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94–463 PDF 2016

S. HRG. 114–299 

GAO’S HIGH-RISK LIST AND THE 

VETERANS HEALTH ADMINISTRATION 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

APRIL 29, 2015 

Printed for the use of the Committee on Veterans’ Affairs 

( 

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

(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

JOHNNY ISAKSON, Georgia, Chairman 

JERRY MORAN, Kansas 

JOHN BOOZMAN, Arkansas 

DEAN HELLER, Nevada 

BILL CASSIDY, Louisiana 

MIKE ROUNDS, South Dakota 

THOM TILLIS, North Carolina 

DAN SULLIVAN, Alaska 

RICHARD BLUMENTHAL, Connecticut, Ranking 

Member 

PATTY MURRAY, Washington 

BERNARD SANDERS, (I) Vermont 

SHERROD BROWN, Ohio 

JON TESTER, Montana 

MAZIE K. HIRONO, Hawaii 

JOE MANCHIN III, West Virginia 

TOM BOWMAN, Staff Director 

JOHN KRUSE, Democratic Staff Director 

(III) 

C O N T E N T S 

APRIL 29, 2015 

SENATORS 

Page 

Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia ............................ 1 

Blumenthal, Hon. Richard, Ranking Member, U.S. Senator from Connecticut ... 2 

Hirono, Hon. Mazie, U.S. Senator from Hawaii .................................................... 44 

Sullivan, Hon. Dan, U.S. Senator from Alaska ..................................................... 46 

Manchin, Hon. Joe, U.S. Senator from West Virginia .......................................... 48 

Tillis, Hon. Thom, U.S. Senator from North Carolina .......................................... 51 

Tester, Hon. Jon, U.S. Senator from Montana ...................................................... 54 

Rounds, Hon. Mike, U.S. Senator from South Dakota ......................................... 56 

Boozman, Hon. John, U.S. Senator from Arkansas .............................................. 58 

WITNESSES 

Draper, Debra A., Ph.D., Director, Health Care, U.S. Government Accountability Office ......................................................................................................... 3 

Prepared statement .......................................................................................... 5 

Response to posthearing questions submitted by: 

Hon. Johnny Isakson .................................................................................... 63 

Hon. Dan Sullivan ........................................................................................ 64 

Daigh, John D., Jr., M.D., C.P.A., Assistant Inspector General, Office of 

Healthcare Inspections, Office of Inspector General, U.S. Department of 

Veterans Affairs; accompanied by Gary Abe, Deputy Assistant Inspector 

General for Audits and Evaluations, Office of Inspector General .................... 23 

Prepared statement .......................................................................................... 24 

Interim report on the Phoenix inspection ....................................................... 40 

Clancy, Carolyn M., M.D., Interim Under Secretary for Health, Veterans 

Health Administration, U.S. Department of Veterans Affairs; accompanied 

by Stephen W. Warren, Executive in Charge and Chief Information Officer, 

Office of Information Technology ........................................................................ 32 

Prepared statement .......................................................................................... 34 

Response to posthearing questions submitted by: 

Hon. Richard Blumenthal ............................................................................ 65 

Hon. John Boozman ...................................................................................... 66 

Hon. Dan Sullivan ........................................................................................ 66 

(1) 

GAO’S HIGH-RISK LIST AND THE 

VETERANS HEALTH ADMINISTRATION 

WEDNESDAY, APRIL 29, 2015 

U.S. SENATE, COMMITTEE ON VETERANS’ AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 2:35 p.m., in room 

418, Russell Senate Office Building, Hon. Johnny Isakson, Chairman of the Committee, presiding. 

Present: Senators Isakson, Boozman, Rounds, Tillis, Sullivan, 

Blumenthal, Brown, Tester, Hirono, and Manchin. 

OPENING STATEMENT OF HON. JOHNNY ISAKSON, CHAIRMAN, 

U.S. SENATOR FROM GEORGIA 

Chairman ISAKSON. I call this hearing of the Senate Veterans’ 

Affairs Committee to order. 

We appreciate our witnesses being here today. We are here to 

talk about the GAO’s High-Risk List, something the VA enjoys a 

prestigious place on in many areas. I appreciate the testimony we 

are about to hear. I read a lot of the testimony last night before 

the hearing today and I think this will be a meaningful and important hearing. 

As of April 1, 2015, more than 100, approximately 68 percent, of 

GAO’s recommendations are still open, and 40 percent of the recommendations are more than 3 years old. These are VA recommendations. GAO meets regularly with the VA to discuss what 

is needed to get off of the list. It should not take a public scolding 

like a hearing of this type for the VA to implement both GAO and 

IG recommendations. 

It is unclear from VA’s testimony if they even understand the importance of being on the list or off the list, for that matter. Nowhere in VA’s testimony do they address the specific concerns 

raised over the years by GAO or the IG. The testimony only outlines the programs VA has said it put in place for a long time. If 

those programs had worked, VHA would not have been placed on 

the list to begin with. VA should not simply focus on the number 

of recommendations they can close. They should focus on all the 

recommendations. Much like the scandal that erupted in Phoenix 

this time of year, the problem was not isolated to Phoenix but it 

was systemic in nature. 

Historically, the government as a whole performs very poorly in 

the area of information technology and VA is no exception. Federal 

IT has been the area of concern for GAO. Protecting our veterans’ 

personal health care information is a fundamental trust of the VA, 

2 

yet it continues to be a security issue, most recently highlighted by 

the IG, whose report and testimony today, I might add, is outstanding. Allowing contractors to access VA’s network from foreign 

countries, particularly China, raises enormous red flags. The IG’s 

testimony outlines the fact that the VA has over six thousand—six 

thousand—outstanding systems security risks that have not been 

remediated. 

It is time we raised the visibility of this problem to a public hearing, and I am delighted to turn it over to Ranking Member Richard 

Blumenthal. 

OPENING STATEMENT OF HON. RICHARD BLUMENTHAL, 

RANKING MEMBER, U.S. SENATOR FROM CONNECTICUT 

Senator BLUMENTHAL. Thanks, Mr. Chairman, and thank you 

once again for your leadership on these issues we have found in the 

VA. 

This week, I received an update from the GAO on the VA’s 

progress in addressing some of the recommendations since the announcement of VHA’s inclusion on the High-Risk List. I also understand that the VA and GAO are meeting periodically in an effort 

to address some of the outstanding recommendations. These recommendations deal with deep seated, systematic problems in Veterans Health Administration, including inadequate oversight and 

accountability, ambiguous policies and inconsistent processes, information technology challenges, inadequate training for VA staff, and 

unclear resource needs and allocation priorities. 

The services that you provide are to people who are accustomed 

to a chain of command and to people being held accountable in that 

chain of command. When someone fails to do his or her job, they 

are fired. I would like to see the same accountability in the VA and 

in the Federal Government that we see in the United States military most of the time—not all of the time, but at least where men’s 

and women’s lives are at stake. They are in our health care system 

every bit as they are in combat. I would like to see the same expectation of accountability, and I hope that the GAO’s report and its 

list will indicate that the time for accountability is now. 

I share the Chairman’s concerns and I expect a very productive 

and informative hearing today. Thank you. 

Chairman ISAKSON. Thank you, Senator Blumenthal. 

We will go directly to our testimony. I welcome Senator Brown 

to our hearing today. Thank you for being here. 

We have three witnesses to testify, Debra Draper, Ph.D., Doctor, 

Director of Health Care Team, the Government Accountability Office; John Daigh, Doctor, Assistant Inspector General for 

Healthcare Inspections, Office of the Inspector General, and Mr. 

Gary Abe, Deputy Assistant Inspector General for Audits and Evaluations, Office of Inspector General; and we all know Carolyn 

Clancy, Dr. Carolyn Clancy, Interim Under Secretary for Health, 

Department of Veterans Affairs, accompanied by Stephen Warren, 

the Executive in Charge for the Office of Information Technology 

and the Chief Information Officer. 

We will begin with Dr. Draper. 

3 

STATEMENT OF DEBRA A. DRAPER, Ph.D., DIRECTOR, HEALTH 

CARE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. DRAPER. Chairman Isakson, Ranking Member Blumenthal, 

and Members of the Committee, I appreciate the opportunity to be 

here today to discuss the addition of veterans’ health care to GAO’s 

High-Risk List for the first time in 2015. 

Since 1990, GAO has regularly reported on government operations that we have identified as high risk due to their vulnerability to fraud, waste, abuse, and mismanagement, or the need for 

transformation to address economic, efficiency, or effectiveness 

challenges. In my testimony today, I will address the specific areas 

of concern that led to VA health care being added to GAO’s HighRisk List and actions needed for its removal. 

In designating VA health care as high risk, we categorize our 

specific concerns into five broad areas. The first area of concern is 

VA’s ambiguous policies and inconsistent processes. This has led to 

inconsistencies in how facilities interpret policies and carry out 

processes at the local level. In 2012, for example, we reported that 

unclear policies led staff at VA facilities to inaccurately record the 

required days for outpatient medical appointments and to inconsistently track new patients waiting for medical care. 

The second area of concerns is inadequate oversight and accountability. Specifically, we found that certain aspects of facilities implementation of VA policies are not routinely assessed, oversight 

activities are often impeded by VA’s reliance on facilities’ self-reported data, and oversight activities are not always sufficiently focused on compliance with requirements. The facilities’ self-reported 

data lack independent validation and often are inaccurate or incomplete. 

The third area of concern is VA’s information technology challenges. In various reports, we identified extensive limitations in the 

capacity of existing technology systems, information technology systems, including systems that are outdated and inefficient. For example, we have reported on VA’s failed attempts to modernize its 

appointment scheduling system, which is prone to user error and 

manipulation. 

The fourth area of concern is inadequate staff training. In a 

number of reports, we identified gaps in VA training that places 

the quality and safety of veterans’ health at risk. For example, in 

our October 2014 report on VA’s implementation of its new nurse 

staffing methodology, staff reported that the training was time consuming to complete and difficult to understand. They also said it 

was difficult finding the time to complete the training while also 

carrying out their patient care responsibilities. 

The fifth area of concern is unclear resource needs and allocation 

priorities. In various reports, we discussed gaps in the data VA 

needs to efficiently identify resource needs and ensure that resources are effectively allocated across its health care system. In 

May 2013, for example, we reported that VA lacked critical data 

needed to efficiently assess whether the use of non-VA providers 

was more cost effective than augmenting its own capacity to deliver 

some services. 

VA has taken actions to address some of our recommendations 

related to its health care system, including those related to the five 

4 

broad areas of concern just discussed. However, there are more 

than 100 recommendations that have yet to be fully resolved. 

It is critical that VA leaders act on the findings of its Office of 

the Inspector General, GAO, and others to develop and implement 

solutions that mitigate risk for the timeliness, cost effectiveness, 

quality, and safety of veterans’ health care. The Veterans Access, 

Choice, and Accountability Act included a number of provisions intended to help VA address systemic weaknesses. Effective implementation, coupled with sustained Congressional intention, will 

help ensure that VA continues to make progress in improving veterans’ health care. 

We plan to continue monitoring VA’s efforts to improve its health 

care system. We currently have work underway focusing on areas 

such as veterans’ access to primary care and mental health care 

services, primary care productivity, non-VA care, and mechanisms 

VA uses to monitor quality of care. 

An assessment of the status of VA health care’s high-risk designation will be done during our next update in 2017 using the five 

criteria for removal from the High-Risk List. These include leadership commitment, capacity, development of an action plan, monitoring, and demonstrated progress. 

Mr. Chairman, this concludes my opening remarks. I am happy 

to answer any questions. 

[The prepared statement of Ms. Draper follows:] 

5 

PREPARED STATEMENT OF DEBRA A. DRAPER, PH.D., DIRECTOR, HEALTH CARE, 

U.S. GOVERNMENT ACCOUNTABILITY OFFICE


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Chairman ISAKSON. Thank you, Dr. Draper. 

Dr. Daigh. 

STATEMENT OF JOHN D. DAIGH, JR., M.D., C.P.A., ASSISTANT 

INSPECTOR GENERAL, OFFICE OF HEALTHCARE INSPECTIONS, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT 

OF VETERANS AFFAIRS; ACCOMPANIED BY GARY ABE, DEPUTY ASSISTANT INSPECTOR GENERAL FOR AUDITS AND 

EVALUATIONS, OFFICE OF INSPECTOR GENERAL 

Dr. DAIGH. Chairman Isakson, Ranking Member Blumenthal, 

Members of the Committee, I am honored to attend this hearing. 


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24 

1 Healthcare Inspection—Radiology Scheduling and Other Administrative Issues, Phoenix VA 

Health Care System, Phoenix, Arizona, February 26, 2015; Interim Report—Review of Phoenix 

VA Health Care System’s Urology Department, Phoenix, Arizona, January 28, 2015; Review of 

Alleged Patient Deaths, Patient Wait Times, and Scheduling Practices at the Phoenix VA Health 

The Office of the Inspector General’s work through its Office of 

Healthcare Inspections, Office of Audit and Evaluations, and Office 

of Investigations supports the decision of GAO to place Veterans 

Health Administration on its High-Risk List. 

There have been a number of recent hearings which have identified many of the issues that VA must address, from business processes, IT capabilities, organizational structure, to personnel practices. VA leadership has committed to make these changes. 

The Choice Act recognizes that VA cannot provide all the medical 

care that veterans require. The decisions to make or buy health 

care must be done carefully and with broad community input. I 

hope that stakeholders will test the decisions VA makes over the 

coming months primarily by assessing the impact that decisions 

have upon the quality of health care provided. 

With that, Mr. Abe from the OIG Office of Audits and Evaluations and I will be pleased to answer your questions. 

[The prepared statement of Dr. Daigh follows:] 

PREPARED STATEMENT OF JOHN D. DAIGH, JR., M.D., CPA, ASSISTANT INSPECTOR

GENERAL, OFFICE OF HEALTHCARE INSPECTIONS, OFFICE OF INSPECTOR GENERAL, 

U.S. DEPARTMENT OF VETERANS AFFAIRS

Mr. Chairman and Members of the Committee, Thank you for the opportunity to 

discuss the Office of Inspector General’s (OIG) health care reviews and audits of 

programs and performance of the Veterans’ Health Administration (VHA). I am accompanied by Gary Abe, Deputy Assistant Inspector General for Audits and Evaluations, Office of Inspector General. 

VHA is at risk of not performing its mission as the result of several intersecting 

factors. VHA has several missions, and too often management decisions compromise 

the most important mission of providing veterans with quality health care. Leadership has too often compromised national VHA standards to meet short term goals. 

The Veterans Integrated Service Networks (VISN) do not consistently support local 

VA medical centers (VAMC) to encourage success and proactively address areas of 

risk. Resource management data gaps make the cost-effective delivery of a national 

benefit challenging. VHA’s internal processes are inefficient and make the conduct 

of routine business unnecessarily burdensome. 

PRIMARY MISSION IS QUALITY HEALTH CARE

VHA has many missions, the first of which should be the delivery of high quality 

health care. The first test of a management decision should be an assessment of its 

impact upon the delivery of quality health care. For example, veterans who receive 

their medical care through the VA need timely access to emergency care. The management of a possible myocardial infarction, stroke, or appendicitis requires not only 

a sophisticated emergency room and readily available imaging, but hospital specialty treatment rooms and dedicated teams to provide timely critical care. Many 

smaller hospitals cannot provide timely expert care for patients with these conditions. VHA’s decision to operate an emergency room or urgent care center should 

have the quality delivery of this care as its most important standard. Arguments 

that veterans prefer to receive their care at VA or that this care creates contracting 

difficulties are secondary to the imperative that high quality care be provided. All 

medical care provided at each facility should be considered against this test. 

VHA LEADERS MUST SET HIGH STANDARDS AND SUPPORT SUBORDINATES

The many OIG reports on the Phoenix VA Health Care System and problems with 

the VA appointment system highlight the challenges leaders must overcome if quality health care is to be provided. 

Since May 28, 2014, we have issued four reports on the Phoenix VA Health Care 

System (PVAHCS).1 The initial two reports (May 2014 and August 2014) were the 

25 

Care System, August 26, 2014; Interim Report: Review of VHA’s Patient Wait Times, Scheduling 

Practices, and Alleged Patient Deaths at the Phoenix Health Care System, May 28, 2014. 

result of work by a multidisciplinary staff from the OIG’s Office of Audits and Evaluations and Office of Healthcare Inspections. The OIG found patients at the 

PVAHCS experienced access barriers that adversely affected the quality of primary 

and specialty care provided for them. Patients frequently encountered obstacles 

when they or their providers attempted to establish care, when they needed outpatient appointments after hospitalizations or emergency department visits, and 

when seeking care while traveling or temporarily living in Phoenix. The problems 

in Phoenix were due to a failure by management to recognize the increased demands on the facility and to request and apply the resources to address those demands either through increased staffing or increased use of non-VA fee care. 

Also, senior headquarters and facility leadership were not held accountable for implementing action plans that addressed compliance with scheduling procedures. The 

use of inappropriate scheduling practices caused reported wait times to be unreliable. The underreporting of wait times resulted from many causes, to include the 

lack of available staff and appointments, increased patient demand for services, and 

an antiquated scheduling system. The ethical lapses within VHA and PVAHCS’s 

senior leadership ranks and mid-level managers also contributed to the unreliability 

of reported access and wait time issues, which went unaddressed by those responsible. 

In our first two reports, we made 24 recommendations to VA to implement immediate and substantive changes to their policies and procedures. The VA Secretary 

concurred with all 24 recommendations and submitted acceptable corrective action 

plans. As of March 3, 2015, 18 recommendations from these reports remain open. 

In response to our work, VA reported it took immediate action to ensure that 3,400 

veterans who we identified needed health care services received medical appointments. Our review identified that use of unofficial wait lists and manipulation of 

wait time data were pervasive practices in VA. As a result, VA reported it took immediate actions to reach out to over 266,000 veterans to get them off wait lists and 

into clinics, made nearly 912,000 referrals to private health care providers for needed care, and scheduled approximately 200,000 new VA appointments nationwide for 

veterans. These reports brought much needed accountability over serious access 

issues, led to changes in the highest level of VA leadership, and enactment of the 

Veterans Access, Choice, and Accountability Act of 2014 (also known as The Choice 

Act), which expanded veterans’ access to care outside the VA system and included 

a $16 billion increase in VA’s funding. 

The most recent reports issued by the OIG’s Office of Healthcare Inspections were 

the results of information received during the work conducted at the PVAHCS during the spring and summer of 2014. Our January 28, 2015, interim report on 

PVAHCS’s Urology Services requires VA’s immediate attention. It is also indicative 

of the challenges that VA faces in staffing and coordinating non-VA care. After experiencing a staffing shortage within the PVAHCS Urology Department, some patients 

were referred to non-VA urologists via voucher or fee basis authorization. In 23 percent of cases reviewed, we found approved authorizations for care, notations that 

authorizations were sent to contracted providers, and scheduled dates and times of 

appointment with non-VA urologists but no scanned documents verifying that patients were seen for evaluations and, if seen, what the evaluations might have revealed. This finding suggests that PVAHCS has no accurate data on the clinical status of the patients who were referred for urologic care outside of the facility. 

VHA ORGANIZATIONAL ENTITIES MUST BE MORE EFFECTIVE

The current VISN structure has not worked effectively to support and solve problems facing hospitals. A VISN contains medical facilities of varying size and capability. For example, one requirement for all medical facilities is that their providers 

be properly credentialed and privileged. One aspect of privileging providers is the 

presentation of physician performance data to the hospital privileging committee. In 

a forthcoming report on solo physicians’ professional practice evaluations, we found 

that in hospitals where there are specialty units with small numbers of providers, 

it is difficult to obtain unbiased peer reviews of clinical cases and appropriate assessments of clinical performance by peers. The VISN structure has been inconsistently effective in addressing this issue. 

Each VISN has a different internal organization and each medical facility has a 

different internal structure. This lack of standardization makes the dissemination 

of information and policy to facilities challenging and the acquisition of critical data 

from facilities more difficult. When we tested facility compliance with directives reVerDate Mar 15 2010 14:19 Aug 10, 2016 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6621 Z:\ACTIVE\042915.TXT PAULIN
26 

2 Use and Reprocessing of Flexible Fiberoptic Endoscopes at VA Medical Facilities, June 16, 

2009; Follow-Up Colonoscope Reprocessing at VA Medical Facilities, September 17, 2009. 3 Healthcare Inspection—Evaluation of the Veterans Health Administration’s National Consult 

Delay Review and Associated Fact Sheet, December 15, 2014. 4OIG Determination of Veterans Health Administration’s Occupational Staffing Shortages, January 30, 2015. 5 Audit of Physician Staffing Levels for Specialty Care Services, December 27, 2012. 6 Audit of Veterans Health Administration’s Non-VA Outpatient Fee Care Program, August 3, 

2009; Veterans Health Administration—Review of Outpatient Fee Payments at the VA Pacific Islands Health Care System, March 17, 2010; Review of Veterans Health Administration’s Fraud 

Management for the Non-VA Fee Care Program, June 8, 2010; Audit of Non-VA Inpatient Fee 

garding the proper treatment of reusable medical equipment, we found significant 

non-compliance with initial policy statements.2 When we looked at VA data on compliance with instructions to address shortcomings in the consult management process, there was wide variance across the VISNs in compliance with instructions.3

RESOURCE MANAGEMENT

VHA’s budget and execution data across the system does not permit ready analysis at the Department or clinic level across VHA. The cost of providers and support 

staff is often a relevant cost in health care financial analysis. VHA does not have 

an adequate system to build the human requirements to provide health care appropriate for financial analysis. In recognition of this issue, Congress passed The 

Choice Act which requires the OIG for the next 5 years to report on the staffing 

needs of VHA and to audit the accuracy and timeliness of payments made under 

this law within 30 days after VHA has spent 75 percent of the $9.7 billion in funding authorized for patient care. Our first report was issued on January 30, 2015, in 

which we noted that the five occupations with the largest staffing shortages were 

Medical Officer, Nurse, Physician Assistant, Physical Therapist, and Psychologist.4

The data presented is VHA’s ‘‘wish’’ list for talent, not a requirement driven list. 

The requirement for VHA to develop a staffing methodology is not new. OIG assessed whether VHA has an effective methodology for determining physician staffing levels for 33 of VHA’s specialty care services.5 Audits and inspections continue 

to identify the need for VHA to improve its staffing methodology by implementing 

productivity standards. Public law mandates VA establish a nationwide policy to ensure medical facilities have adequate staff to provide appropriate, high-quality care 

and services. We found VHA did not have an effective staffing methodology to ensure appropriate staffing levels for specialty care services. Specifically, VHA did not 

establish productivity standards for all specialties and VA medical facility management did not develop staffing plans. This occurred because there is a lack of agreement within VHA on how to develop a methodology to measure productivity, and 

current VHA policy does not provide sufficient guidance on developing medical facility staffing plans. Other essential personnel in a hospital, to include pharmacists, 

dieticians, physical therapists, also do not have staffing standards. 

Each VISN and hospital has its own unique organizational chart. The combination 

of a lack of a robust capability to determine requirements and a lack of organizational standardization impedes the ability of managers to make effective financial 

decisions. 

OPERATIONAL EFFICIENCY MUST IMPROVE

A number of VHA’s internal operations and systems, which should be seamless 

to providers, do not function well. The appointment system inefficiencies have contributed to wait time problems. Medical consultation software was permitted to devolve such that information within the system was not standard and in many cases 

not reliable. This has resulted in patients who were lost to appropriate colon cancer 

screening. The process of hiring a new employee is extremely cumbersome and is 

but one element of the human resources management program that must improve. 

The work-arounds and lost productivity attributed to these ‘‘systems’’ makes the delivery of quality care much more difficult. 

THE VETERANS ACCESS, CHOICE, AND ACCOUNTABILITY ACT OF 2014

Implementation of the Veterans Access, Choice, and Accountability Act of 2014 is 

a considerable challenge for VA. In addition to coordinating care for patients outside 

the VA system, VA also has to ensure that payments are made timely and accurately and that results of medical appointments are shared between VA and nonVA providers. These issues have been problematic in the past for VA. The OIG has 

provided significant oversight of billing issues in the non-VA Fee Care program over 

the last several years.6

27 

Care Program, August 18, 2010; Review of Alleged Mismanagement of Non-VA Fee Care Funds 

at the Phoenix VA Health Care System, November 8, 2011; Administrative Investigation, Improper Contracts, Conflict of Interest, Failure to Follow Policy, and Lack of Candor, Health Administration Center, Denver, Colorado, April 12, 2012; Review of Enterprise Technology Solutions, LLC, Compliance with Service-Disabled Veteran-Owned Small Business Program Subcontracting Limitations, August 20, 2012; Veterans Health Administration—Review of South Texas 

Veterans Health Care System’s Management of Fee Care Funds, January 10, 2013. 

NON-VA CARE

Non-VA medical care is care provided to eligible veterans outside of VA when VA 

facilities are not feasibly available. It consists of two major programs, Non-VA Care 

Inpatient and Outpatient programs and Patient-Centered Community Care (PC3). 

The OIG has continued to report that VHA faces significant challenges to address 

serious nationwide weaknesses in its Non-VA Care Inpatient and Outpatient programs. Total annual Non-VA Care Program disbursements have grown from about 

$4.4 billion in fiscal year (FY) 2009 to about $5.6 billion in FY 2014. 

As early as 2009, we reported that VHA improperly paid 37 percent of outpatient fee claims resulting in $225 million in overpayments and $52 million in underpayments. We estimated $1.1 billion in overpayments and $260 million in underpayments over the next 5-year period if VHA did not strengthen its processes for authorizing fee care services. In FY 2010, we reported that VHA improperly paid 28 

percent of inpatient fee claims resulting in net overpayments of $120 million and 

estimated $600 million in improper payments could be processed over the next 5- 

year period. 

In response to our August 2010 audit of Non-VA Inpatient Fee Care Program, 

VHA agreed there will be general cost savings and efficiencies realized with consolidating the fee program’s claims processing system to achieve better economies of 

scale. Although specific cost savings depend on the actual consolidated strategy VA 

selects and on how well VA implements the chosen strategy, we conservatively estimated that current program inefficiencies cost VHA about $26.8 million in FY 2009, 

and could cost about $134 million through FY 2015. Today, we do not see VHA moving forward with an actual consolidation strategy for payment processing in the fee 

care program. 

In September 2013, VA awarded Health Net Federal Services, LLC, and TriWest 

Healthcare Alliance Corporation PC3 contracts totaling $5 billion and $4.4 billion, 

respectively. The expected life of the contracts is a base year plus 4 option years. 

VHA established the PC3 contracts to provide veterans timely access to high-quality 

care from a comprehensive network of non-VA community providers. 

This week we plan to publish the first of five projects that are reviewing various 

aspects of VA’s PC3 contract and the effectiveness of its implementation. All five 

focus on the operational risk areas that directly affect veterans’ waiting times, access to services, and continuity of care. The remaining four projects are reviewing 

whether PC3 contracted care issues are causing delays in patient care; whether PC3 

networks are providing adequate veteran access to care; whether PC3 contractors 

are providing VHA with timely medical documentation; and the effectiveness of PC3 

contract pricing. We plan to issue the remaining four reports in FY 2015. 

The report published this week was requested by the House Appropriations Committee to review VA’s FY 2014 PC3 costs and VA’s FY 2014 budget submission that 

stated PC3 contracts would save $13 million in FY 2014. Our analysis of available 

PC3 data determined that inadequate price analysis, high up-front contract implementation fees, and low PC3 utilization rates impeded VA from achieving its $13 

million PC3 cost saving estimate in FY 2014. VA paid the PC3 contractors approximately $18.9 million in FY 2014: 

• $15.1 million (80 percent) for implementation and administrative fees 

• $3.8 million (20 percent) for health care services 

These same health care services would have cost about $4.0 million if they had been 

purchased under the non-VA care program. Thus, PC3 cost about $14.9 million more 

than if VA had used the non-VA care program to purchase the same health care 

services. This occurred because VA did not conduct adequate price analyses to support its cost-savings estimate. Further, VA lacked an implementation plan to ensure 

the utilization of PC3. Thus, VA could not ensure it achieved the estimated cost savings and recouped the fees paid to the PC3 contractors. VA simply assumed that 

the PC3 contractors would develop adequate provider networks; VA medical facilities would achieve the desired 25 to 50 percent contract utilization rates; and the 

accrued PC3 cost savings for health care services would more than offset the contractors’ fees. These flawed assumptions contributed to significant PC3 contract performance problems and a 9 percent utilization rate in FY 2014. 

28 

7 Healthcare Inspections—Alleged Inappropriate Opioid Prescribing Practices Chillicothe VA 

Medical Center, Chillicothe, Ohio, December 9, 2014; Healthcare Inspections—Quality of Care 

and Staff Safety Concerns at the Huntsville Community Based Outpatient Clinic, Huntsville, 

Alabama, July 17, 2014; Healthcare Inspection—Medication Management Issues in a High Risk 

Patient Tuscaloosa VA Medical Center, Tuscaloosa, Alabama, June 25, 2014; Healthcare Inspection—Quality of Care Concerns Hospice/Palliative Care Program Western New York Healthcare 

System, Buffalo, New York, June 9, 2014; Healthcare Inspections—Alleged Improper Opioid Prescription Renewal Practices San Francisco VA Medical Center, San Francisco, California, November 7, 2013; Healthcare Inspection—Management of Chronic Opioid Therapy at a VA Maine 

Healthcare System Community Based Outpatient Clinic, August 21, 2012; Healthcare Inspection—Alleged Improper Care and Prescribing Practices for a Veteran Tyler VA Primary Care 

Clinic, Tyler, Texas, August 19, 2011; Healthcare Inspection—Patient’s Medication Management 

Lincoln Community Based Outpatient Clinic, Lincoln, Nebraska, August 10, 2012; Healthcare Inspection—Prescribing Practices in the Pain Management Clinic at John D. Dingell VA Medical 

Center, Detroit, Michigan, June 15, 2011. 8 Veterans Health Administration—Audit of the National Call Center for Homeless Veterans, 

December 3, 2014. 9 Audit of VHA’s Support Service Contracts, November 19, 2014; Audit of VHA Acquisition and 

Management of Prosthetic Limbs, March 30, 2012. 10 Audit of VHA’s Prosthetics Supply Inventory Management, March 30, 2012. 

OPIOID MANAGEMENT AT VA FACILITIES

Of increasing concern in VA and in the Nation is the use of opioids to treat chronic pain and other conditions. In May 2014, we issued a national review, Healthcare 

Inspections—VA Patterns of Dispensing Take-Home Opioids and Monitoring Patients 

on Opioid Therapy, that described some of the issues facing patients on high dosages of opioids. In addition to this national review, we have issued nine reports detailing opioid prescription issues within VA since 2011.7 Patients prescribed opioids 

frequently have complex co-morbid conditions, making them more likely to be given 

multiple medications that can interact dangerously with opioid medications even 

leading to death. These patients remain a high risk population. 

VHA’S HOMELESS PROGRAM

In FY 2015 we reported that VHA missed 40,500 opportunities where the National Call Center for Homeless Vet Center either did not refer the homeless veterans’ calls to medical facilities or it closed referrals without ensuring homeless veterans had received needed services from VA medical facilities. We assessed the effectiveness of VHA’s National Call Center for homeless veterans in helping veterans 

obtain needed homeless services.8 The call center is VA’s primary vehicle for communicating the availability of VA homeless programs and services to veterans and 

community providers. Our oversight identified serious problems in the Call Center’s 

intake and referral processes that were seriously hampering the Call Center’s effectiveness and services to homeless veterans. Of the approximately 51,500 referrals 

made in FY 2013, the Call Center provided no feedback or improvements to VAMCs 

to ensure the quality of the homeless services and closed 47 percent of referrals even 

though the VA medical facilities had not provided the homeless veterans any support services. 

VA PROCUREMENT PRACTICES

We have continually reported in VA’s Performance and Accountability Report the 

challenges VA faces in the area of procurement, to include planning, solicitation, negotiation, award, and administration. Many of our reports have identified weaknesses in procurement actions that did not provide assurance that VHA obtained 

fair and reasonable prices or that competition requirements were met.9 Today VHA 

still needs a modern inventory system. In FY 2012, we reported VHA needs to 

strengthen VAMC management of prosthetic supply inventories to avoid spending 

funds on excess supplies and to minimize risks related to supply shortages. VAMCs 

spent about $35.5 million to buy prosthetic supplies in excess of current needs. Also, 

VAMCs increased the risks of supply expiration and disruptions to patient care due 

to supply shortages.10 We recommended VHA implement a modern inventory system and strengthen management of prosthetic supply inventories. As an interim 

measure to address recommendation from our 2012 report, VHA implemented system patches while a new system is in development. 

In FY 2012, the Office of Management and Budget stated Government spending 

for support service functions quadrupled over the past decade. Previous OIG audits 

identified recurring systemic deficiencies in virtually all phases of VHA’s contracting 

processes. In our November 2014 audit report, we noted that VHA’s support service 

contract costs increased 60 percent from approximately $503 million for about 5,100 

29 

11 Review of VA’s Management of Health Care Center Leases, October 22, 2013. 12 Audit of Non-Recurring Maintenance Program, May 7, 2014. 13 Review of Minor Construction Program, December 17, 2012. 14Follow-Up Audit of the Information Technology Project Management Accountability System, 

January 22, 2015; Audit of the Project Management and Accountability System Implementation, 

August 29, 2011. 

contracts in FY 2012 to just over $805 million for about 4,700 support service contracts in FY 2014. VHA did not have effective internal controls or follow existing 

controls to ensure adequate development, award, monitoring, and documentation of 

support service contracts. The contract deficiencies included insufficient documentation of key contract development and award decisions, assurance that paid invoice 

amounts were correct and funds were de-obligated following the contract completion, 

and a complete history of contract actions in VA’s mandatory Electronic Contract 

Management System. 

During FYs 2012 and 2013, we estimated VA made about 15,600 potential unauthorized commitments valued at approximately $85.6 million, which require ratification actions. Unauthorized commitments are agreements that are not binding solely 

because the Government representative who made them lacked the authority to 

enter into that agreement on behalf of the Government. Unauthorized commitments 

include commitments made by individuals who do not have valid warrants or exceed 

the limitations of their warrant authority. The significant number of unauthorized 

commitments we identified exemplifies persistent weaknesses in VA procurement 

practices and especially using purchase cards. Further, the practice of institutional 

ratifications does not hold individuals accountable for this serious offense. 

VA CONSTRUCTION PROGRAM

In FY 2014, we issued a report on VA’s management of several health care center 

leases that found that VA’s process was not effective and did not fully account for 

expenditures.11 Among our recommendations was to establish adequate guidance for 

management of the procurement process of large-scale build-to-lease facilities and 

establish central cost tracking to ensure transparency and accurate reporting on 

health care center expenditures. 

We also reviewed VHA’s non-recurring maintenance program where expenditures 

increased from $824 million in FY 2008 to $1.8 billion in FY 2013.12 We reported 

that VHA did not have an adequate process to track how much of the over $1.8 billion in non-recurring maintenance funds medical facilities spent to address its nearly $10.7 billion facility maintenance backlog. 

In FY 2013 we reported VHA did not adequately review individual projects to ensure proper use of minor construction funds.13 Specifically, VA medical facilities integrated design and construction work for 7 of 30 minor construction projects into 

3 combined projects that exceeded the $10 million minor construction spending 

limit. This occurred because VHA did not effectively oversee project execution after 

funding was distributed to individual project accounts. As a result, VHA violated the 

Antideficiency Act by integrating design and construction work for five minor construction projects into two combined projects by exceeding the $10 million minor 

construction threshold. VHA would have likely committed a third Antideficiency Act 

violation if we had not identified two other minor construction projects that integrated design and construction work into a single contract solicitation, which VHA 

suspended while in the award process. 

INFORMATION TECHNOLOGY MANAGEMENT

VA launched the Project Management Accountability System (PMAS) in 

June 2009. We followed-up to assess whether the Office of Information and Technology (OIT) took effective actions to address recommendations we made to 

strengthen PMAS in two prior audit reports.14 We reported in 2015 that OIT has 

taken steps to improve PMAS, but more than 5 years after its launch, OIT has not 

fully infused PMAS with the discipline and accountability necessary for effective 

oversight of IT development projects. Two OIT offices did not adequately perform 

planning and compliance reviews. The PMAS Business Office (PBO) still had Federal employee vacancies and the PMAS Dashboard lacked a complete audit trail of 

baseline data. Project managers continued to struggle with capturing increment 

costs and project teams were not reporting costs related to enhancements on the 

PMAS Dashboard. 

These conditions occurred because OIT did not provide adequate oversight to ensure our prior recommendations were sufficiently addressed and that controls were 

operating as intended. OIT also did not adequately define enhancements in the 

30 

15 Review of the Award and Administration of Task Orders Issued by the Department of Veterans Affairs for the Replacement Scheduling Application Development Program, August 26, 

2009 16 Audit of Pharmacy Reengineering Software Development Project, December 23, 2013. 17 Review of Alleged Misuse of VA Funds To Develop the Health Care Claims Processing System, March 2, 2015. 

18 VA’s Federal Information Security Management Act Audit for Fiscal Year 2013, May 29, 

2014. 

PMAS Guide. As a result, VA’s portfolio of IT development projects was potentially 

being managed at an unnecessarily high risk. 

Since approximately 2000, VA has made a number of unsuccessful efforts to replace VHA’s Veterans Health Information Systems and Technology Architecture. VA 

canceled the Replacement Scheduling Application (RSA) project.15 A March 2009 

memo from the Under Secretary for Health to the Acting Assistant Secretary for Information and Technology stated that the RSA project had not developed a single 

scheduling capability it could provide to the field nor was there any expectation of 

delivering a capability in the near future. The memo also stated that after more 

than 5 years and a cost of more than $75 million, the RSA failed to deliver a useable 

product because of ineffective planning and oversight. 

We reported that because the RSA project lacked defined requirements, an information technology architecture, and a properly executed acquisition plan, RSA was 

at significant risk of failure from the start. We suggested that VA needed experienced personnel to plan and manage the development and implementation of complex information technology projects effectively. We also suggested that a system to 

monitor and identify problems affecting the progress of projects could support VA’s 

leadership in making effective and timely decisions to either redirect or terminate 

troubled projects. Since the cancelation of the RSA project, VA has continued to seek 

solutions to replace its current scheduling system. 

In another OIG audit we assessed OIT’s management of VHA’s Pharmacy Reengineering program (PRE), and reported that OIT needed stronger accountability 

over cost, schedule, and scope.16 We also reviewed allegations that VHA’s Chief 

Business Office (CBO) violated appropriations law by improperly obligating a total 

of $96 million of medical support and compliance funds to finance the development 

of the Health Care Claims Processing System (HCCPS).17 We substantiated that 

$92.5 million was improperly obligated, The CBO spent approximately $73.8 million 

and $18.7 million remains obligated. Medical support and care appropriations are 

only authorized for administering medical, construction, supply, and research activities. By using MS&C appropriations, VHA avoided competing with other VA projects 

for IT appropriations. 

INFORMATION TECHNOLOGY SECURITY

In May 2014, we published our annual assessment of VA compliance with the 

Federal Information Security Management Act (FISMA) and applicable National Institute of Standards and Technology guidelines.18 We contracted with the independent accounting firm CliftonLarsonAllen LLP to perform this audit. We found 

that VA had made progress developing policies and procedures but still faced challenges implementing components of its agency-wide information security risk management program to meet FISMA requirements. While some improvements were 

noted, FISMA audits continued to identify significant deficiencies related to access 

controls, configuration management controls, continuous monitoring controls, and 

service continuity practices designed to protect mission-critical systems. 

Weaknesses in access and configuration management controls resulted from VA 

not fully implementing security control standards on all servers and network devices. VA has not effectively implemented procedures to identify and remediate system security vulnerabilities on network devices, database and server platforms, and 

Web applications VA-wide. Further, VA has not remediated approximately 6,000 

outstanding system security risks in its corresponding Plans of Action and Milestones to improve its overall information security posture. 

As a result of the FY 2014 consolidated financial statement audit, CliftonLarsonAllen LLP concluded a material weakness still exists in VA’s information security 

program. We recommended the Executive in Charge for Information and Technology 

implement comprehensive measures to mitigate security vulnerabilities affecting 

VA’s mission-critical systems. We plan to issue the FY 2014 FISMA audit results 

shortly. 

31 

CRIMINAL ACTIVITY

Threats and Assaults—Since October 1, 2013, we conducted more than 1,000 preliminary inquiries and full investigations relating to threats made against or by VA 

employees and against facilities resulting in 44 arrests and/or involuntary commitments. Although most threat-related investigations do not result in judicial action, 

we take all threats seriously. We also conducted 17 assault investigations resulting 

in 24 arrests, and 9 sexual assault investigations resulting in 4 arrests. These investigations involved veterans assaulting VA employees and other veterans, as well as 

VA employees assaulting veterans and other VA employees. In one investigation, a 

veteran was sentenced to 2 years’ incarceration after pleading guilty to threatening 

to kill Atlanta, Georgia, VAMC medical staff by going to his residence to get a weapon, return, and shoot them in the head if he was not granted a 100 percent disability pension rating. The veteran left the VAMC and before he could return he 

became engaged in a shootout with local police at his residence after the officers responded to a domestic disturbance call. 

Drug Diversion—Since October 1, 2013, we have arrested 184 individuals who diverted and/or sold controlled and non-controlled substances from and at VA facilities. Among them were VA health care providers who stole pain medications intended for specific patients and consumed them while on-duty and delivering patient 

care; patients who sold their prescribed drugs to other VA patients; individuals who 

sold contraband drugs such as heroin at VA facilities; and employees of delivery 

services, including the U.S. Postal Service, who stole prescription drugs intended for 

VA patients. As a result of one such investigation, a Long Beach, California, VAMC 

pharmacist, three pharmacy technicians, and a distribution supervisor pled guilty 

to stealing more than 16,000 tablets of prescription medications. 

Identity Theft, Procurement Fraud, and Improper Payments—We have recently 

added headquarters staff to focus our national efforts to combat identity theft, procurement fraud, and improper payments resulting from criminal conspiracy. During 

this time period, we arrested 16 individuals who stole veterans’ personally identifiable information (PII) for a variety of criminal schemes, but primarily to facilitate 

Federal income tax refund fraud exceeding $6 million. In one investigation, a former 

VAMC clerk and a VA volunteer were sentenced to 72 months’ and 48 months’ respectively for exchanging VA patients’ PII for money and illicit drugs. 

As a result of an OIG investigation, 14 individuals were prosecuted on bribery 

charges, including an engineer at the East Orange, New Jersey, VAMC who was 

convicted of conspiring with a contractor to defraud VA of more than $6 million. In 

another investigation, a former VA contracting officer in Palo Alto, California, 

VAMC, was convicted for accepting more than $100,000 in cash, vacations, and 

other items of value in exchange for her influence in awarding contracts. To date, 

this investigation has resulted in criminal charges against two other VA employees 

and one contractor. In a third investigation, we convicted the former Director of the 

Cleveland, Ohio, and Dayton, Ohio, VAMCs on 64 corruption-related charges related 

to the sale of confidential information about VA contracts and projects to multiple 

contractors; one of the contractors used the inside information to obtain an advantage in securing a contract valued at approximately $20 million. 

We have recently initiated efforts to identify and thwart national criminal 

schemes to redirect VA benefits by defrauding the multi-agency eBenefits system, 

as well as to detect billing fraud in non-VA fee care and overseas medical care programs. One of our investigations, resulted in the conviction of a Department of Defense employee living in Germany for defrauding VA and the Office of Personnel 

Management of more than $2.2 million in medical reimbursements, which exposed 

considerable vulnerabilities in VA’s overseas medical care program. 

Eligibility Fraud in Service-Disabled Veteran-Owned Small Business (SDVOSB) 

Program—We continue to aggressively pursue allegations of eligibility fraud involving companies and individuals taking advantage of set-aside contracting in VA’s 

SDVOSB program supporting VHA healthcare delivery requirements. To date, our 

investigations have resulted in the indictment of 45 individuals and 5 companies. 

Defendants have been sentenced to a cumulative total of imprisonment exceeding 

26 years and fines and restitution exceeding $14 million. Sixty individuals and 

companies deemed culpable of committing this type of fraud have been referred to 

VA for suspension and debarment action to exclude them from receiving future 

contracts. 

Beneficiary Travel Fraud—We have worked closely with VA to identify, investigate, prosecute, and deter fraud associated with VA’s beneficiary travel reimbursement program, whose expenditures approached $797 million in FY 2014. We believe 

our efforts with VA to enhance VA’s data mining efforts and develop more effective 

warning posters to be placed where veterans submit claims for these beneficiary 

32 

travel benefits, coupled with increased media attention resulting from DOJ press releases, have played a significant role in deterring such crime. VA reports expending 

nearly $43 million fewer dollars in this program in FY 2014 than in FY 2012. 

CONCLUSION

The issues confronting VHA are issues that the OIG has long reported as serious 

and in need of attention at the VA Central Office, at the Veteran Integrated Service 

Network, and at the facility levels. The rededication by senior leadership and renewed commitment by employees to meet the expectations of veterans and the Nation is a step in the right direction. The OIG will continue to report on these issues 

until we see that change has occurred and that it is not just a temporary adjustment. 

Mr. Chairman and Members of the Committee, Mr. Abe and I will be pleased to 

answer your questions. 

Chairman ISAKSON. Thank you, Dr. Daigh. 

Dr. Clancy. 

STATEMENT OF CAROLYN M. CLANCY, M.D., INTERIM UNDER 

SECRETARY FOR HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY STEPHEN W. WARREN, EXECUTIVE IN CHARGE 

AND CHIEF INFORMATION OFFICER, OFFICE OF INFORMATION TECHNOLOGY 

Dr. CLANCY. Good afternoon, Chairman Isakson, Ranking Member Blumenthal, and Members of the Committee. Thank you for the 

opportunity to participate in this hearing and discuss VHA’s inclusion on the GAO’s 2015 High-Risk Series Report. I am accompanied 

by Mr. Stephen Warren, the Department’s Chief Information 

Officer. 

The Secretary and I, along with all of our senior leadership, are 

strongly committed to developing long-term solutions that mitigate 

risks to the timeliness, cost effectiveness, quality, and safety of the 

VA health care system. In 2014, we established a Blueprint for Excellence, a detailed road map for the evolution of health services 

provided by VHA. It provides guidance for the alignment of resources to transform VA health services from being provider-centric 

to veteran-centric and begins to offer a pathway for addressing 

GAO’s five high-risk areas. 

VHA has the capacity to address the problems GAO clearly identified in the report. I have directed all senior leaders in VHA to 

identify resource needs in their areas of control to ensure that our 

strategic plans support resolution of GAO’s high-risk areas. Our 

budget cycle is built to fund the actions necessary to support these 

strategic goals. 

In the coming months, we will be refining our corrective actions 

plans for each high-risk area and will be using input from the 

GAO, the Inspector General, and our other advisory groups to identify root causes and develop critical actions. 

With regard to national policies and processes, VHA is integrating our policy and operations together, our leaders together 

across major business lines, such as primary care, surgical care, 

mental health, and so forth, so that policy and implementation are 

much more closely linked. Importantly, health care is a pretty dynamic enterprise, so our policies have to be flexible enough to accommodate evolving standards for clinical care as well as requisite 

clinical judgment. We will continue to improve our processes and 

33 

their implementation to address GAO and IG findings and ensure 

we provide timely, high-quality care to all veterans. 

With respect to oversight and accountability, we recently restructured the Office of the Medical Inspector into an integral element 

of our oversight and compliance programs and that office’s policies 

and procedures were revised to place a higher premium on quality 

and safety. Now, the Medical Inspector reports directly to the 

Under Secretary for Health, and this is a first foundational block 

in our developing a robust internal audit process. 

Concerning information technology, we are modernizing VA’s 

Electronic Health Record, which is the most widely used electronic 

health record in this country. We are developing a new web-based 

enterprise health management platform which will allow us to continue to share data on millions of servicemembers and veterans, 

both with the Department of Defense as well as community 

partners. 

Human capital training is critical to ensure veterans receive safe 

care, and our front-line providers need to have effective training on 

national policies and procedures. The bottom line is, our training 

has to empower employees and make it easy for every employee to 

do the right thing every time. 

Concerning resource needs and allocation priorities, we are implementing an enterprise-wide planning, programming, budget, and 

execution program to make sure that planning and prioritization 

are tightly linked with budget and execution. That has not been 

the case, I would have to say. This approach does include training 

in human capital requirements. 

Monitoring of corrective action plans and progress will be reported on a regular basis. As we implement corrective measures, 

we will be providing GAO with documentation of our progress and 

we will be seeking input from the GAO and the Office of the Inspector General to ensure that our actions are meeting the intent 

of their recommendations. We are committed to long-term durable 

solutions and sustained improvement in the high-risk areas. 

By way of positive news, from the first quarter of fiscal year 2014 

to the first quarter of fiscal year 2015, 71 percent of our facilities 

have made meaningful improvement as judged by our comprehensive system of measures, which is called SAIL. I look forward to 

showing you other improvements we have made. 

In addition to the five high-risk areas, GAO’s report mentioned 

that VA has many recommendations that have yet to be fully resolved, and VHA and GAO have established a new process to enhance our collaboration for reviewing open recommendations and 

documentation that GAO needs to assess those completed actions. 

In conclusion, I want to say that the review and assessment of 

our programs is something that we welcome as part of our commitment to providing the best health care to veterans. VHA must operate with accountability, with integrity, reliability, and transparency 

to earn and maintain the trust of veterans, stewards of the system, 

and the public. We need to build for success but at the same time 

be ever vigilant for weaknesses, failure, and opportunities to eliminate waste. We look forward to building a better and stronger system for our Nation’s veterans and demonstrating substantial 

progress in the five high-risk areas. This transformation we are unVerDate Mar 15 2010 14:19 Aug 10, 2016 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6601 Z:\ACTIVE\042915.TXT PAULIN
34 

dertaking represents probably the greatest enhancement in health 

care for veterans that will be made in a generation and we are taking this very seriously. 

This concludes my testimony. We would be happy to answer your 

questions. 

[The prepared statement of Dr. Clancy follows:] 

PREPARED STATEMENT OF DR. CAROLYN M. CLANCY, INTERIM UNDER SECRETARY

FOR HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS

AFFAIRS

Good afternoon, Chairman Isakson, Ranking Member Blumenthal, and Members 

of the Committee. Thank you for the opportunity to participate in this hearing and 

to discuss the Veterans Health Administration’s (VHA) inclusion on the Government 

Accountability Office’s (GAO) 2015 High Risk Series report. I am accompanied today 

by Stephen Warren, Executive in Charge for the Office of Information Technology 

and Chief Information Officer for the Department of Veterans Affairs (VA). 

We welcome VHA’s inclusion in the 2015 High Risk Series report. The report 

comes at a critical time for VHA and highlights issues that are important to Veterans and the public. In many ways, VHA is on the cutting-edge of the health care 

industry. We recognize that we need to make significant improvements. VA recently 

implemented important changes to remedy many of the issues and concerns identified by GAO. In September 2014, VA began the MyVA initiative, which focuses VA’s 

efforts to view customer service from a Veteran’s perspective. With this initiative, 

VHA’s future goals are to ensure that: 

1. Veterans have a clear understanding of VA and where to go for what they need 

within any of VHA’s facilities; 

2. VA employees are empowered with the authority, knowledge, and tools they 

need to solve problems and take action, and; 

3. The products and services that VHA delivers to Veterans are integrated within 

the organization. 

VA will continue to identify and rectify issues within our Department. We respect 

GAO’s work and take their recommendations regarding VA programs and policies 

very seriously. Therefore, we share GAO’s goal of ensuring Veterans are provided 

with the high quality health care they have earned and deserve. 

GAO categorized its concerns about VA’s ability to ensure the timeliness, cost-effectiveness, quality, and safety of the health care the department provides into five 

broad areas: (1) policies and processes: (2) oversight and accountability: (3) information technology: (4) training for VA staff; and (5) resource needs and allocation priorities. VHA is taking the following steps to address these high risk areas GAO has 

identified. 

Policies and Processes 

VHA has subject matter experts in all program areas responsible for developing 

and maintaining national policies. The subjects of these national policies can range 

from something as extremely complex as organ procurement for transplants, to 

something as fundamental as the handbook on employee uniforms. Before VHA 

issues a national policy, the policy undergoes thorough review and approval to ensure it is compliant with law and regulation. During policy development, subject 

matter experts obtain input from relevant VA stakeholders. All national policies undergo labor and management review. In addition, all policies undergo an extensive 

concurrence process before they are published for national implementation. 

Importantly, health care is a dynamic industry, and our policies must be flexible 

enough to accommodate evolving standards for clinical care. In addition, VHA policies strive to accommodate clinical care standards that can vary across the country. 

We will continue to improve our processes and implementation of policies to address 

the GAO and Office of the Inspector General (OIG) findings. 

Oversight and Accountability 

The Office of the Medical Inspector (OMI) is an integral element of VHA’s oversight and compliance program. Responsible for assessing the quality of VA health 

care through site-specific investigations and system-wide assessments, OMI reports 

directly to the Under Secretary for Health. OMI’s policies and procedures were restructured in 2014 to ensure that health care quality and patient safety remain a 

primary and constant focus. 

OMI exercises its traditional oversight role by investigating concerns about the 

quality of health care that VHA provides to Veterans. These concerns may come to 

35 

1 Veterans Health Information Systems and Technology Architecture 

our attention via VHA’s internal monitoring of activities, complaints from individual 

Veterans, issues raised by Members of Congress, or whistleblower allegations referred by the Office of Special Counsel (OSC). In carrying out these investigations, 

OMI conducts record reviews, site visits, interviews, and surveys. In each instance, 

OMI produces comprehensive reports containing recommendations for quality improvements to VA medical centers, Veterans Integrated Service Networks (VISN), 

and VHA Program Offices, and then works with them to ensure that corrective actions are completed. OMI’s analyses have changed local and national health care 

policy and procedures. 

OMI meets monthly with the Assistant Inspector General, Office of Health Care 

Inspections, to review cases and health care issues that each are addressing to 

share information about ongoing and planned inspections, and to avoid duplication 

of effort. In addition, OMI meets regularly with OSC to review the status of whistleblower investigations, and to discuss schedules for reports and other deliverables. 

These meetings have improved communication between OSC and VA on investigative findings, ensuring complaints are thoroughly examined and that whistleblowers 

receive the protections they are entitled to under the law. 

As part of VHA’s ‘‘Blueprint for Excellence,’’ OMI is expanding beyond its traditional investigative functions to create an internal audit capability within VHA, 

based on the core elements of risk assessment, testing of critical control measures, 

and for-cause investigation. The information and data gathered through audit and 

assessment activities helps VHA to better identify system vulnerabilities and manage risks across VHA. 

Last summer, VA established the Office of Accountability Review (OAR) to ensure 

that appropriate leadership accountability actions are taken when facility leaders 

are implicated in findings by the OIG, OMI, or other oversight bodies. OAR reports 

directly to the Secretary and thus functions independently of VHA. 

VHA also has other offices that have roles in VHA’s integrity, oversight, and compliance activities. Taken collectively, these activities help ensure integrity and accountability across VA’s health care system. The improved cooperation we are fostering will help overcome some of VHA’s current challenges in providing effective 

health care oversight, and support efforts to restore Veterans’ and the public’s trust. 

Information Technology 

VHA runs the largest health care system in the country; delivering the quality 

care Veterans deserve is not possible without innovative information technology and 

data sharing. VA’s Electronic Health Record (EHR), VistA,1 is the most widely used 

EHR in the United States, and VA is working rapidly to modernize it. VA is developing a new web application and services platform called the Enterprise Health 

Management Platform (eHMP). eHMP is the VistA application clinicians will use 

during their clinical interactions with Veterans. eHMP brings exciting new features 

to the clinician, including Google-like search capabilities and information buttons 

that help clinicians find needed information much faster than current systems. VA 

is already piloting eHMP, and expects to deploy it to 30 sites by the end of the calendar year, with full rollout—including regular updates—over the next three years. 

VA continues to work with the Department of Defense (DOD) on health data 

interoperability, but it is important to note that the two Departments already share 

health care data on millions of Servicemembers and Veterans. In fact, the two Departments share more health data than any other health care entities in the Nation. 

In addition to sharing health care data, VA and DOD have also paved the way for 

standardizing health care data, so that regardless of what system a clinician uses, 

the data is available in the right place and in the right way; for example, Tylenol 

and acetaminophen appear in the same place in the record because the system understands, through our data standardization, that they are the same medication. 

Today, VA and DOD clinicians can use the Joint Legacy Viewer (JLV) to see VA 

and DOD data on a single screen in a Servicemember or Veteran’s record. Eventually, eHMP will replace JLV and will allow clinicians to see VA, DOD, and thirdparty provider data in their regular clinical care tool. 

Training for VA Staff 

VHA understands that training is a critical element of development and we are 

committed to offering innovative training that utilizes clinical simulation, medical 

modeling, and other emerging technologies for our clinical, administrative and technical staff. VHA’s Employee Education System holds 13 national and two state system-wide accreditations supporting VHA’s clinical/professional continuing education 

requirements. With its interagency shared training, VHA continues to expand caVerDate Mar 15 2010 14:19 Aug 10, 2016 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6621 Z:\ACTIVE\042915.TXT PAULIN
36 

pacity by leveraging learning content offered through other Federal agencies. VHA 

is also partnering with the VA Learning University to improve our training materials and methodologies. Our priority is to continue to assess target audience satisfaction, appropriate content level, and various methods of delivery to improve training outcomes. 

Resource Needs and Allocation Priorities 

In order to meet the VA’s health care mission most effectively, VHA must share 

a customer service perspective that places Veterans’ needs—and VHA’s ability to 

meet those needs—as paramount. Staff offices must leverage all possible authorities 

and streamline processes to promote agility compared with the efficiency of the best 

private sector health systems. VA and VHA are moving forward with implementing 

a planning, programming, budget and execution program that will ensure our medical care planning and prioritization drives the budget request and execution. 

CONCLUSION

Mr. Chairman, VA welcomes the review and assessment of its programs as part 

of its commitment to providing the best health care to Veterans. We look forward 

to building a better and stronger Federal agency for our Nation’s Veterans. This 

concludes my testimony. My colleague and I are prepared to answer any questions 

you or other Members of the Committee may have. 

Chairman ISAKSON. Thank you, Dr. Clancy. 

Mr. Warren, did you have any comments you wanted to make? 

Mr. WARREN. No, sir, I am here just in a supportive role. 

Chairman ISAKSON. Just in case she needs some help? 

Mr. WARREN. Yes, sir. 

Chairman ISAKSON. I think she will probably do fine. 

Dr. Clancy, did you read Dr. Daigh’s report? 

Dr. CLANCY. I did, yes. 

Chairman ISAKSON. Dr. Daigh, I want to compliment you on your 

testimony. 

Dr. DAIGH. Thank you, sir. 

Chairman ISAKSON. On page 5—I want Dr. Clancy to listen to 

this very closely—as early as 2009, we were—‘‘we’’ being Dr. 

Daigh’s office—reported that VHA improperly paid 37 percent of 

outpatient fee claims, resulting in $225 million in overpayments 

and $52 million in underpayments. We estimate that $1.1 billion 

in overpayments and $260 million in underpayments over the next 

5 years if VA does not change their policy. Is that correct, Dr. 

Daigh? 

Dr. DAIGH. Yes, sir. 

Chairman ISAKSON. Dr. Clancy, this last Friday, on a day off, I 

was joined by the Ranking Member Richard Blumenthal, some of 

the Colorado delegation, and some House members. We went to 

Denver, CO, where the hospital being built in Denver for the veterans is 427.5 percent over budget. The planning started in 2004 

and is about 50 percent finished. It is just ironic to me that if the 

2009 recommendations to the VHA by Dr. Daigh’s office had been 

followed and resulted, we would save $1.1 billion over 5 years. That 

is exactly the amount of cost overrun in the hospital in Denver. 

The point I want to make is this. The High-Risk List is important because it demonstrates to you where you have got a high risk 

for failure or problems in your system. VA is bereft, to me, of any 

response mechanism within it to respond to crises other than kicking the ball down the field. 

Dr. Daigh’s recommendations were clear and succinct. VA’s problems are clear and succinct. It would seem to me if I had a $1.1 

billion cost overrun in Denver and I had a $1.1 billion recVerDate Mar 15 2010 14:19 Aug 10, 2016 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6601 Z:\ACTIVE\042915.TXT PAULIN
37 

ommendation that I could save over 5 years by just changing my 

policy in fee-based care, that I would follow. Why do you think 

nothing was done over that 5-year period of time with non-VA 

care? 

Dr. CLANCY. I think what has happened historically, and Dr. 

Daigh, I think, has been consistently very clear about this, is that 

every single one of our facilities was doing the non-VA care on their 

own, and as you know, we have now got multiple pathways for 

helping veterans to get care in the community, and moreover, every 

year, we were doing a higher and higher volume. 

We have an internal Compliance and Business Integrity Unit. 

These are certified auditors that help with some of this. I think 

there were so many different approaches that there were not sufficient eyes on making sure that it was done consistently and reliably. Those processes have been consolidated as a result of the new 

law into one central business office, and I am going to be honest 

and say that we need a lot of work to get this right. 

I have all my senior leaders in D.C. this week so that they have 

got a very, very clear idea of what needs to happen, and it has got 

to happen consistently at every facility. There is no excuse for that. 

Chairman ISAKSON. Dr. Daigh, following up on the non-VA care, 

and I read your testimony, did you make specific recommendations 

as to what VHA needed to do to correct the problem? 

Dr. DAIGH. I will ask Mr. Abe to answer that. 

Chairman ISAKSON. That is fine. 

Mr. ABE. Yes, we did—— 

Chairman ISAKSON. Before you go any further, did you ever get 

a response after you made those recommendations from VA? 

Mr. ABE. Yes. Yes, we did. 

Chairman ISAKSON. And that response was, this is the way we 

have always done it? 

Mr. ABE. Not quite, but—— 

Chairman ISAKSON. Almost. 

Mr. ABE. But, we did make recommendations that, the biggest 

problem has to do with how they are organized in regards to that 

for every medical facility at the time, they are doing their own fee 

basis claims processing. When you try to establish policies and procedures and make sure all 150 facilities understand that, it is very 

difficult. 

When they process claims, we found, like you say, many improper payments, and a lot of it just had to do with the understanding of the Medicare rate or the rates that they are being 

billed and what rates they should be paying. 

One of our recommendations that has been implemented and, I 

think, is a good first start is that the major thing that we asked 

is that they get closer to Medicare rates. By legislation, they had 

to ask that they could use Medicare rates. So far, I would say about 

80 percent, 90 percent of the procedures, the services that they are 

providing from non-VA care is Medicare rates, which makes it a lot 

easier for them to process, although they still have a lot of 

problems. 

Since 2009, when we did that first audit, VA put themselves on 

the Improper Payments Act through their Performance and Accounting Report, and ever since 2009, they have—that program, 

38 

being the non-VA care, has been on the Improper Payments List, 

under par. The inaccuracies have improved, but they are still making a lot of improper payments. 

Chairman ISAKSON. I thought that was a crystal clear example 

of why being put on this list can have a solution that can end up 

benefiting the VA and solving another problem, but my time is up. 

We are going to do a second round of questions because I want to 

follow up on this. 

Ranking Member Blumenthal. 

Senator BLUMENTHAL. Thanks, Mr. Chairman. Thank you all for 

being here. I thank each of you for your service in the ways that 

you have provided invaluable help to this Committee, to veterans, 

and to the VA. 

Let me begin with Dr. Draper. Your testimony is that more than 

100 recommendations from the GAO have not been implemented, 

is that correct? 

Ms. DRAPER. That is correct. 

Senator BLUMENTHAL. Some of those recommendations have to 

do with accountability, do they not? 

Ms. DRAPER. That is correct. 

Senator BLUMENTHAL. Some have to do with training? 

Ms. DRAPER. Mm-hmm. 

Senator BLUMENTHAL. These recommendations that have not 

been implemented with respect to training have real life consequences, do they not? 

Ms. DRAPER. Well, many of our recommendations, whether they 

are training or for oversight and accountability, have some real life 

consequences. 

Senator BLUMENTHAL. For example, I noted that in your May 

2011 report, you found that training of staff responsible for cleaning and reprocessing reusable medical equipment, such as 

endoscopes and some surgical instruments, was lacking. The failure to properly clean and reprocess these kinds of instruments can 

cause very severe infections, can they not? 

Ms. DRAPER. That is correct. 

Senator BLUMENTHAL. In fact, one of the major problems in 

health care in America today is infections that occur within hospitals, is that correct? 

Ms. DRAPER. That is correct. 

Senator BLUMENTHAL. Yet, the VA has failed to implement a 

number of recommendations having to do with that basic training 

requirement, correct? 

Ms. DRAPER. That is correct, and there have been incidents in 

some VA facilities where that has been a problem. 

Senator BLUMENTHAL. In terms of accountability and oversight, 

has the VA exercised sufficient discipline, taken sufficient measures to hold accountable individuals that fail to act properly? 

Ms. DRAPER. One of the things we talk about and one of the 

areas of putting VHA on the High-Risk List relates to oversight 

and accountability. We found several concerns there. One was that 

VA tends to rely on facility self-reported data. There is no validation of that data and it is often incomplete or inaccurate. We will 

go into the facilities and find something totally different. 

39 

They do not always audit or provide oversight activities for making sure that facilities are in compliance with particular requirements. It is not a very rigorous oversight and accountability process. 

Senator BLUMENTHAL. Has that improved? 

Ms. DRAPER. We are still seeing some of the same things. 

Senator BLUMENTHAL. In answer to my question, the oversight 

accountability process within the VA is still extremely lacking? 

Ms. DRAPER. We have not seen improvements to the recommendations we made related to those categories, a lot of those 

recommendations still remain open. 

Senator BLUMENTHAL. Those kinds of failures have real life consequences, too, do they not? 

Ms. DRAPER. They do. I can give you a perfect example. When 

we found the oversight and accountability related to outpatient appointment scheduling you hear this a lot. You see in one VA facility, the way the processes and policies play out at the local level, 

and there is so much variation from each of the many VA facilities. 

In that particular instance, we found facilities documenting their 

outpatient appointment times very differently, so the wait times 

data are unreliable. You cannot really provide oversight on something that is unreliable. 

Senator BLUMENTHAL. You cannot hold accountable people for 

failing to meet schedules if the scheduling data is unreliable. 

Ms. DRAPER. Another thing, the information technology system, 

the appointments scheduling system, it is prone to user error. If 

someone wanted to go in and manipulate the data, it would not be 

hard to do. 

Senator BLUMENTHAL. I am going to come back. Thank you for 

your answers. On the second round, I hope I will be able to come 

back to you. 

Dr. Daigh, I have read the Veterans Health Administration VA 

Office of Inspector General review of alleged patient deaths, et 

cetera, in the Phoenix Health Care System. It is dated August 26, 

2014. Your office prepared it, did they not? 

Dr. DAIGH. That is correct, yes. 

Senator BLUMENTHAL. Is that your final report on Phoenix? 

Dr. DAIGH. There is one aspect of Phoenix that we have not reported on and that is the urology care there. We issued an interim 

report on that. Shortly, we will be able to publish a urology care 

piece. 

Senator BLUMENTHAL. That is dated January 28, 2015? 

Dr. DAIGH. That sounds right, sir. 

Senator BLUMENTHAL. I am going to ask that they be made part 

of the record. 

[The information referred to follows:] 

40 

RESPONSE TO REQUEST ARISING DURING THE HEARING BY HON. RICHARD

BLUMENTHAL TO JOHN D. DAIGH, JR., M.D., C.P.A., ASSISTANT INSPECTOR GENERAL, OFFICE OF HEALTHCARE INSPECTIONS, OFFICE OF INSPECTOR GENERAL, U.S. 

DEPARTMENT OF VETERANS AFFAIRS


429q2OIGrpt1.eps
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429q2OIGrpt2.eps 429q2OIGrpt3.eps
42 


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44 

Chairman ISAKSON. Without objection. 

Senator BLUMENTHAL. Thank you. 

Have you finished your oversight and investigation of other facilities around the country? There are, I think, 93 of them that exhibited similar deficiencies; is that correct? 

Dr. DAIGH. If you are speaking, sir, of the scheduling issue that 

the Office of Investigations was undertaking, I believe that they 

are still in the process of working with Assistant United States Attorneys (AUSAs) around the country, where appropriate, to process 

that and—— 

Senator BLUMENTHAL. Did you find prosecutable offenses in the 

Phoenix report? 

Dr. DAIGH. I am not from the Office of Investigations. If you can 

ask that question for the record, we can respond, or I am sure we 

would be willing to come up and brief you on that. 

Senator BLUMENTHAL. If you could, I would appreciate it, both on 

the record and in a briefing. 

Dr. DAIGH. Yes, sir. 

Senator BLUMENTHAL. Did your report lead to disciplinary action 

against individuals? 

Dr. DAIGH. I believe that VA has taken disciplinary action 

against a number of individuals. Sir, I mostly focused on the health 

care issues that are involved in Phoenix. When you get to the actual discipline of the leadership or you get to the actual criminal 

nature of it, that turns out to be an Office of Investigations feature, 

so I would need to talk with them or—— 

Senator BLUMENTHAL. I will be submitting questions for the 

record that I hope the VA will provide responses in addressing to 

this Committee. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. Senator Hirono. 

HON. MAZIE HIRONO, U.S. SENATOR FROM HAWAII 

Senator HIRONO. I thought you were going to go to one of the 

gentlemen. 

Chairman ISAKSON. Ladies first. 

Senator HIRONO. Oh, thank you. [Laughter.] 

Thank you very much. 

There are 100 or so recommendations that have not been implemented, so this is for Dr. Clancy. Have you all prioritized the recommendations as to which ones you would want to tackle first? 

Dr. CLANCY. Yes. I think there was a suggestion or inference 

made that we are ignoring them and I really would like to state 

for the record that we are not ignoring them. 

Senator HIRONO. Yes. 

Dr. CLANCY. I do not know if that has been that way in the past. 

I can only say what we are doing right now. 

Some of the recommendations that are very, very thoughtful reflect systemic improvements we would need to make to make durable changes, which is why, frankly, many of these, or most of these 

recommendations are so valuable to us, but they do take time to 

implement. 

45 

Senator HIRONO. Yes, I understand that. My question was, again, 

of these 100 recommendations, have you established priorities 

or—— 

Dr. CLANCY. Yes, we have. 

Senator HIRONO. What were the factors that went into establishing those priorities? Let us say, of the 100 recommendations, 

what would your top ten priorities be and what were the factors 

that led to those being the top ten? 

Dr. CLANCY. These are prioritized by how quickly can the problem be fixed and what are the highest risks to patients, and then 

coming after that are things that are also important but take time 

to implement across a very large health care system. 

Senator HIRONO. Is that list of priorities something you can 

share with the Committee? 

Dr. CLANCY. We can get you that for the record, yes. 

Senator HIRONO. Getting back to the Chairman’s question, 

though, with regard to the testimony that he referred to where 

there are these huge overpayments as well as underpayments, that 

sounds like something that should be addressed pretty fast. 

Dr. CLANCY. That is something that we have been working on for 

a while, and the consolidation of our payments for care in the community that came about as a result of this law has made this visible in a far more transparent way and we are working through 

those business processes right now. Some of this has to do with the 

fact that individual facilities, as Dr. Daigh noted, were doing it 

their own way. 

Senator HIRONO. Yes. 

Dr. CLANCY. We have found, for example, that some facilities actually do not know how to estimate or how to use the tools that 

have been provided to estimate what a test or appointment or service in the community is likely to cost, and we are right in the midst 

of working through that right now. 

Senator HIRONO. So, clarifying your processes so that all your individual VA health centers, et cetera, are not doing their own 

thing, is that high on your list of priorities so that—— 

Dr. CLANCY. Very, very high. Yes. 

Senator HIRONO. OK. 

Dr. CLANCY. That is both a governance as well as a business 

process issue. 

Senator HIRONO. Good. I think part of it was that there was a 

desire that it should not be a one-size-fits-all, that there is a desire 

that different communities may want to approach the health care 

needs of their veterans in ways that would be best for them. But, 

this led to a very piecemeal, hard to account kind of a system. 

Dr. CLANCY. I think it is fair to say that when the networks were 

set up about 20 years ago, they were designed as laboratories of innovation. 

Senator HIRONO. Yes. 

Dr. CLANCY. I think that was the phrase that was used a lot, 

and—— 

Senator HIRONO. It sounded good. 

Dr. CLANCY [continuing]. That is exactly what we got. 

Senator HIRONO. Yes. 

46 

Dr. CLANCY. The flip side of that was a lot of inconsistency. I 

think we all recognize that health care in your State is different 

than health care in Georgia or Connecticut or other States for a 

whole lot of reasons. We need to have most of our core processes 

be consistent wherever veterans seek our assistance. 

Senator HIRONO. I realize that this is a vast, vast health care 

system and it is going to take a while to address the various 

changes, and this is why I am so interested in what kind of priorities you have established. Is the homeless veterans issue a high 

priority? 

Dr. CLANCY. That is a high priority for us. We have three overarching priorities this year. One is homelessness, because we are 

hoping to get as close as possible to functional zero by the end of 

this year. 

Second is access, whether that is access within our system or access to care in the community and getting that in a timely way. 

The third is veteran experience, that it is easy for veterans to 

navigate. 

Senator HIRONO. Getting back to the homeless situation, you 

have a national call center for homeless veterans and the OIG 

identified there were systemic problems with the call center leading to some 40,000 missed opportunities where the center did not 

refer calls to VA medical facilities or closed referrals without ensuring that the homeless veterans were receiving the services. Is this 

on your list of—— 

Dr. CLANCY. Yes. 

Senator HIRONO [continuing]. Priorities to change? 

Dr. CLANCY. Yes. In fact, we have separated the homeless call 

center from the veterans’ crisis line. Do you have your board? I just 

wanted to make a very brief Public Service Announcement about 

the crisis line because it is so important. I do not think a week goes 

by when I am not referring veterans directly to that line, and I am 

astonished by how rapidly they reach out and find the veterans 

and get them the help that they need. 

For a variety of reasons, both to make sure that the homeless 

calls were answered, but also to make sure that the crisis line was 

not getting overloaded with other calls—— 

Senator HIRONO. OK. 

Dr. CLANCY [continuing]. Forgive my brief Public Service Announcement. 

Senator HIRONO. I would be happy to put that information in my 

own veterans’ newsletter. 

Dr. CLANCY. We will get you a link. We will be happy to do that. 

Senator HIRONO. Thank you. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. You are going to get enough criticism. You 

ought to be allowed to brag a little bit in the hearing. We appreciate what you are doing. The hotline is a great service to our veterans and it does a great job. 

Dr. CLANCY. Thank you. 

Chairman ISAKSON. Senator Sullivan. 

47 

HON. DAN SULLIVAN, U.S. SENATOR FROM ALASKA 

Senator SULLIVAN. Thank you, Mr. Chairman, and I want to 

start by just commenting on the work of the Committee. I want to 

compliment Chairman Isakson and Ranking Member Blumenthal. 

You know, one of the things that, at least in my short time in the 

Congress, this is a committee that is very bipartisan in terms of 

its approach, in terms of what we are trying to achieve. I think 

that that stems from the leadership on both sides of the aisle, certainly, but also stems from the mission that we all recognize is so 

important, to take care of our veterans and that I know all of you 

recognize. 

Sometimes these committees, you can have an opportunity for 

people to come here and kind of pound you on something like this. 

I think the better approach is probably to just figure out what the 

heck is going on. 

Dr. Clancy, when I looked at your testimony, I was a bit troubled. The Secretary mentioned that he is fine to be on the list. He 

certainly wants to improve. But, your testimony seems to lack a 

focus. It is four pages, double spaced. It talks a lot about MyVA, 

which is a promising initiative, but I do not think that is the road 

to getting off the list. 

Let me just ask a couple of questions, and in some ways, they 

are a follow-up of Senator Hirono’s questions, which is how seriously is the VA, VHA, taking the issue that you are on this list? 

It is not a good list to be on. More importantly, she asked about 

priorities. You gave kind of broad priorities. What are the priorities 

to actually address the issues that got you on the list? 

Dr. CLANCY. We are taking this very, very seriously. Frankly, 

what I find personally most valuable, as do my colleagues, about 

being on the High-Risk List is getting at the root causes of how did 

we get here. 

Senator SULLIVAN. Right. 

Dr. CLANCY. There are two ways to look at problems. One is very 

specific problems that have been very clearly laid out for us in the 

past, and that is ongoing work. 

The second is to say, what is wrong with this picture and how 

did we get here, and that is a key part of realignment that we are 

doing internally within VHA. I would agree with you, I do not 

think the written statement was as well written as it could have 

been, and for that, I offer apologies. We would be happy, actually, 

to amend it for the record if that were an opportunity. 

Senator SULLIVAN. I think it is important. When you were just 

asked on priorities, you talked about homelessness, access, veterans’ experience. I think I, certainly, am one who is going to be 

very focused on helping work with the VA to achieve those. But, 

it does not go back to the more specific issues—— 

Dr. CLANCY. Correct. 

Senator SULLIVAN [continuing]. That put you on the list in the 

first place. What are the priorities that you are going to undertake 

to address the issues that were laid out in the GAO listing of your 

agency? 

Dr. CLANCY. Our priorities are a serious leadership commitment 

that we are moving beyond, if you have seen one VA, you have seen 

one VA. Yes, there are local differences. The buildings look a little 

48 

bit different. But, the core processes have to be very consistent and 

standardized. It is very easy for me to say this. Making it happen 

and executing to that is going to take some time. 

Capacity and the resources and, frankly, being clear to the Congress about what we need to build the capacity to meet veterans’ 

needs is very high on our list. That is why you have heard from 

the Secretary—— 

Senator SULLIVAN. Yes. 

Dr. CLANCY [continuing]. From me and others about what we 

need for hiring, what we need for space, and so forth. We recognize 

that there is also a backlog. 

Oversight and accountability is critically important. We have a 

lot of the pieces in place and I would submit that they have been 

too fragmented and need to be better integrated to rise to the challenges before us. 

Frankly, being transparent with the public and trying to get to 

a place where we are reliable, so we are posting how we are doing 

on wait times every 2 weeks for the public to see. We are also posting our results on a comprehensive system of metrics, which is how 

it is done in hospitals, outpatient care, efficiency, and so forth. But, 

that is available for the public to see every quarter. 

Senator SULLIVAN. Right. 

Dr. CLANCY. I will take Ms. Draper’s comment about self-reported data very, very seriously. We have also built some trigger 

tools so that when our people who work with the data centrally are 

seeing very funny signals, they actually let the facility know in real 

time. They do not wait for them to go look for this report. They actually send them an e-mail to say, we are seeing some funky things 

going on here and you need to investigate what is going on with 

the scheduling. 

These are early, and, I would argue, fundamental and important 

steps, but that is the building block on which we are moving forward. 

Senator SULLIVAN. Thank you. 

Thank you, Mr. Chairman, and I will have some additional questions for the record the panel can—— 

Dr. CLANCY. That would be great. I do need to tell you, Little 

Rock has actually made tremendous progress and I am very proud 

of that, so, since we are your homestate. 

Senator SULLIVAN. Well, I am actually from Alaska, so— 

Dr. CLANCY. Oh, I apologize. I got you confused. [Laughter.] 

Senator SULLIVAN. Maybe I will—— 

Dr. CLANCY. I will save that for Senator Boozman. 

Senator SULLIVAN. At least you did not confuse me for Senator 

Tillis, which happens a lot. [Laughter.] 

Thank you very much for your kind words. 

Dr. CLANCY. Well, if you see me hiding under the table, you 

know why. 

Senator SULLIVAN. That is OK. 

Chairman ISAKSON. Thank you, Senator Sullivan. 

Senator Manchin. 

49 

HON. JOE MANCHIN, U.S. SENATOR FROM WEST VIRGINIA 

Senator MANCHIN. Thank you, Mr. Chairman, and thank you all 

for being here. 

It seems like we are just piling on now. All of us have problems. 

I will give you a specific one and it is in Beckley, WV. I think you 

all just heard about that. This has been going on for quite some 

time and I will go through the specifics. 

It seems like that we are all having problems understanding why 

no one is being held accountable or actions have not been taken 

against the responsible parties. It is just ongoing with the one in 

Beckley, as I said. The Office of Special Counsel substantiated allegations of switching antipsychotic drugs based solely on cost. They 

know they are doing it. The doctors are saying, prescribe the drug. 

They make a decision at the executive level. It is pushed down to 

the pharmacist. They dispense an alternate drug that is much 

cheaper because they say they do not have the money to pay. This 

has been going on, and it the only one we have had this report, but 

for so long. 

I guess I would just ask, Dr. Clancy, what does VA have in place 

to resolve these problems or make sure they do not continue, and 

why would anyone let it go on? 

Dr. CLANCY. As you know, and I think your staff spoke with staff 

from our Office of Medical Inspector earlier today—— 

Senator MANCHIN. Right. 

Dr. CLANCY [continuing]. What you have just described is exactly 

correct. It turns out that some of the proven therapies for psychosis 

actually are sometimes better than the newer, more expensive 

ones, but what was absolutely not supposed to happen was a mandate, and veterans who were doing well on one of the newer treatments were not supposed to be switched arbitrarily—— 

Senator MANCHIN. They never got it—— 

Dr. CLANCY. Right. No, that is exactly right—— 

Senator MANCHIN [continuing]. Because it was all based on cost. 

Dr. CLANCY. Right, and that was the wrong thing to do and we 

are going to be taking corrective actions to make sure that that 

does not happen and that there is a physician on the Pharmacy 

and Therapy Committee at Beckley, which has not been the case. 

Senator MANCHIN. We seem to jump out of the fire into the frying pan. It keeps going on, back and forth, the problems that we 

are running into. We had another clinic, a satellite of the Beckley 

clinic, that was closed, and we are trying to make sure we get services down in the rural part of the State in Greenbrier County. 

Dr. CLANCY. Yes. 

Senator MANCHIN. I think we have worked with you on that, or 

are trying to work with you to try to get some help down in there. 

But, we, you know, if there is incompetency at any level, it seems 

like VA has a hard time getting rid of that, and I do not know why 

your system is so protective versus the military. Heck, they can get 

rid of people easier than you all can, I think. 

Dr. CLANCY. I do not actually know how that works. What I 

know in health care is that many people believe that you want to 

be careful about keeping punitive disciplinary actions separate 

from people reporting problems that they see, because if people are 

50 

afraid that if they report problems, they might be punished, they 

will not report them. 

Senator MANCHIN. Let me go to the—— 

Dr. CLANCY. I do not know if I am being clear. 

Senator MANCHIN. I—— 

Dr. CLANCY. We will be taking appropriate disciplinary action. 

Senator MANCHIN. We will get together, I guess. We have a problem there. You and I will talk, maybe personally, on this. 

Dr. CLANCY. Great. 

Senator MANCHIN. Dr. Daigh, on prescription drug concerns, in 

West Virginia, it is the number 1 killer in my State. These are 

drugs out of the medicine cabinet and they are just being abused. 

That is an important issue for not just me, but for, I think, every 

Senator here in every part of America that is plagued by the epidemic of drug abuse and addiction. Of course, you know the VA patients are no different. We have a lot of our veterans returning and 

they are getting over-drugged as soon as they get there. They complain to us and they cannot get the proper treatments or the proper 

evaluation to get the proper treatment they need. They are having 

problems with that. 

I guess I would just ask, is this one of your most pressing issues, 

that you are getting a lot of complaints on this? Do you see this 

in your investigation? 

Dr. DAIGH. I would say that the management of patients who require or take narcotics in excess of what seems reasonable is probably one of the most important issues the VA struggles with right 

now. They are not the Lone Ranger. I think the country struggles 

with that problem. 

Senator MANCHIN. If we had a piece of legislation that said you 

had to use an alternative before you could prescribe opiates—— 

Dr. DAIGH. I think about things in this way, sir. I think there 

are people who have pain. You have a toothache. You need treatment. 

Senator MANCHIN. Sure. 

Dr. DAIGH. I think, though, that we need to come up with a way 

to prevent that patient who starts taking narcotic for a good reason 

but then ends up abusing it for some reason. I think that for the 

population—— 

Senator MANCHIN. We know they are very addictive and people 

are getting hooked overnight. It seems like we are giving oxycontin 

for anything. You have got a headache, take an oxycontin. 

Dr. DAIGH. I agree entirely with what you are saying. I think 

that there are several ways to get there. One way to think about 

it is to try to make sure that more people do not become addicted 

to a narcotic and focus your effort on trying to keep that from happening through the many things that I know you said before that 

are—— 

Senator MANCHIN. I would like to get with you on this issue. 

Dr. DAIGH. Yes, sir. 

Senator MANCHIN. Mr. Chairman, if I may indulge, just one second, if I could. Could you all, any of you want to just answer very 

quickly, do you believe that we can give veterans better care 

through the private providers than what we are giving now 

through the VA, or just as good, if not better? 

51 

Dr. DAIGH. My personal view is it depends on what the situation 

is. For example—— 

Senator MANCHIN. I am just saying, we know all the problems 

we are having. No, no. I am just saying within the VA system. The 

culture, whether it is procurement, whether it is building a hospital, whether it is doing whatever, do you not think the taxpayers’ 

dollars would be spent better if we got our veterans channeled for 

thequickest amount ofcare and thebest care,whereverthat may be? 

Dr. DAIGH. Yes. 

Senator MANCHIN. Thank you. 

Dr. DAIGH. My answer is yes, and I think sometimes that will 

be the VA. 

Senator MANCHIN. Thank you. 

Chairman ISAKSON. Thanks, Senator Manchin. 

Senator Tillis. 

HON. THOM TILLIS, U.S. SENATOR FROM NORTH CAROLINA 

Senator TILLIS. Thank you, Mr. Chairman, and I want to thank 

all the panelists for being here. 

I have to give a shout out for one of my VAs again. I was down 

at the VA on Saturday back in Salisbury, and once again, they 

were doing great stuff, a lot of them on their personal time hosting 

an event for a Purple Heart recipient. We left there and went over 

to the town hall, which is a best practice for providing care to 

many seniors. 

To expand, Dr. Daigh, on your point, there is no doubt that many 

of the veterans who need care want care in a VA facility. The question is, can we provision it properly and can we make sure that it 

is done in the most efficient and effective way possible? 

I am not going to ask you any questions on all the shiny objects, 

reported by the GAO. I am glad to know that the VA has hit a list 

that really raises attention and, hopefully, marshaling of resources 

to fix problems. I think it is good. It is no different than a 300,000- 

person national company running in the United States where all 

of the sudden the bond raters or the stock investors put you on a 

watch list and get ready to tell people to sell your stock short because you are a failing entity. That is the reality. We have a lot 

of problems with the VA. 

We should not lose sight of the fact that most of the solutions 

to the VA are good things that are going on in the VA, and a part 

of what we have to do on this Committee is recognize we are sort 

of a board of directors and we need to perform our fiduciary responsibility to the veterans who need the care by making sure that we 

do not become a disabler, which we could potentially do, by not 

really focusing on how do we get to a systematic process that identifies the high priority items, the short-term, as Dr. Clancy said, 

the short-term things you can fix because they are relatively 

straightforward and relatively low cost and high impact. 

Then, the intermediate and long-term initiatives that we have to 

get implemented. We need an enterprise transformation strategy 

for the VA, which Secretary McDonald and I spoke about and I am 

thrilled to know, although I hope they have not fully read the GAO 

report—Dr. Shulkin and Laverne Council—because if they did, 

they may be scared to death and not want to be confirmed. I am 

52 

looking forward to the confirmation hearing. They are very talented 

people who, I think, if they come in, they can be a part of the 

solution. 

We have to step back, and instead of having these hearings—and 

I know that it takes a lot of time for you all to prepare for this, 

and I know it takes your eye off the ball of the things that you 

want to do in your enterprise. What we need to do is get to a point 

where we have a hearing where we are talking about an inventory 

of the problems. 

I had a lengthy discussion with Laverne Council on IT issues. 

There is gold on the floor for improving the IT shop in the VA, for 

improving performance, and freeing up resources for other things 

to do in the VA. We have to get that done. It is not hard. It gets 

done every day in the private sector though seldom in the U.S. 

Government. 

We have to get away from this mentality that variation—variation is oftentimes rationalized and almost never justified. There is 

a standard best practice and process for IT and provisioning of 

care. I am not talking about the care provided to patients. There 

may need to be some variations at that atomic level. All these other 

things, anybody who is in the VA who is responsible for it should 

not have a job. They should know that that was an irresponsible 

management decision. They should have had programs in place or 

recommended to their top management programs that make sense, 

which they have not done. 

I believe you all are part of the solution, and I think the GAO 

and other people that are looking at this are a very important part 

of the solution. But, we have to get to a point to where the Secretary and the senior executives develop a plan, so instead of us 

coming and chasing the shiny objects and then having people run 

down and report on progress of that shiny object, potentially at the 

expense of more important, higher-priority things, we have to start 

looking at this on a holistic basis and then decompose it into very 

specific action threats where we can actually start producing 

results. 

One thing I would urge the Secretary to consider is a different 

way of going about these programs. I think that some of the Members on this Committee, with the Chairman’s indulgence, need to 

be embedded in that enterprise planning strategy. We need to have 

people here who are not just coming here because it is interesting. 

On the one hand, we are boards of director members, and then on 

the other hand, we are the general managers of our little VA plants 

in each of our States. We hear things that are going on in the 

State, so all of the sudden, we are hammering you on the specific 

things in our State. That is not a sustainable approach to addressing these enterprise problems. 

We need to get to a point where we are talking about the strategy and less about all of these examples that need to be fixed; and 

if they do get fixed, that may satisfy us for this Committee meeting, but they are not going to satisfy us for the long term and do 

what we need to do for the veterans. 

That was probably more of a speech than questions, but, Mr. 

Chairman, the only thing I would really ask the Secretary to consider, and some of these nominees that are coming in is, let us sit 

53 

down and come up with a different approach, something that really 

has not been done on an enterprise basis, and in my estimation, 

in any area of government. Prioritize this, set specific—and capital 

improvement is another one. We talked about Denver. 

Let us talk about this enterprise and let us look at each one of 

these enterprises, put them on a heat map, find out which ones we 

should be tackling and how we prioritize the others ones, so what 

we are doing in future Committee meetings is talking about time 

to benefit and whether or not you made your goals, and hold people 

accountable—reward them for having achieved success and hold 

them accountable for having failed to. 

I think, if we do that, we will get away from this discussion that 

has been going on for years without substantial improvement and 

get to a truly transformed organization that will include VA facilities, hard working people in Fayetteville, Durham, Salisbury, Asheville, and all over this country, will include the best practices that 

are already embedded at a lot of those facilities. 

I am sorry I went over. 

Chairman ISAKSON. We will go to Senator Tester in just a second. I want to make two comments. 

First of all, I appreciate calling our attention to the confirmations. For the record, Dr. Clancy, those confirmations will be on 

May 5. The reason they were not last week is because we did not 

have the answers to all the questions that had been submitted and 

we cannot do a final markup until we do, so I appreciate your attention to that. 

Second, Sen. Tillis, I thought it was one of your better speeches. 

[Laughter.] 

I always do this. I may forward good ideas, but Dr. Clancy, do 

you have someone in the veterans health services that is the operational point person for responses to things like GAO and IG 

reports? 

Dr. CLANCY. Yes, we do. 

Chairman ISAKSON. Who is that person? 

Dr. CLANCY. A physician named Dr. Karen Rasmussen. She is 

here with me today. 

Chairman ISAKSON. Where is Karen Rasmussen? Hi, Dr. Rasmussen. How are you? I want to volunteer Senator Tillis and you 

to do a little project for me, if you would. I thought what you just 

said was an outstanding template to begin to get a game plan for 

responding and dealing with the recommendations of the IG and 

the Department. If you would work with Karen to see if there is 

a way that your idea can mesh with what they are doing in the 

VA, because I have got a feeling the VA does things the way they 

think they are supposed to do them because that is the way it has 

always been done. What you talked about is a different way of 

doing things, and maybe there is a combination between those two 

that would serve well. I do not want to force you to honor your 

speeches, but if you would be willing to do that and Karen would 

be willing, I think. 

Senator TILLIS. Mr. Chair, I would ask, with your indulgence, 

that you consider maybe having a Member from the other side join 

in, because I honestly would like for this to become a point where 

people on this body have confidence in your overarching enterprise 

54 

transformation strategy so we remove ourselves from chasing the 

latest issue of the day, which is important, but we become advocates for building credibility around a strategy that has specific 

timeline goals and measurable results. I think it would be worthwhile to have a couple of us take a look at that and I would be honored to help. 

Chairman ISAKSON. I am going to ask Ranking Member 

Blumenthal if he will supply us with a volunteer and let us know 

who that volunteer is. It does not have to be right this minute, because I pulled this totally off the top of my head, but—— 

Senator BLUMENTHAL. We will definitely provide you with a 

volunteer. 

Chairman ISAKSON. I want to thank Senator Tillis in advance for 

doing so and thank Dr. Rasmussen for being willing to take on that 

task, too. Thank you very much. 

Senator Tester, I apologize for taking some of your time. I apologize for interrupting. 

HON. JON TESTER, U.S. SENATOR FROM MONTANA 

Senator TESTER. No problem, Mr. Chairman. Thank you very 

much; and not for the record, I think that is the best speech you 

ever gave, Senator Sullivan. The best. [Laughter.] 

Senator TILLIS. I will tell Senator Sullivan you said that. 

[Laughter.] 

Senator TESTER. We had a recent hearing in front of the VA Appropriations Mil Con, VA Appropriations Subcommittee, and I believe, if I heard it correctly, the Secretary said that he requested 

that the VA be put on the High-Risk List. I may be wrong on that, 

but I thought that was the case. 

Dr. CLANCY. He did say that, yes. 

Senator TESTER. In the midst of all this, we had $1.4 billion cut 

out of the House VA appropriations bill, which I know we will deal 

with it in our own way over here that would result in less veterans 

getting care, more specifically, about $690 million cut to medical 

care means 70,000 fewer veterans would receive the health care 

they need. Veto threats have been made. The National Commander 

said the VA cannot fulfill its mission without proper funding, but 

the House, for whatever reason, now wants to ration care, eliminate infrastructure projects, stop improving upon the programs and 

services the VA was created to provide. 

Dr. Clancy, is it fair to say that if the Senate took up the VA 

funding bill as it has now been voted out of subcommittee that it 

would be very difficult to get removed from the High-Risk List? 

Dr. CLANCY. Yes, I think that is fair to say. It would certainly 

slow our progress. The Secretary has been strongly committed to 

being as open and transparent with all of you in terms of what are 

our requirements to meet veterans’ needs and that is actually what 

we submitted in the administration’s request. I will leave it at that. 

Senator TESTER. Thank you. I think the facts are that we have 

got Iraq and Afghanistan going on, but the Vietnam veterans are 

the ones who need the attention right now, and rightfully so, and 

we thank them for their service, too. Part of that thank you is making sure they get the health care they need when they need that 

health care. 

55 

I want to talk about some of those facilities. It is absolutely clear 

that we need to bolster our medical workforce. It is just not debatable. But, with that comes an increase in facilities and space to accommodate that. It is kind of the chicken and the egg kind of a 

thing. It has to happen almost simultaneously or you are not going 

to get the bang for the buck nor the services you expect. 

When I took the Secretary to Missoula, Montana here last 

month, he saw some of that local demand. We saw a clinic that has 

exceeded its capacity. The veterans in that region are growing 24 

percent just in the next 6 months. He had said that there would 

be a green light to expand that facility. I do not know if you know 

or not. Is that true? 

Dr. CLANCY. I would have to check on that and get back with 

you. 

Senator TESTER. OK. Well—— 

Dr. CLANCY. I think you had also talked about potential partnerships with the—I just forgot the name—— 

Senator TESTER. We talked about partnerships with the Billings 

clinic—— 

Dr. CLANCY. Thank you. Yes—— 

Senator TESTER [continuing]. For mental health care professionals, too—— 

Dr. CLANCY. Yes. Yes. 

Senator TESTER [continuing]. That is also very, very important. 

But, what—— 

Dr. CLANCY. I know Dr. Walter [phonetic] would be happy to pursue that. 

Senator TESTER. Here is what I would point out to you. We are 

going to expand a facility that is probably going to have to be replaced in a year or two—— 

Dr. CLANCY. Yes. 

Senator TESTER [continuing]. I understand you have got to walk 

before you can run, but the truth is that I appreciate the expansion, but ultimately, they are going to have a new building, and, 

boy, the quicker we could do that, we could maybe do away with 

some of the other expenditures, if you know what I mean. 

Dr. CLANCY. We will get back to you on that. 

Senator TESTER. All right. Thank you. 

The Chairman talked about VA leadership, which is critically important. I want to talk about that partnership with the Billings 

clinic for psychiatry at the University of Washington. Are you guys 

in the process of formalizing that partnership? Has any more been 

done than just talk? 

Dr. CLANCY. Not yet, but Dr. Walter is on my list. I have worked 

with him in a number of national medical organizations and would 

be happy to follow up with him. 

Senator TESTER. He is very, very good, but even more importantly—and I do not think there is a Senator that sits around this 

table or maybe even serves in the U.S. Senate that will not tell you 

that we need more mental health care professionals—— 

Dr. CLANCY. Right. 

Senator TESTER. Whether you are in New York State, in the 

busiest part of New York City, or whether you are in Saco, MT, we 

56 

need them. Quite frankly, I think this is an opportunity to address 

the rural aspect. 

Dr. CLANCY. Yes. 

Senator TESTER. If you can follow up on that, that would be good. 

I will tell you that I am sure that folks on this Committee, myself 

included, will do what we can do to help you meet mental health 

care needs out there, that also the whole country is short of. 

Dr. CLANCY. Right. I should just note our appreciation for the resources in the Choice Act and also in the Clay Hunt Act for attracting and helping with debt reduction and so forth. I think that we 

also need to move upstream to encourage more students to go into 

these fields and that that is clearly going to be the next frontier 

for us. 

Senator TESTER. I appreciate the Senator’s proactivity on trying 

to recruit early. 

Chairman ISAKSON. Thank you, Senator Tester. 

Senator Rounds, followed by Senator Boozman. 

Senator Rounds. 

HON. MIKE ROUNDS, U.S. SENATOR FROM SOUTH DAKOTA 

Senator ROUNDS. Thank you, Mr. Chairman. 

Earlier today, Chairman Isakson and I sent a letter to the Secretary of the VA with concerns on reimbursement changes to home 

health care and hospice care providers. I have also heard from a 

number of other groups on untimely payments from the VA. Late 

payments hurt veterans because providers are reluctant to take on 

VA patients if they do not get paid in a timely basis. How does the 

VA plan to address this particular issue? Are you aware of the 

issue? Possibility that maybe flexibility within your budgeting process could help provide for some more timely payments, and has the 

GAO made more than one mention or just the one mention in 2014 

in terms of any recommendations on this particular issue? 

Dr. CLANCY. I am acutely aware of this issue. I get a lot of emails and correspondence, as does the Secretary. And, I would 

guess that we have never been the swiftest payer. I think that is 

putting a lot of providers in a bind right now because they are feeling a lot of pressure from both the Federal Government as well as 

private payers trying to get to value-based payments and so forth. 

They have less flexibility and they are now feeling like they are 

really in a box. 

Because of the consolidation of our central business office and 

our payments, our biggest challenge right now is making sure that 

we get the business processes right. We are in the midst of doing 

that. A number of our networks have shown some improvements. 

VISN 23, which your State is part of, is one of our better networks, 

which is not to say flawless, in terms of payments. Others are further behind. 

We are keeping, literally, a weekly eye on this and will not rest 

until more providers are getting paid in a timely fashion, because 

you are completely right. Some veterans say they go to providers 

on the outside and are told, I will see you this time, but next time, 

Ido not know.That is very,very high onour list of priorities right 

now. 

57 

Senator ROUNDS. I think maybe that goes back, as the Chairman 

had suggested, back to what Senator Tillis had proposed here in 

terms of the operations side of things. 

I am just curious. It looks to me like in a lot of cases we find 

some very good people that are working within a system which, for 

lack of a better term, is simply archaic. It is a very large organization, and what I am curious about is if we talked about an organizational chart, one in which ideas can flow up and down and direction and focus moves in both directions, do you have an accurate 

organizational chart that is available to you that you have had a 

chance to look through to see where it gets from you down to a doctor, let us say, at the VA in Sioux Falls, South Dakota? 

Dr. CLANCY. I think you have just articulated one of our biggest 

challenges, for sure. I have organizational charts. I think our bigger challenge is less the boxes on the chart—although we are taking a very hard look at that and will look forward to doing more 

of that with Dr. Shulkin and so forth—but it is more what I would 

say is the physiology. How do the processes work? 

I know that there is phenomenal work going on at a lot of our 

local VAs. Salisbury would be one. They are everywhere. We do not 

actually get to learn enough from them, and I do not think that we 

have created the space in the past where if a policy is issued from 

headquarters and people do not have the resources or capacity to 

do it that they have got the space to say: great idea, except it will 

not work here. That is the alignment that we are working very, 

very hard on now, which, frankly, is why the recommendations in 

the High-Risk Report are useful to us, because they very clearly articulate root causes that we can use as sort of a compass moving 

forward. 

Senator ROUNDS. One of the employees in the Sioux Falls location tried to chart it, and as near as they could determine, from 

a physician trying to get to the top would have 13 layers to literally 

work their way through. It seems to me that that may be part of 

the challenge that you face. You can have a lot of very hard working individuals, but they are working in a system which today you 

would not find in most business proposals. Is that a fair statement? 

Dr. CLANCY. That is a very fair statement, and I will say, literally, from day one, when Secretary McDonald was confirmed, you 

know, I think it took him probably a few weeks to put his personal 

cell phone online and on CNN and so forth, and has modeled for 

all of us trying to break up that kind of hierarchial filtering, if you 

will, of information, both up and down the chain. I communicate 

with the field every week. I get a lot of e-mails back, which is symbolically important. It is not the same thing as having clearer processes for it, which is what we are working on now. 

Senator ROUNDS. Mr. Chairman, there is just one thought, and 

that is this. I think when the Chairman and the Ranking Member 

both indicated at the very first meeting that while we are going to 

ask some really tough questions, our goal is to see that you 

succeed. 

Dr. CLANCY. I appreciate that immensely. Thank you. 

Senator ROUNDS. We still feel that way and we want to see it 

happen. But, based on what we saw just in Denver and the challenges you have got there—— 

58 

Dr. CLANCY. Huge. 

Senator ROUNDS [continuing]. The issues are very significant, 

and perhaps part of what we need to do, as some of you who have 

walked into some pretty deep water with lots of gators, maybe it 

is time that we not only start draining the swamp, but maybe we 

pull a few of those gators out and move them in a different direction, as well. Thank you. 

Dr. CLANCY. Thank you. 

Senator ROUNDS. Thank you, Mr. Chairman. 

Chairman ISAKSON. Thank you, Senator Rounds. Good analogy, 

by the way. 

Senator Boozman. 

HON. JOHN BOOZMAN, U.S. SENATOR FROM ARKANSAS 

Senator BOOZMAN. Thank you, Mr. Chairman, and thank you all 

so much for being here. We are glad that things are going better 

in Little Rock. 

Dr. CLANCY. I will never make that mistake again. 

Senator BOOZMAN. I bet. [Laughter.] 

Dr. CLANCY. I am going to send Senator Sullivan a note, but—— 

Senator BOOZMAN. No—— 

Dr. CLANCY [continuing]. But things are better in Little Rock. 

Senator BLUMENTHAL. You have helped to lighten our meeting 

significantly. Thank you for—— 

[Laughter.] 

Senator BOOZMAN. Thank you very much. In the GAO report, one 

of the reasons that VHA ended up on the High-Risk List is because 

of ambiguous policies and inconsistent processes, which is interesting. I think all of us feel like we need to bring to all of you the 

things that we are hearing out in the field; and one of the complaints that I hear most often is that VA has no standardized processes for reimbursing claims. You are kind of hearing the same 

thing over and over. 

It is really difficult if you are in an area where you are across 

borders and across VISNs or however we designate things now, but 

you will have one method of handling things in Memphis. You will 

have another in Jackson, MS. You will have another in Little Rock. 

It really does get confusing. So, that is something I think we really 

need to look at and I would appreciate it if you would look at 

standardizing those kind of things. 

Again, these are things that do not cost money. These are things 

that will save you time and save the practitioners. 

The other problem is that, I think, practitioners get hung up. I 

am sure it is true in the VA, with VA practitioners, like if you are 

on the phone for 2 hours trying to figure out what is going on, trying to figure out where a claim is at. Is there a way to, perhaps 

using some sort of identification, taxpayer number or whatever, to 

do that electronically, where you could get in a situation where you 

could go online and figure out where you are at as far as—— 

Dr. CLANCY. First, we are trying—— 

Senator BOOZMAN [continuing]. Medical claims? 

Dr. CLANCY [continuing]. We are working very hard now to 

standardize these processes, and I think you are all aware that we 

have about five different paths to helping veterans get care in the 

59 

community, which is a little bit part of the problem. It is not the 

sole problem. Some of the original problem is not having standard 

processes at every facility. 

It is further complicated by the fact that we have got the resources offered by Choice, which is terrific, the PC3 contract, 

Project ARCH in some areas, traditional non-VA care, and some 

other agreements with our affiliates and so forth. It is a pretty 

messy puzzle, not a script you would write from scratch. 

I think that we are going to look forward to working with all of 

you to look for opportunities to streamline that, because in the end, 

if you have got five different ways to do something built into the 

process before you even start getting with claims, you are more 

likely to increase the probability of error. It is almost a law. 

We are working very hard on standardizing how we pay those 

claims right now. That is not going to be fixed immediately, but I 

have got some of our very best people on this, and as I noted earlier, we have our senior leaders in D.C. this week. We were working about this into the evening last night. It is a huge challenge 

with us. 

We embrace the opportunities to do the best by veterans when 

we see them in our system, but also to take advantage of local capabilities. We need to have business processes that support it and 

that is not what we have had. So, I will leave it at that. 

Senator BOOZMAN. No, and I appreciate that, and it is difficult. 

Another thing that we hear is that, and I think Senator Rounds 

mentioned it in the sense of you have policies, you have directives, 

and sometimes you have situations where perhaps employees feel 

like that that is not appropriate there and kind of go around. And, 

the other side of that is we want people to have local control, which 

I understand is really difficult. 

With whistleblowers we have a situation now that reports of retaliation and things like that. Can you all address that and talk 

to us a little bit about what is going on in that regard. Certainly, 

you want people to come forward without the problem of 

retaliation. 

Dr. CLANCY. Yes. I will say that the Secretary has been incredibly crystal clear from day one, and Sloan Gibson before him, when 

he was Acting Secretary, that retaliation will not be tolerated. 

I will go further and say there is no health care organization in 

this country or anywhere in the world that can actually provide 

safe care without whistleblowers. Now, I am using a small ‘‘w’’ 

here, OK. But, if people are not coming forward and saying, we 

have a problem, I am seeing a problem, there is a leak over here. 

In fact, if people are not actively looking for error all the time, you 

will never get to care that is reliable and safe. 

Nuclear industries run like this, right. They are constantly looking for, where are we going to have a problem and anticipating 

them ahead of time. That is where we have got to get to. 

In that context, whistleblowers are heroes, which is why some of 

our executives have actually gone to ceremonies celebrating them 

and so forth. 

I think we are not retaliating and we are cooperating fully with 

investigations of those who have been accused of retaliating. I 

know that Senator Blumenthal had a lot of questions about this. 

60 

Some of these investigations are still ongoing. But, appropriate discipline can be taken, I can assure you. 

Senator BOOZMAN. Can I, with your permission, just to follow up 

with that. 

Dr. CLANCY. Sure. 

Senator BOOZMAN. In the bill that we passed, we gave you the 

ability to retaliate against people that were not acting appropriately, in the sense of giving you the ability to get rid of people 

that were not working out. Do we need to—that was at the top. I 

know Senator Rubio and Congressman Miller have introduced bills 

to make it such that a lower level, that you have more flexibility 

in that regard, again, those people that are not working out. Do 

you support that, so that we can deal with some of the problems 

like retaliation? 

Dr. CLANCY. We have discussed this with the Secretary and so 

forth. We are very uncomfortable with anything that would single 

out VA as opposed to other Federal departments because it might 

impair our ability to recruit. 

I think that we welcome the flexibility that you gave us when 

you passed the Choice Act because it does not eliminate due process but encourages to speed up the process. Due process does take 

some time. Again, that balance between if people feel like if they 

wave their hands and raise their hands, excuse me, and say, we 

have got a problem, that they do not need to fear being punished. 

That is the balance that we are—it is very dynamic and that is 

what we are struggling for. 

So, I know that some people who work in VHA do not feel that 

safe right now at the senior leader level. I am not sure that making 

that more widely available would necessarily be helpful. 

Senator BOOZMAN. Thank you, Mr. Chairman. 

Chairman ISAKSON. Thank you, Senator Boozman. 

Senator Blumenthal had a follow-up question. 

Senator BLUMENTHAL. You just mentioned, Dr. Clancy, that 

there will be disciplinary measures. When will there be—— 

Dr. CLANCY. We are waiting for the results of investigations to 

conclude. I know, for example, in Phoenix that there are multiple 

investigations going on right now. By design, many of these are 

being done by the Office of the Inspector General. We are waiting to 

hear from them. I cannot give you a specific timeline except to say 

that when we get those results, we will act as swiftly as we can. 

Senator BLUMENTHAL. Dr. Daigh, when will the investigations be 

done? 

Dr. DAIGH. I think the best answer I can give you, sir, is that 

there is a process in place to work through AUSAs and to move forward according to the rules that we normally deal with for criminal 

complaint. 

Senator BLUMENTHAL. By AUSAs, you mean—— 

Dr. DAIGH. Assistant U.S.—— 

Senator BLUMENTHAL [continuing]. Assistant U.S. Attorneys. 

Dr. DAIGH. That is correct, sir. But, I—— 

Senator BLUMENTHAL. But, they do not prepare reports. 

Dr. DAIGH. I believe that we take our reports to them to seek 

whether or not they will attempt to prosecute an individual. 

61 

I think it best that the investigators get back to you in a written 

response. 

Senator BLUMENTHAL. Have those reports been submitted to the 

AUSAs? 

Dr. DAIGH. I cannot speak to all of them, but I know that some 

have. I am aware that some have, yes. 

Senator BLUMENTHAL. Well, let me again ask you what the 

timeline is for their consideration. How long have those investigations been ongoing? 

Dr. DAIGH. Sir, I will have to get back with you for the record. 

I simply do not work in that area non-stop. I will say that at every 

staff meeting we have within the Inspector General’s office, we get 

an update on numbers of how many reports are where, and I know 

that there are a number of them with AUSAs. 

Senator BLUMENTHAL. I really do appreciate your offer to provide 

me with information, but, quite bluntly, the American people deserve this information, not just Members of Congress in a private 

briefing setting or in a written response. The American people deserve to know who will be held accountable, why the investigations 

have not been completed, what is going to be done to expedite 

them. Justice needs to be sure, swift and sure, especially when it 

comes to danger of people’s lives. Both you and Dr. Draper have 

indicated that lives were at risk and maybe even lost as a result 

of potential wrongdoing in Phoenix and in 1992 or 1993, other situations around the United States. 

So far, we have been discussing only Phoenix, and the reports, 

investigations there are not even complete yet. Am I correct? 

Dr. DAIGH. I am uncertain exactly about the investigations—— 

Senator BLUMENTHAL. Dr. Clancy is nodding her head, which, I 

think, is—— 

Dr. DAIGH. I believe her, but I am not certain on that fact. But, 

sir, I believe that all of us want this to be done as far as we can. 

There is no—— 

Senator BLUMENTHAL. I am sure you do want it to be done as 

quickly as possible. We all want it to be done as quickly as possible. The question is when it will be done. 

Let me just ask one last question. There have been various proposals to take a billion dollars from money that was allocated to 

the accessibility and Choice program in order to pay for completion 

of the Denver medical facility. My belief is that taking this billion 

dollars from the Choice program would make it far more difficult 

and unlikely for the VA to be removed from the High-Risk List. 

Does anybody disagree? 

Let me interrupt myself to call on Dr. Daigh. 

Dr. DAIGH. Sir, the only thing I can say is I am not sure that 

we have studied that question, so I—— 

Senator BLUMENTHAL. You are not disagreeing, then. 

Dr. DAIGH. I am not disagreeing. 

Senator BLUMENTHAL. Does anyone disagree? Dr. Draper. 

Ms. DRAPER. Well, I will say we have specific criteria for removal 

from the High-Risk List; and we do have, in response to Senator 

Tillis, I think, a good framework for how agencies address getting 

off the High-Risk List. 

62 

Senator BLUMENTHAL. Well, let me put the question a different 

way. Detracting from the objectives of the Choice program by diverting a billion dollars will make it far more difficult and unlikely 

that the VA will meet those criteria, is that correct? Dr. Clancy. 

Dr. CLANCY. If I could just provide some specific details. The Choice resources are sort of two big buckets, right. One is the $10 

billion for the actual purchasing care in the community and the 

other is $5 billion really focused on enhancing our capacity. 

Most of our facilities, when asked about their acute needs, actually front-loaded their requests from that $5 billion for construction. Most were not for new facilities, but mostly for non-recurring 

maintenance, renovation, and so forth, which goes on all the time 

in the hospital and health care industry, right. The proposal is that 

a portion of that would be slowed down. It would not inherently affect our capacity in terms of increasing space and hiring people 

who need to see patients. 

I take your point, but I want to say that—— 

Senator BLUMENTHAL. Dr. Clancy—— 

Dr. CLANCY [continuing]. We have a very strong commitment to 

get off this High-Risk List, but at the same time, I think Denver, 

the facility there, and what is the right thing to do for veterans 

and the public is also pretty imperative. 

Senator BLUMENTHAL. Would it not affect the quality of care? 

Dr. CLANCY. In most instances, slowing down the construction, 

renovation, and so forth would not necessarily impact the quality 

of care. 

Senator BLUMENTHAL. Not necessarily, but I can tell you in the 

instances where I know and I have talked to my colleagues—— 

Dr. CLANCY. Yes. 

Senator BLUMENTHAL [continuing]. It would have an impact on 

quality of care. We are talking about in the Westhaven facility in 

New Haven—— 

Dr. CLANCY. Yes. Mm-hmm. 

Senator BLUMENTHAL [continuing]. Primary care. 

Dr. CLANCY. Yes. 

Senator BLUMENTHAL. I would like to know from you, and you 

do not have to do it now—— 

Dr. CLANCY. OK. 

Senator BLUMENTHAL [continuing]. You can provide it in written 

form—— 

Dr. CLANCY. I will give you an informed, thoughtful response. 

Senator BLUMENTHAL. Thank you. 

I want to thank all the witnesses for your very informative and 

helpful comments today. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. Thank you, Ranking Member Blumenthal. 

I would just end by saying this, that I think within these recommendations and findings of GAO and the Inspector General, 

there are savings and there are funds that could be used to pay for 

things that the VA needs to pay for without us just adding onto 

the burden. I think Senator Blumenthal makes an outstanding 

point, and I told Sloan Gibson in Denver that when the recommendation comes to the Committee as to how we pay for the billion-dollar overrun, if there is not contribution from within the 

63 

1GAO, Determining Performance and Accountability Challenges and High Risks, GAO–01– 

159SP (Washington, DC: November 2000). 

operational budget of the VA itself, I do not know how we are ever 

going to get any money done to do it whatsoever. I hope as they 

look to build that, they will find those funds internally to the extent possible without damaging the VA. 

With that said, I want to thank all our people for testifying. 

Thank you for being here, and I thank Senator Tillis for volunteering to be my Committee Chairman, and Karen, thank you for 

being so willing to be voluntarily volunteered for a task. 

This meeting stands adjourned. 

[Whereupon, at 3:58 p.m., the Committee was adjourned.] 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. JOHNNY ISAKSON TO

DEBRA A. DRAPER, DIRECTOR, HEALTH CARE, U.S. GOVERNMENT ACCOUNTABILITY

OFFICE

Question 1. A number of factors are considered in evaluating whether any Federal 

department, agency, or program should be placed on the High Risk List. Please describe the procedures, process, and people involved in the Government Accountability Office to determine whether a Federal program is placed on the List. 

Response. Many individuals within GAO with expertise in various Federal policy 

areas, including the Comptroller General, are involved in the process of evaluating 

whether specific programs or functions should be included on the High Risk List. 

Affected agencies and departments are not solicited for their agreement to be placed 

on the list, nor do they ask to be placed on the list. Rather, the decision to add areas 

to the High Risk List is a determination made solely by GAO based on comprehensive analyses and quality assurance reviews. 

To determine which Federal Government programs and functions should be included on the High Risk list, we use our guidance document, Determining Performance and Accountability Challenges and High Risks.1 In making this determination, 

we consider: 

• whether the program or function is of national significance or is key to performance and accountability; • qualitative factors, such as whether the risk involves public health or safety, 

service delivery, national security, national defense, economic growth, or privacy or 

citizens’ rights; or, could result in significantly impaired service, program failure, injury or loss of life, or significantly reduced economy, efficiency, or effectiveness; • the exposure to loss in monetary or other quantitative terms—at a minimum, $1 billion must be at risk in areas such as the value of major assets being impaired; 

revenue sources not being realized; major agency assets being lost, stolen, damaged, 

wasted, or underutilized; potential for, or evidence of improper payments; and presence of contingencies or potential liabilities; and, 

• corrective measures planned or under way to resolve a material control weakness and the status and potential effectiveness of these actions—if effective solutions will not be completed in the near term and resolve the root causes of the problem, we determine that the program or function is high risk. 

The process for determining whether VA health care should be designated high 

risk began months before GAO issued its 2015 high risk series update. In making 

the determination to add VA health care to the High Risk List in 2015, a number 

of specific factors were considered. In recent years, we have made numerous recommendations that aim to address weaknesses in VA’s management of its health care 

system—more than 100 of which have yet to be fully implemented. After analyzing 

the findings of GAO’s work on VA health care completed over the past five years, 

we categorized our concerns about VA’s ability to ensure the timeliness, cost-effectiveness, quality, and safety of the health care the department provides into five 

broad areas: (1) ambiguous policies and inconsistent processes, (2) inadequate oversight and accountability, (3) information technology challenges, (4) inadequate training for VA staff, and (5) unclear resource needs and allocation priorities. 

Once the determination was made to add VA health care to its High Risk List, 

GAO briefed the relevant Congressional committees of jurisdiction. Just prior to the 

publication of the 2015 High Risk List, GAO officials met with and informed VA officials—including the VA Secretary and Under Secretary for Health—that VA health 

care was being added to the list. 

64 

2See, for example, Department of Veterans Affairs, Office of Inspector General, Healthcare Inspection Gastroenterology Consult Delays William Jennings Bryan Dorn VA Medical Center Columbia, South Carolina, Report No. 12–04631–313. (Washington D.C.: September 6, 2013), and 

Department of Veterans Affairs, Office of Inspector General, Healthcare Inspection Consultation 

Mismanagement and Care Delays Spokane VA Medical Center Spokane, Washington, Report No. 

12–01731–284. (Washington D.C.: September 25, 2012). 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. DAN SULLIVAN TO

DEBRA A. DRAPER, DIRECTOR, HEALTH CARE, U.S. GOVERNMENT ACCOUNTABILITY

OFFICE

Question 1. Dr. Draper, the VA and the VHA are getting beaten up a lot in the 

media and in Congress. While a lot of aggressive oversight is justified, a group of 

people can only take so much of this type of oversight before they become timid and 

simply check the box to not get in trouble. This is not the type of culture we want 

at the VA. What suggestions do you have to improve the culture at the VHA and 

the VA as a whole? 

Question 2. Dr. Draper, what suggestions do you have to actually encourage innovation and new ideas? 

Question 4. Dr. Draper, how can we create excellence at the VA? 

Response. We provide a combined response to questions 1, 2 and 4, as all three 

questions deal with VA organization, performance, and opportunities for improvement. 

VHA’s mission states, ‘‘Honor America’s veterans by providing exceptional health 

care that improves their health and well-being.’’ However, risks to the timeliness, 

cost- effectiveness, quality, and safety of veterans’ health care, along with other persistent weaknesses identified by GAO, VA’s Office of the Inspector General, and others in recent years have not only raised concerns about VA’s management and oversight of its health care system, but also increased awareness of the magnitude and 

pervasiveness of the issues. Over the past few years there have been numerous reports of VAMCs failing to provide timely care, including specialty care, and in some 

cases, the delays have reportedly resulted in harm to veterans.2

In addition to its responsibility to those veterans it serves, VA also has a fiduciary 

responsibility to the American people to ensure that taxpayer dollars are spent 

properly. Congress has provided steady increases in VA’s annual health care budget 

with amounts increasing from $23.0 billion to $55.5 billion between fiscal years 2002 

and 2013. Additionally, the Veterans Access, Choice, and Accountability Act of 2014 

provides $15 billion in new funding for, among other things, the use of non-VA clinicians to provide care for those veterans faced with access challenges, including those 

related to lengthy travel distances and long wait times. 

To address these issues and help improve the department’s culture, encourage innovation, and create excellence, I suggest VA consider the following resources. First, 

GAO’s five criteria for removal from the High Risk List provide an excellent framework for performance improvement, while also addressing the relevant high-risk 

issues for VA. The following are the five criteria for removal: 

• Leadership commitment. Agency leadership has demonstrated strong commitment and support. 

• Capacity. Agency has the capacity (i.e., people and resources) to resolve the 

risk(s). 

• Action plan. Agency has developed a corrective action plan that defines the root 

cause(s), identifies solutions, and provides for substantially completing corrective 

measures, including steps necessary to implement solutions we recommended. 

• Monitoring. Agency has instituted a program to monitor and independently validate the effectiveness and sustainability of corrective measures. 

• Demonstrated progress. Agency has demonstrated progress in implementing corrective measures and in resolving the high-risk area. 

Second, VA could seek to learn from the experiences of other agencies and program areas that have been successfully removed from, or are making progress toward removal from GAO’s High Risk List. For example, the National Academy of 

Public Administration recently sponsored a discussion on the opportunities and 

challenges of being on GAO’s High Risk List, by a panel of participants representing 

agencies and programs that have been included on, or have been removed from the 

list. At the discussion, one official said the agency she represented used a portfolio 

management system to prioritize risks for leaders, which helped the program to be 

removed from the High Risk List. Another agency official with programs currently 

on the High Risk List said his office was planning to launch an exchange program 

to gather ideas by giving employees experiences in other offices. 

65 

3See for example, http://www.nist.gov/baldrige/about/performance—excellence.cfm. 

Third, VA could consult organizational performance literature and research, 

which commonly identify several key characteristics of highly effective, excellent, 

and innovative organizations. These include the following: 

• Well defined and compelling mission, purpose, and expected results 

• Clear and visible commitment to excellence 

• Customer/client-centric 

• Efficient and effective infrastructure, systems and processes 

• Effective management of resources, including attracting and retaining a highly 

qualified workforce 

• Empowered workforce, including open, trusting, and multi-directional communications 

• Flexible and adaptable in an ever changing environment 

• Emphasis on continuous learning 

Finally, a number of programs are available to assist organizations in achieving 

performance excellence. One such program is the Baldrige Performance Excellence 

Program, which is administered by the Department of Commerce’s National Institute of Standards and Technology, in conjunction with the private sector. The 

Baldrige Criteria for Performance Excellence—used by organizations around the 

country, including health care organizations—provide a framework and tool to assess organizational strengths and weaknesses, to identify opportunities for improvement, and to create a plan for moving forward.3 According to the Baldrige Program, 

‘‘performance excellence refers to an integrated approach to organizational performance management that results in: (1) delivery of ever-improving value to customers 

and stakeholders, contributing to organizational sustainability; (2) improvement in 

overall organizational effectiveness and capabilities; and, (3) organizational and personal learning.’’ In addition to the Baldridge Program, other entities, such as the 

Institute for Healthcare Improvement and the Joint Commission, also offer programs that focus on health care organizations’ performance improvement. 

Question 3. Dr. Draper, what authorities can Congress give you to help these innovations and ideas cut through the existing VA and VHA bureaucracies? 

Response. GAO has adequate audit authority to continue to provide robust oversight of VA. To help ensure VA takes the necessary actions to improve health care 

for the Nation’s veterans, congressional attention and oversight is critical. In the 

spring and summer of 2014, congressional committees held more than 20 hearings 

to address identified weaknesses in the VA health care system. Sustained congressional attention to these issues will help ensure that VA continues to make progress 

in improving the delivery of health care services to veterans. This includes continued congressional oversight of VA’s progress made on implementing recommendations made by GAO, VA’s Office of the Inspector General, and others. As part of this 

ongoing oversight, it would also be beneficial for Congress, as well as GAO, to receive periodic updates (e.g., quarterly) from VA on its progress in addressing the 

five areas of concern that led to its health care system being placed on the High 

Risk List. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. RICHARD BLUMENTHAL

TO CAROLYN M. CLANCY, M.D., INTERIM UNDER SECRETARY FOR HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 1. Dr. Clancy, during your testimony we discussed the issue of delayed 

construction and maintenance projects and their potential negative effects on quality of care. While you stated that delaying improvement projects would not necessarily have an impact on quality of care, I am concerned that delaying necessary 

improvement and maintenance for Veterans Health Administration facilities would 

have long-term effects on the level of care that is delivered to veterans, and the ultimate costs to maintain the facility. For instance, the Administration has recently 

suggested delaying an improvement project for the primary care clinic at the West 

Haven VAMC. I have visited that facility many times and I am convinced that veterans, and particularly women veterans, need a new primary care clinic that meets 

their health care needs. 

a. Can you please tell me how VA plans to ensure that delays in construction and 

maintenance projects do not negatively affect patient care? 

Response. The West Haven project was submitted and approved through VA’s FY 

2014 Strategic Capital Investment Planning (SCIP) process. This project was deVerDate Mar 15 2010 14:19 Aug 10, 2016 Jkt 000000 PO 00000 Frm 00069 Fmt 6633 Sfmt 6621 Z:\ACTIVE\042915.TXT PAULIN
66 

layed due to scope changes. The design contract for the project is scheduled to be 

awarded this month. 

VA will ensure that delays in construction and maintenance projects do not adversely affect patient care by utilizing the many capabilities at our disposal, such 

as; expanded hours, telehealth, and care in the community. These capabilities will 

allow us the flexibility we need to ensure that Veterans receive the quality and 

timely care that they rightfully deserve. 

b. Are there any specific actions VA will take to alleviate any identified gaps in 

care? 

Response. VA continually looks for gaps in care by tracking and closely monitoring facility and network capacity. In response to the recent crisis of Veteran access, senior leaders from across the department gather daily to focus on improving 

Veterans’ access to care, thereby alleviating gaps in care. We have concentrated on 

key drivers of access, including increasing medical center staffing by 11,000, adding 

space, boosting care during extended hours and weekends by 10 percent and increasing staff productivity. This focus on capacity creates organizational opportunities to leverage choice and virtual care. We currently have ongoing pilots and programs, such as My HealtheVet, to operationalize these plans and create opportunities to identify potential gaps in a Veterans care. 

c. Please tell me what steps VA plans to take to minimize the impact of delayed 

minor construction and nonrecurring maintenance on the condition of its facilities? 

Response. If any minor construction or NRM projects that were originally to be 

funded through Section 801 of the Choice Act are delayed, VA will work to restore 

funds for the delayed project(s) in either fiscal year (FY) 2016 or FY 2017. In an 

effort to mitigate the impact to Veterans due to the potentially delayed projects, VA 

will work to ensure that access is provided through other avenues within VA and 

also within the community. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. JOHN BOOZMAN TO

STEPHEN W. WARREN, EXECUTIVE IN CHARGE AND CHIEF INFORMATION OFFICER, 

OFFICE OF INFORMATION TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 1. Does the VA currently have an interoperable pharmacy data transaction system that is interoperable with the Department of Defense? 

Response. DOD and VA do have interoperability for pharmacy data and currently 

exchange pharmacy data on Veterans. Both departments store or map the data to 

nationally accepted standards. This enables each to interpret and compute the other’s data without risk of ambiguity. 

VA does not yet have the capability to send prescriptions to DOD for dispensing 

or to receive prescriptions from DOD. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. DAN SULLIVAN TO

CAROLYN M. CLANCY, M.D., INTERIM UNDER SECRETARY FOR HEALTH, VETERANS

HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS

SERIOUSNESS OF THE LIST AND IT’S NOT JUST ABOUT GETTING OFF THE LIST

Question 1. How seriously is the VA and VHA taking being on the GAO’s High 

Risk List? 

Response. VA takes its inclusion on the GAO High Risk List extremely seriously 

and recognizes that we have a distinct opportunity to address these challenges 

across the system. This will require us to seek collaboration opportunities throughout the Department and in the community. We are committed to instituting long 

term durable solutions and sustained improvement in the high risk areas identified. 

As we implement corrective measures, we will provide GAO with documentation of 

our progress. Additionally, we will seek input from GAO and OIG to ensure that 

our actions are meeting the intent of their recommendations. We look forward to 

substantial improvement and completing the recommendations which they have 

identified. 

Question 2. What specifically should the VHA do to not just get off this list, but 

to make the VHA a healthcare solution that Veterans want? 

Response. VHA has established a Blueprint for Excellence that offers a detailed 

vision for the evolution of health care services provided by VHA. The Blueprint provides guidance for the alignment of resources to transform VHA from being provider-centric to Veteran-centric; with specific strategies that offer a pathway to address GAO’s five high risk areas. Addressing these strategies is a fundamental part 

67 

of VHA Senior Leaders performance plans. The Blueprint for Excellence will allow 

for Health Care that simultaneously address improving the performance of VHA 

healthcare, developing a positive service culture, transitioning from ‘‘sick care’’ to 

‘‘health care’’ in the broadest sense, and developing agile business systems and management processes that are efficient, transparent and accountable. 

The Blueprint for Excellence aligns with several of the GAO high risk areas by 

emphasizing what VHA must do to become the system that Veterans deserve, and 

secondarily helping VA get off the GAO High Risk list: 

• Improving performance, 

• promoting a positive culture of service, 

• Advancing healthcare innovation for Veterans and the country, and 

• Increasing operational effectiveness and accountability. 

VHA has developed specific actions to get off the High Risk List, using the Blueprint for Excellence as the vehicle. Regarding national policy and processes, VHA is 

integrating our policy and operational leaders across business lines, such as primary 

care, surgical care and mental health, which will align policy development with implementation. Health care is a dynamic industry, and our policies must be flexible 

enough to accommodate evolving standards for clinical care and clinical judgment. 

We will continue to improve our processes and implementation of policies to address 

GAO and OIG findings, and ensure VHA provides timely high quality care to all 

Veterans. 

With respect to oversight and accountability, VHA restructured the Office of the 

Medical Inspector (OMI) into an integral element of VHA’s oversight and compliance 

program. Responsible for assessing the quality of VA health care through site-specific investigations and system-wide assessments, OMI reports directly to the Under 

Secretary for Health. OMI’s policies and procedures were revised to ensure that 

health care quality and patient safety remain a primary and constant focus. 

Concerning information technology, VA is modernizing our Electronic Health 

Record (EHR), VistA, which is the most widely used EHR in the United States. VA 

is also developing a new web based Enterprise Health Management Platform, or 

eHMP. We will continue to share health care data on millions of Servicemembers 

and Veterans with the Department of Defense and our community partners in compliance with all relevant privacy laws. 

Human capital training is critical to ensure Veterans receive safe care. Our frontline providers need to have effective training on VHA’s national policies and procedures. They must also be capable of using VHA’s tools for monitoring health care 

delivery. We need our training to empower employees and make it easy for every 

employee to do the right thing every time. 

Concerning resource needs and allocation priorities, VHA is moving forward with 

implementing an enterprise-wide planning, programming, budget and execution program that will ensure our medical care planning and prioritization drives our budget request and execution. Using this program, we will be able to prioritize resource 

needs and budget for effective implementation of national policies and procedures, 

including budgeting for training and human capital. 

EXPORT TELEMEDICINE FROM ALASKA TO THE U.S. 

Question 3. Dr. Clancy, Alaska is home to the highest per capita population of veterans in the country. As of August 2014, Alaska had nearly 75,000 veterans, nearly 

one-tenth of our population. Alaska also is about two and half times the size of 

Texas, with over 663,000 sq. miles of area. Because of the amount of area in Alaska, 

my state leads the Nation in telemedicine and telehealth delivery, ensuring that 

Alaskan, wherever they are, receive the best quality and most cost-effective treatment possible. In fact, one area where Alaska is breaking the mold where many native veterans who live in bush Alaska no longer have to take multiple days off to 

fly into Anchorage to see their doctor and can instead VTC with their doctor from 

their local health clinic. While I troubled by GAO’s Report which cite a 9-year, $127 

million failed attempt to upgrade the VA’s scheduling software and an longstanding 

failure to integrate Electronic Health Records for VA and the Department of Defense, I like to see the glass a half full. In this case, a half full glass is that there 

is a lot of room for improvement with the right investments and a culture that is 

willing to think outside the box. Alaska’s exports many things to the U.S. are famous, including oil., salmon, and minerals. Dr. Clancy, how can the VHA take what 

is being done in Alaskan telemedicine and telehealth and export it to the Lower 48? 

Response. VHA strives to continually look across all systems for best practices. 

Fortunately the Alaska VA system has been a source of inspiration across the VHA 

system in regards to telehealth and telemedicine. We must use the examples from 

68 

the Alaska VA system to focus on providing care when and how the Veteran needs 

it. 

VHA is recognized as a world leader in the development and use of telehealth. 

More than 717,000 Veterans accessed VHA care through telehealth in fiscal year 

(FY) 2014, 45 percent of these Veterans live in rural or highly rural areas. The FY 

2014 total for Veterans using telehealth represented an 18% growth from the year 

before. Telehealth services provide access to health care in more than 45 different 

specialty areas, including areas in which VHA has particular expertise that may not 

be available from the local community health care provider. 

The Alaska VA Healthcare System based in Anchorage has progressive clinical 

and executive leadership who maximize the use of telehealth to meet the specialized 

needs of our Veterans in Alaska. For example, Alaska’s Veterans access VHA care 

through Teledermatology, Teleretinal imaging for annual screening for diabetic retinopathy eye disease, Home Telehealth for monitoring and management of chronic 

conditions like diabetes, chronic obstructive pulmonary disease, and congestive 

heart failure. Veterans in Alaska use clinical video telehealth to access their Primary Care Providers based in Colorado and Florida, and Patient Aligned Care 

Teams (PACT) based in Idaho at the Boise Primary Care Hub. The PACT multidisciplinary teams include social workers, clinical pharmacists, mental health and 

primary care providers. All of the Alaska VA Healthcare System’s CommunityBased Outpatient Clinics (CBOC), located in in Kenai, Fairbanks, and the Mat-Su 

clinic in Wasilla, offer telehealth services. In some instances Veterans in the CBOC 

use telehealth to access care from providers at the main Medical Center, and sometimes they access care from providers at another CBOC. Last fiscal year in Alaska 

more than 1,800 Veterans accessed VHA care through telehealth, and more than 

330 Veterans benefited from Home Telehealth. VA’s Alaska Healthcare System is 

able to share its most successful telehealth strategies with the other 150 VA medical 

centers and 800 CBOCs across the country. These best practices are conveyed 

through the 15 year old VHA Telehealth Community which uses multiple methods 

to share information including weekly Program Manager conference calls, monthly 

National Forums, quarterly newsletters, and annual conferences. 

The ability to collaborate with the Native Healthcare Systems, local community 

resources, and DOD has led to success in providing access to Alaska’s Veterans. The 

use of telemedicine within Alaska and with VA facilities in other states has provided access to Veterans in multiple communities located across the vast Alaskan 

terrain. These relationships are crucial to ensure the health care needs of Alaska’s 

Veterans are met. 

In 2011, a policy decision from VA Central Office required the Alaska VA to provide healthcare services within the state whenever available rather than transferring Veterans to VA facilities in Seattle or Portland for care. Each Veteran was 

given the option for local care in the private sector, or referral to other VA facilities. 

Only rarely have Veterans chosen to travel to Seattle or Portland VA for care. The 

Alaska VA Healthcare System has a strong program in place to coordinate private 

sector care. Additional staff were added to ensure coordination of care and that Veterans’ needs were being met. For example, with the increase in oncology care being 

provided in state, the Alaska VA established an oncology team to ensure the requirements for care purchased in the community was well defined and accomplished. 

In August 2013, the Alaska VA began purchasing primary care in the community. 

This was due to high turnover and the inability to hire new providers despite the 

use of recruitment incentives. The shortage of primary care providers led to increased wait times for Veterans. Working with community providers and Native 

Healthcare Organizations, the Alaska VA was able to obtain primary care services 

for those Veterans who had been waiting the longest for care. As new Veterans applied for care, the Alaska VA continued to use these community providers to obtain 

timely primary care. Also, through 26 sharing agreements, care for Native and NonNative Alaska Veterans living in rural Alaska was purchased across the state. 

Tanana Chief Conference in Fairbanks and South Central Foundation in Mat Su 

Valley have the largest number of Veterans receiving primary care at their facilities. In addition, VA entered into contracts with multiple private sector healthcare 

organizations in order to meet the access requirements of Veterans. Staff members 

were assigned to function as liaisons with specific community providers. Positive 

feedback has been received from Veterans referred to these organizations. There is 

ongoing communication across multiple levels of the Alaska VA -from Executive 

leadership to frontline staff. Extensive care coordination between VA and these community healthcare organizations is required and a continual VA presence to ensure 

continuity of care and issue resolution. That continuity is provided through VHA’s 

Integrated Care Service. Due to the large number of Veterans referred to South 

69 

Central Foundation (SCF) in the Mat Su Valley, several VA employees are assigned 

to work with SCF to ensure consults are managed efficiently and appropriate medical record information is exchanged. To ensure ongoing communication, planning 

and conflict resolution is critical for the Alaska VA Chief of Staff and the Chief of 

the Chief of Integrated Care Services. These relationships have developed over several years of frequent interactions, face-to-face dialog and understanding of cultural 

sensitivities. 

Another important component of the Alaska VA Healthcare System’s success is 

the establishment of a robust rural outreach team made up of administrative and 

clinical staff. This group has ongoing contact with rural communities including tribal leaders, healthcare organizations, community elders and Veterans. Over 200 volunteers have been trained as Tribal Veteran Representatives and function as liaisons between VA, Veterans, and rural health organizations. 

The Alaska VA also has a sharing agreement with the 673rd DOD/VA Joint Venture hospital in Anchorage for emergency care, urgent care, and inpatient care to 

include Intensive Care unit. By using the military resources as a right of first refusal for specialty care, the sharing of health care resources provides VA a cost effective resource for specialty care needs. 

In addition, teleprimary care providers located in Boise, ID; Bay Pines, Florida; 

and Denver, Colorado are used to provide care for Anchorage Veterans. This augments care and serves as a bridge during provider shortages. Veterans receiving 

teleprimary care have expressed high levels of satisfaction with the care received. 

ALASKAN WAIT TIME SUCCESS AND TRANSLATING FURTHER

Question 4. Dr. Clancy, in figures recently compiled by the Associated Press showing a snapshot of in time wait time information for 940 VA hospitals and outpatient 

clinics nationwide, the shows that ‘‘an average of less than 1 percent of completed 

appointments at the Anchorage outpatient clinic—0.90 percent—involved delays of 

at least 31 days from the veteran’s preferred appointment date during that period. 

In fact, averages were lower at facilities in Wasilla, Fairbanks and Kenai.’’ Nationally, about 2.8 percent of completed appointments involved delays of more than 30 

days. In sum, Alaska has less than 1% of veterans waiting over 30 days when over 

20% of the state’s population lives in rural areas, many of which are hundreds of 

miles from VA facilities. Can the VHA use some of what is being done in the Alaska 

VA system and use it as a model to help other areas of the U.S.? What specific lessons can be learned from Alaska? 

Response. A primary strength of the Alaska VA Healthcare System is its success 

in establishing strong relationships with community providers. Through these relationships VA is able to provide accessible, timely, coordinated, and high quality care 

for Veterans. VA community providers include DOD and the Native Healthcare Organizations, as well as multiple community providers and smaller health care systems across the state. The ability of the Alaska VA System to use purchased care 

is based upon the knowledge that relationship-building and open communication are 

the key to instill a common mission and shared vision among all providers and 

stakeholders. To strengthen relationships in the community, the Alaska VA 

Healthcare System will assign specifically trained VA staff to work with the provider’s health care facility, thereby encouraging frequent face-to-face contact and 

close communication. Open dialog engenders mutual trust and empathy, promoting 

a shared mission with a focus on ICARE values, which then can be better actualized 

by community providers as well by the health care team at the VA facility. This 

‘‘one standard of care for all Veterans’’ concept is an expectation of all community 

providers of the Alaska VA Healthcare System and promotes excellent access, continuity, and care coordination. Positive feedback has been received from Veterans, 

whether receiving care in the community or at their VA facility. Seamless integration of care between VA and community providers, facilitated by a strong foundation 

of trust and a sense of shared mission, enables the Alaska VA to provide the needed 

care for Veterans efficiently and effectively. 

The Alaska VA’s approach has important implications for VA care at sites in other 

states. A close and transparent network between the VA and surrounding community health care providers can improve access, continuity, care coordination and 

overall quality of care. VA and community health care networks can be best created 

through proactive efforts to facilitate close communication and relationship building. 

VHA anticipates and welcomes a future of close cooperation between VA and community health care programs. The goal is to develop a network of coordinated, integrated health-related services that provide seamless care for all Veterans. 

Question 5. Dr. Clancy, what suggestions do you have to help create a culture at 

the VA that rewards this type of achievement—even incentivizes it—so that the VA 

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and VHA do not end on the GAO’s high risk list AND more importantly, so that 

our veterans get the care they have earned? 

Response. In order for VHA to be successful we must ensure that Veteran outcomes are always our priority; In order to do this, we must look for a uniform platform with local components that celebrates innovation across the organization. This 

is accomplished through the Secretaries ‘‘MyVA’’ initiative. As a part of ‘‘MyVA’’ we 

have begun to actively solicit employees to provide process improvement ideas and 

to take an active role in improving the Veteran Experience. We already have begun 

to examine how to expand Lean Concepts system wide which will help foster idea 

formation across the organization. 

CULTURE CHANGE AT THE VA

Question 6. VA and the VHA are getting beaten up a lot in the media and in Congress. While a lot of this aggressive oversight is justified, a group of people can only 

take so much of this type of oversight before they become timid and simply check 

the box to not get in trouble. That is not the type of culture we want at the VA. 

What suggestions do you have to improve the culture at the VHA and the VA as 

a whole? 

Response. The Blueprint for Excellence lays the framework for improvement of the 

culture of VA, and provides a positive vision for employees. Recent shortcomings of 

VHA performance highlight the importance of reconnecting leadership and staff to 

VA’s mission and the expressed values of the organization, as a basis for cultural 

transformation. In addition to creating a positive and ‘‘Veterans-first’’ culture of 

service in VA, this vision seeks to improve Veteran services by building an environment of continuous learning, facilitated by responsible risk-taking and balanced by 

personal integrity and constructive, sustainable accountability. Such an environment reinforces a culture of doing right by the Veteran every time. 

Question 7. What suggestions to do you have actually encourage innovation and 

new ideas? 

Response. The Secretary has emphasized that the best ideas come from those who 

are closest to the problem. This led to the development of the ‘‘MyVA’’ initiative. 

This initiative will reorient VA around Veterans’ needs and empower employees to 

assist by delivering excellent customer service to improve the Veteran’s experience. 

‘‘MyVA’’ actually works to identify best practices to amplify issues and develop solutions. We must combat non-productive activity and waste, such as production defects, overproduction, waiting, underutilization of talent, excess motion, and extra 

processing. Supported by senior managers and leaders, front-line workers through 

mid-level management staff will be recruited to identify opportunities for innovation 

throughout their work areas. The ‘‘MyVA’’ brings together all members of the organization focused on continued learning and working to ensure state-of-the-art care 

for our nations Veterans. 

VA leadership has been instructed to continue to seek feedback and ideas from 

Veterans, employees, community partners and stakeholders through the use of town 

hall forums. In addition, we have instituted the ’’MyVA Idea House;’’ an intranet 

web tool, where employees from across VA can submit ideas online to improve services, streamline processes and solve issues for Veterans and their families. 

Question 8. What authorities can Congress give you to help these innovations and 

ideas cut through the existing VA and VHA bureaucracies? 

Response. Congress has been extremely helpful as we continue to work to transform VA’s organizational culture and become the VA that our Veterans want and 

deserve. We look forward to working with Congress to help us fill needed personnel 

shortages across our system. Also, by helping us to get the message out that VA 

has a laudable mission and is a great place to work. 

Question 9. How can we create excellence at the VA? 

Response. We can create excellence in the VA by continually looking for ways to 

improve our system and by putting the Veterans Experience principal in all we do. 

We must recruit and retain the best and brightest and give them the tools necessary to provide the very best care possible to our nations Veterans who have 

earned it. We also must seek to learn from mistakes and prevent reoccurrence. 

Æ