 

f 

VA OIG QFR RESPONSE 

March 24, 2017 

The Honorable Jack Bergman 

Chairman 

Subcommittee on Oversight and Investigations 

Committee on Veterans’ Affairs 

U.S. House of Representatives Washington, DC 20151 

Dear Mr. Chairman: 

At the February 27, 2017 hearing before the Subcommittee, Mr. Nick Dahl, Deputy Assistant Inspector General for Audits and Evaluations, was asked a question 

regarding a recent Office of Inspector General (OIG) report, Review of Alleged 

Human Resources Delays at the Atlanta VA Medical Center, that he replied to that 

he would provide the information for the record. 

The question was from Congressman Mike Bost dealing with the number of background checks that were not completed at the Atlanta VA Medical Center (VAMC) 

for positions that were high-risk or testing designated positons. The Atlanta VA 

Medical Center did not maintain adequate records for us to identify the number individuals who had not completed the background investigation process during our 

audit work. On February 3, 2017, we requested additional information on the status 

of the reviews. In a response dated February 22, 2017, the Atlanta VAMC Director 

advised that they determined that 863 background investigations needed to be adjudicated. This number varies from the original reported backlog of 200 due to a severe lack of documentation and subsequent discovery that Human Resource personnel performing the background adjudication checks during this timeframe did 

not have the necessary training or the minimal background level. 

We request that this letter be included in the hearing record. Thank you for your 

interest in the OIG. 

Sincerely, 

/s/ 

MICHAEL J. MISSAL 

Copy to: The Honorable Mike Bost 

Æ 

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