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[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

 
        OPTIMIZING CARE FOR VETERANS WITH PROSTHETICS: AN UPDATE

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 31, 2012

                               __________

                           Serial No. 112-72

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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75-615                    WASHINGTON : 2012
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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

CLIFF STEARNS, Florida               BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado               CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida            SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee              MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana          LINDA T. SANCHEZ, California
BILL FLORES, Texas                   BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
JEFF DENHAM, California              JOE DONNELLY, Indiana
JON RUNYAN, New Jersey               TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan               JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York          RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
MARK E. AMODEI, Nevada
ROBERT L. TURNER, New York

            Helen W. Tolar, Staff Director and Chief Counsel

                                 ______

                         SUBCOMMITTEE ON HEALTH

                ANN MARIE BUERKLE, New York, Chairwoman

CLIFF STEARNS, Florida               MICHAEL H. MICHAUD, Maine, Ranking
GUS M. BILIRAKIS, Florida            CORRINE BROWN, Florida
DAVID P. ROE, Tennessee              SILVESTRE REYES, Texas
DAN BENISHEK, Michigan               RUSS CARNAHAN, Missouri
JEFF DENHAM, California              JOE DONNELLY, Indiana
JON RUNYAN, New Jersey

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.

                            C O N T E N T S

                               __________

                             July 31, 2012

                                                                   Page

Optimizing Care for Veterans with Prosthetics: An Update.........     1

                           OPENING STATEMENTS

Chairwoman Ann Marie Buerkle.....................................     1
    Prepared statement of Chairwoman Buerkle.....................    18
Hon. Michael H. Michaud, Ranking Democratic Member...............     6

                               WITNESSES

The Honorable Robert A. Petzel, M.D., Under Secretary for Health 
  Veterans, Health Administration, U.S. Department of Veterans 
  Affairs........................................................     3
    Prepared statement of Dr. Petzel.............................    19
    Accompanied by:

      Mr. Philip Matovsky, Assistant Deputy Under Secretary for 
          Health, Administrative Operations Veterans Health 
          Administration, U.S. Department of Veterans Health
      Dr. Lucille Beck, Ph.D., Chief Consultant, Rehabilitation 
          Services Director, Audiology and Speech Pathology 
          Acting Chief Consultant, Prosthetics and Sensory Aids 
          Service Veterans Health Administration, U.S. Department 
          of Veterans Affairs
      Mr. C. Ford Heard, Associate Deputy Assistant Secretary for 
          Procurement Policy, Systems and Oversight, Office of 
          Acquisitions, Logistics and Construction

                   MATERIAL SUBMITTED FOR THE RECORD

Questions and Responses from the United States Department of 
  Veterans Affairs...............................................    21
Summary of Plan to Merge Prosthetic and Sensory Aids Service and 
  Office of Rehabilitation Services..............................    22

        OPTIMIZING CARE FOR VETERANS WITH PROSTHETICS: AN UPDATE

                              ----------                              

                         TUESDAY, JULY 31, 2012

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                    Subcommittee on Health,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 4:40 p.m., in 
Room 334, Cannon House Office Building, Hon. Ann Marie Buerkle 
[Chairwoman of the Subcommittee] presiding.
    Present: Representatives Buerkle, Roe, and Michaud.

OPENING STATEMENT OF CHAIRWOMAN ANN MARIE BUERKLE, SUBCOMMITTEE 
                           ON HEALTH

    Ms. Buerkle. The Subcommittee will come to order. Good 
afternoon and welcome to today's Subcommittee hearing: 
Optimizing Care for Veterans With Prosthetics: An Update. 
Today's hearing is a continuation of a discussion we began 
almost 3 months ago when this Subcommittee heard from veterans 
with amputations, members of our VSOs, and officials from the 
Department of Veteran Affairs to review the VA's capability of 
delivering state-of-the-art prosthetic care to our veterans 
with amputations and the impact of the VA's planned prosthetic 
procurement reforms. These reforms will, among other things, 
take prosthetic purchasing authority away from the prosthetic 
specialists and transfer it to contracting officers.
    As our veterans so eloquently described in May, prosthetic 
care is unlike any other care that VA may provide, and when we 
make the mistake of treating it as such, no less than the daily 
and ongoing functioning and quality of life of our veterans is 
at stake. I was very troubled to hear from our veterans such 
strong opposition to the proposed reforms, arguing forcefully 
that they would lead to substantial delays in care for veterans 
with amputations and clinical judgments regarding veterans' 
needs being overridden by individuals with little or no 
experience in prosthetic care.
    In mid-June, following our hearing, I sent a letter, along 
with Ranking Member Michaud, to the Secretary, requesting that 
the Department respond to a number of questions and provide 
certain materials regarding the strategy, plans, and criteria 
used to develop, consider, design and evaluate the proposed 
reforms as well as the pilot programs that preceded them.
    Our goal was to understand the analysis VA employed to 
develop the reforms and what was behind the decision that they 
were the best idea for our veterans, especially those who have 
experienced loss of limb as a result of service to our Nation.
    Sadly, the Department's response, which came a week after 
the deadline requested in our letter, did not provide the 
information or the level of detail we asked for, and did 
nothing to assure me that the plan would be effective or that 
our veterans' concerns were unfounded. To the contrary, a close 
review of the materials VA provided leads me to believe that 
the reforms were developed without careful and thorough 
consideration.
    It leads me to believe that they were developed without 
sufficient input from our veterans themselves, our veteran 
service organization advocates, or other stakeholders. It leads 
me to believe that they were developed and implemented after 
being tested for a very short period of time at a small number 
of locations, with very limited feedback. It led me to believe 
that they were developed without adequately measuring their 
impact on patient care. It led me to believe they were 
developed without safeguards in place to ensure that our 
veterans' and clinicians' wishes are respected and timeliness 
goals are met.
    It is concerning that VA would move forward with 
instituting such large-scale changes that so directly impact 
our veteran patients in this way. If my concerns are 
groundless, and I truly hope they are, I want the VA in 
explicit detail to explain why.
    During our last hearing, our veterans and VSOs spoke very 
loud and clearly. Now it is time for the VA to do the same.
    [The prepared statement of Ms. Buerkle appears on p. 18.]
    Ms. Buerkle. Again, I thank you all for joining us this 
afternoon. Our Ranking Member, Mr. Michaud, is on the floor. We 
will give him an opportunity to provide remarks when he 
returns.
    Now I would like to invite our first and only panel to the 
witness table.
    Joining us from VA is the Honorable Under Secretary for 
Health, Dr. Robert Petzel. Dr. Petzel is accompanied by Philip 
Matovsky, the Assistant Deputy Under Secretary for Health, 
Administration Officers; Dr. Lucille Beck, Chief Consultant of 
Rehab Services, Director of Audiology and Speech Pathology, and 
the Acting Chief Consultant for Prosthetics and Sensory Aids 
Service; and Ford Heard, the Associate Deputy Assistant 
Secretary for the Office of Acquisition and Logistics.
    Thank you all very much for being here.
    Dr. Petzel, thank you for your service to our veterans and 
for taking the time out of your schedule to be here this 
afternoon to address what we consider an extremely important 
issue on behalf of our veterans. I look forward to hearing your 
testimony.
    You may proceed at this time. Thank you.

STATEMENTS OF HON. ROBERT A. PETZEL, M.D., UNDER SECRETARY FOR 
     HEALTH, VETERANS HEALTH ADMINISTRATION, UNITED STATES 
DEPARTMENT OF VETERANS AFFAIRS, ACCOMPANIED BY PHILIP MATOVSKY, 
  ASSISTANT DEPUTY UNDER SECRETARY FOR HEALTH, ADMINISTRATIVE 
   OPERATIONS, VETERANS HEALTH ADMINISTRATION, UNITED STATES 
   DEPARTMENT OF VETERANS HEALTH, LUCILLE BECK, PH.D., CHIEF 
  CONSULTANT, REHABILITATION SERVICES DIRECTOR, AUDIOLOGY AND 
  SPEECH PATHOLOGY, ACTING CHIEF CONSULTANT, PROSTHETICS AND 
 SENSORY AIDS SERVICE, VETERANS HEALTH ADMINISTRATION, UNITED 
    STATES DEPARTMENT OF VETERANS AFFAIRS, AND FORD HEARD, 
 ASSOCIATE DEPUTY ASSISTANT SECRETARY, OFFICE OF ACQUISITIONS 
  AND LOGISTICS, UNITED STATES DEPARTMENT OF VETERANS AFFAIRS

            STATEMENT OF HON. ROBERT A. PETZEL, M.D.

    Dr. Petzel. Chairwoman Buerkle, Ranking Member Michaud, and 
Members of the Subcommittee, I want to thank you for the 
opportunity to speak about the Department of Veterans Affairs 
prosthetics procurement reform. Thank you, Madam Chairwoman, 
for introducing the people that are accompanying me.
    VA testified before this Subcommittee and the Subcommittee 
on Oversight and Investigations in May, 2012. We did this 
regarding our efforts to maintain the high quality of 
prosthetics VA provides to veterans while instituting reforms 
to improve compliance with the Federal Acquisition Regulations 
and the Competition in Contracting Act, and to improve our 
management of government resources.
    In follow-up to these hearings, the chairwoman and Ranking 
Member submitted a letter to VA on June 21, requesting a 
response by July 6 that would offer additional information 
about these reforms. On July 12, VA submitted information to 
the Subcommittee to begin to address the Subcommittee's 
request. I apologize that submission was late and that it was 
not sufficient to address your concerns.
    Yesterday, at the Subcommittee's request, we formally 
submitted additional information to provide a narrative account 
of our efforts, and we believe this will better meet your needs 
and provide for some further understanding. If you still have 
additional questions, we would be happy to respond.
    You also have asked for an update on the actions the 
Department has taken to reform the prosthetics procurement 
process since May 21 in the hearing. On May 23, 2012, VA issued 
a memorandum to the field advising them that it is VA's policy 
that those engaged in the ordering of biological implants must 
comply with the FAR and VA acquisition regulations. That 
memorandum states that the VA official performing the 
purchasing activity is to comply with a physician's 
prescription.
    Furthermore, in response to your advice to transition our 
warrant program with deliberation and caution, we extended the 
date for finalizing this transition from July 1 until September 
30, 2012. This transition continues with ongoing communication 
and coordination within the VISNs to ensure that procurement 
services are not disrupted. We are closely monitoring the 
staffing levels for our contracting organizations, the workload 
levels, and most importantly, the timeliness of procurement 
actions. If we find that we have insufficient resources to 
complete this transformation, we will extend the timeline to 
allow for a smooth transition.
    Finally, you asked me to address the potential impact these 
reforms could have on veterans. As we testified in May, we do 
not believe that veterans will be adversely impacted in any 
way. Indeed, this change should result in no visible effect for 
veterans. We believe that our reform efforts are acceptable to 
the major service organizations.
    Two proposals appear to have raised interest. First of all, 
our plans to standardize the purchasing of prosthetics and 
other devices; and secondly, our plan to transition procurement 
decisions to warranted contracting officers. On the first plan, 
many of the products VA purchases are already on contract in 
some way, shape, or form. They are either going to become a 
part of a veteran or they are going to be a critical part of 
their daily lives. We understand the critical value these 
devices offer and the independent clinical judgment of our 
providers will remain and must remain fully intact.
    A contracting officer will not have the capacity to 
override a physician's order. This aspect guides a decision-
making process of our leadership and will be preserved in our 
policies and in our procedures. Clinicians, in consultation 
with veterans, will decide what devices we procure. Our reforms 
are designed only to modify how we procure them. When products 
are generally available and interchangeable, competitive 
procurement may be appropriate. We are hoping that in the long 
term we can develop a catalog that will facilitate more cost-
effective purchasing in those instances.
    On the second plan concerning the transition of procurement 
decisions, I, again, emphasize that this is only changing how 
we purchase, not what we purchase. By shifting to contracting 
specialists, we can ensure that we secure fair and reasonable 
prices for the products while still delivering the personalized 
state-of-the-art care that has been earned by these veterans.
    In conclusion, VA has been engaging in prudent and 
appropriate reform to improve the business processes governing 
the procurement of prosthetic devices for veterans. We take 
great care to ensure that these changes improve the 
accountability of these purchases while maintaining the high 
quality of care and clinical decision-making critical to 
veterans health care. Clinicians determine the prosthetic needs 
of veterans as a part of their clinical care, and VA procures 
the devices necessary to achieve personal clinical outcomes. 
Our reform efforts will not disturb this arrangement.
    We appreciate the opportunity to appear before you today to 
discuss this important program. My colleagues and I are 
prepared to answer your questions.
    [The prepared statement of Dr. Petzel appears on p. 19.]
    Ms. Buerkle. Thank you very much, Dr. Petzel.
    I will now yield myself 5 minutes for questions. I guess my 
first question, as I am listening to your testimony today, as 
well as in the last hearing, is could you just briefly explain 
to me what prompted this change?
    Dr. Petzel. Certainly, Madam Chairwoman. The reform of VA's 
procurement processes really began more than 2 years ago, and 
they started at the Department level with the procurement of 
equipment, with the procurement of pharmaceuticals. This is a 
systemwide effort to ensure that we have professional, 
certified contracting people doing the procurement. We have 
been criticized in the past by organizations such as the IG for 
not having a professional procurement force and for not 
following in all instances the Federal regulations or VA's 
acquisition regulation.
    So the effort, in no way, is directed specifically at 
prosthetics. This began, as I say, with equipment. It has moved 
into pharmaceuticals. Prosthetics is really the last area of 
procurement within VA where we have not had certified warranted 
procurement officers doing the majority of the procurements 
above $3,000.
    Ms. Buerkle. Thank you. When I hear words like 
``equipment'' and ``pharmaceuticals'' and then ``the 
development, possibly, of a catalog,'' what you are talking 
about in those instances are so very different from the 
testimony we heard in the last hearing regarding the personal 
nature of a prosthetic. Amoxicillin is amoxicillin. A 
thermometer is a thermometer. But a prosthetic is unique to 
that person and to his needs or her needs. That is my concern 
with this process, that it will become just like any other 
procurement. This is a very different process. I think this is 
what concerns the VSOs and concerns the veterans. This is a 
uniquely personal service that we have to give to that veteran. 
What I am hearing here when you talk about cataloging purchases 
concerns me greatly.
    Dr. Petzel. Madam Chairwoman, we absolutely agree with you. 
This is the most personal of work that the VA does. Crafting 
and fitting a prosthetic limb to an individual that has lost an 
arm or a leg is a very personal process. The reforms that we 
are talking about in terms of procurement will not interfere 
with that process. The physician orders the prosthetic. And 
that order can be very specific. The prosthetist works with the 
patient to determine where the best place is to purchase that. 
As you know, we have 600 contracts in the private sector, and 
not all, but most of our procurement occurs in the private 
sector.
    In the process of transitioning and during the pilots, we 
audited the orders that the physician had written; we audited 
the purchase contract, what was actually purchased; we looked 
at the timeliness between when that order was placed and when 
it was actually purchased; and we looked at the satisfaction, 
particularly of the prosthetist and the physicians, as to 
whether or not the needs of that veteran, as they described 
them, were met. And in the pilots we found that that was true; 
that that worked very well.
    The only misjudgment that we made in the pilots is that we 
expected a higher level of productivity from the contracting 
officers than we actually found, and we had to revise the 
number of contracting officers that we felt we needed because 
we felt that the four contracts per day that they originally 
were going to perform was more than was doable; that 2.5 is a 
better example. But, otherwise, the pilots indicated that 
things went very well.
    Ms. Buerkle. Can you talk to us about the pilots? How many 
pilots were done? Over what period of time were the pilots 
conducted? Which VISNs were included in the various pilots?
    Dr. Petzel. Yes, Madam Chairman, we can, and I would like 
to turn to Mr. Matovsky to give you some of the details about 
the pilots.
    Thank you.
    Mr. Matovsky. Thank you, sir. We conducted three pilots, 
one of them in VISN 6, which is North Carolina, parts of 
Virginia, parts of West Virginia; VISN 11, which is Indiana--I 
am going to test my geography here--parts of Michigan as well; 
and then VISN 20, which is the Upper Northwest on into Alaska. 
We selected them because they were a broad representation, some 
of them highly rural, some of they very large and growing. We 
also ran them from the period of January through the end of 
March, for 3 months. I believe one of them scooted into April.
    We tested two different processes. So one process utilized 
fully the ECMS, or Electronic Contract Management System, to 
place the order and another one in VISN 6 used a slightly 
different process. That is the basis for it.
    We tested the onboarding of our staff, the training of our 
staff, the communication and the collaboration with the 
prosthetist, the prosthetics purchasing agent, and then the 
contracting management staff. As Dr. Petzel indicated, we did 
conduct some audits. For instance, we looked at the technical 
appropriateness of the contracting action. But more 
importantly, we looked at what percentage of the time did the 
contracting officer adhere to the physician's prescription. A 
hundred percent of the time, the contracting officer adhered to 
the prescription.
    Ms. Buerkle. Thank you. With that I will yield to the 
Ranking Member, Mr. Michaud, for any opening statement you 
might have and 5 minutes for your questions.
    Mr. Michaud. Thank you very much, Madam Chair. I apologize 
for being late. I was managing the veterans bill on the House 
floor. This is the earliest I could get back.

     OPENING STATEMENT OF HON. MICHAEL H. MICHAUD, RANKING 
                       DEMOCRATIC MEMBER

    I want to thank everyone for attending this very important 
hearing. This afternoon is a follow-up. And I also would like 
to thank the chairwoman for her persistence in holding the 
Department accountable on issues such as prosthetics, not just 
for care, but also for procurement, which is so important for 
the veterans. Every veterans' needs are unique. VA should get 
this right.
    We have learned during the last hearing on this issue in 
May about VA's proposed changes in the procurement of 
prosthetics. At that hearing, there was a high degree of 
concern expressed among some of our witnesses as to the 
effectiveness of these changes. We are alarmed by the possible 
negative impacts on patient care, including substantial delays 
in care and clinical judgments regarding veterans' needs being 
overridden by individuals with little or no working knowledge 
of prosthetic care. And we sent a bipartisan letter to the 
Secretary outlining our concerns and soliciting answers to 
several of our questions.
    This is the third hearing in a handful of months on this 
particular issue, and I remain committed to working with the 
very dedicated staff at the Department of Veterans Affairs and 
the advocacy community to assure that our veterans are getting 
the best care that we can deliver in a timely way. In this 
joint effort and joint challenges this Subcommittee stands 
ready to help.
    And I read through your testimony and I just have a few 
questions, if I might. In your testimony you said: We believe 
that many of our reform efforts are acceptable to all concerned 
parties. When you say ``we believe,'' have you worked with the 
VSOs and the veterans to find out what their concerns are?
    Dr. Petzel. Congressman Michaud, we have. Since the May 
hearing, there have been multiple meetings with the service 
officer representatives. I have a breakfast monthly with six of 
the largest service organizations. We made a presentation and a 
discussion at that breakfast earlier in July. And then just a 
day ago, on Monday, at a conference call with the service 
organizations--the American Legion, VFW, PVA, the DAV, Amvets, 
and the Blind Veterans of America--to discuss what we want to 
do. And I can say that there was no objection at that meeting 
and at that conference to our proposed reforms.
    Mr. Michaud. Thank you. My next question actually is two, 
but it is a related issue. Is the VA central office instructing 
VISNs to restrict access to contract prosthetics or orthotists? 
If not, what about the VISNs? Are the VISNs restricting access 
to contracts for prosthetics for veterans who rely on those 
prosthetics?
    Dr. Petzel. Congressman Michaud, our policy that is this is 
a veteran's choice. That we have, as I mentioned earlier, 600 
contracts. Most of the prosthetics actually are fabricated and 
fitted by private vendors. Our policy very clearly states that 
there must be available in every one of the medical centers a 
list of the contractors, and this must be explained to the 
veteran, that they have a choice in doing that.
    The practice that I think you may be hearing about from 
some of the vendors is that around the country, how this 
interaction occurs is variable. In some instances, in rural 
areas, where we do not have prosthetists that do fitting, et 
cetera, people from the outside, from the private sector, are 
invited into the prosthetics clinic and are actually involved 
in the discussions with patients because we don't have the 
personnel to do that. At our larger medical centers where we 
have a large cadre of prosthetists, it would be less likely 
that the vendors would be invited in to participate in the 
clinic because we have the personnel to do that. But if there 
is a connection between a patient and a prosthetist, that 
individual is invited in and is welcome to come to the clinic 
and welcome to be a part of whatever activities are involved in 
our prosthetic clinic.
    Mr. Michaud. Thank you. My other question. As you know, we 
invest a significant amount of funding into the VA for 
fabricating prosthetics. Do you believe it is more cost 
effective for the VA to consolidate prosthetics fabrication 
internally within the VA, or is it more cost-effective to 
continue to rely on contracts?
    Dr. Petzel. Congressman Michaud, let me first say that I 
think it is essential that the VA retain the capacity to 
fabricate and to fit prosthetic limbs. We must be able to do 
that. And quite frankly, in years passed, I think that our 
capacity to do that had really slipped. And I must say that 
over the a last 7 or 8 years, the VA has improved its capacity 
to do both fitting and fabrication.
    The question about whether or not the VA can do it less 
expensively than the private sector I think remains unknown. 
The IG had a limited amount of data to look at and made a 
statement that it was less costly to do it within the VA than 
it was in the private sector. But I think we would all have to 
agree that there was not all of the sufficient data to make 
that comparison. My personal belief is that it is more cost 
effective, but we need to have all the data to say that 
definitively.
    Mr. Michaud. I see I am running out of time, so thank you 
very much, Madam Chair.
    Ms. Buerkle. I now yield to the gentleman from Tennessee, 
Dr. Roe.
    Mr. Roe. Just a couple of very quick questions. The idea, 
the reason for doing this was back to what the IG, is that 
right, Dr. Petzel, is trying to standardize the procedures, not 
only in this but in other areas in contracting that the VA 
does? Am I right on that?
    Dr. Petzel. To standardize procurement, not procedures per 
se, but to professionalize and standardize the way we procure 
material. We have been criticized, as I said, in the past by 
important groups of people, including some congressional 
committees, on our procurement strategies. This systemwide 
effort was to try and professionalize that, yes.
    Mr. Roe. So I guess what the chairwoman said is correct. 
There is obviously a prosthetist sitting right to your left. 
That is a very individualized therapy. And I know as a 
physician, this has to be tailored per person. I am sure there 
is some standardization to it, and this is not going to, in any 
way, slow that process down or make that process not as 
effective or available to our veterans. Am I correct on that?
    Dr. Petzel. Yes, sir, you are correct.
    Mr. Roe. And so a patient will be able to come into the 
clinic, and that patient won't know the difference. The time 
won't make any difference. There is not going to be a 
difference in timeliness. The fact that it costs more than 
$3,000, that is not going to deflect the time; that that 
veteran that comes in that needs a limb or a prosthetic device 
is going to get that device?
    Dr. Petzel. Yes, sir, that is correct.
    Mr. Roe. I think that is extremely important. Secondly, 
once you have cataloged this, is there a way to go outside? In 
other words, here is what is in our catalog. If the doctor and 
the prosthetist look at this patient and say, This is what they 
need, it is not right in this little book right here, can they 
get that? Because this technology is changing faster than 
cardiac stints are changing. It is amazing the technology now 
on prosthesis. As that new technology occurs, it is like these 
things right here, as soon as you buy it, it is out of date.
    And so I see the same thing in prostheses. People are doing 
amazing things with this. Once it goes in the Sears and Roebuck 
catalog that Sears has, that the VA has, can that person get 
something from the new catalog or something brand new that 
happens?
    Dr. Petzel. Dr. Roe, absolutely. One of the nice things 
about the VA and the procurement regulations is 8123, which 
basically says that with the proper justifications, we do not 
have to do competitive buying; that we can buy specifically 
what the doctor has ordered.
    So while we may have a catalog of things that are 
appropriate in certain kinds of circumstances, the important 
part of all of this is the doctor writes an order, and we will 
procure for that patient, what the doctor has ordered.
    Mr. Roe. So this is not going to negate new technology that 
occurs?
    Dr. Petzel. Absolutely not.
    Mr. Roe. So our veterans can get the cutting edge. They are 
not going to get stuck in ``it's not in the book, so you can't 
have it.''
    Dr. Petzel. Absolutely not, Congressman. Just to give an 
example, there are two relatively new knees that were jointly 
developed by the VA and the Department of Defense, the X2 and 
the Genium. Those are absolutely cutting-edge technology for an 
artificial knee. They are available to any veteran who needs 
and wants that kind of a prosthesis.
    Mr. Roe. So it is one thing to have all the colonoscopes 
look exactly like. That was one of the issues when I first got 
here. We had that issue that came up. This is a little 
different than that. I guess the other question I have, and 
then I will have no more is that you said that you don't 
believe that the veterans will be negatively impacted. Will 
they be positively impacted by this? Will this improve? I know 
the VA feels like it will be positively impacted, but will the 
veteran be positively impacted by this, or will they even know 
the difference?
    Dr. Petzel. First of all, Congressman, they should not know 
a difference. It should be absolutely transparent to them. But 
there are a couple of things that I think will happen that 
will, even if they don't notice it, improve prospects, I expect 
that once we get this up and running and under our belt that we 
are going to cut down on the procurement time, on average. That 
is number one.
    Number two is that any money that might be saved by getting 
a fair price--and that is not our intention, but if that should 
happen--is money that can be put back into the system to 
provide more care to more veterans.
    Mr. Roe. One quick question. When will we know that? When 
will you evaluate that and know when it goes in and up and 
running, a year from now? Or 2 years from now?
    Dr. Petzel. Congressman, I think there are going to be two 
different kinds of valuation. One is that in an ongoing fashion 
we have to monitor the things that we described before: 
Timeliness, was a physician's order actually followed 100 
percent of time, was there a level of satisfaction that was 
appropriate on the part of the patient, the provider, the 
doctor, and the contracting officer, and certain other 
technical things about the contract. That is going to be an 
ongoing process.
    When we have been into this, say, for a year or 6 months, 
we will have to look, and we will, look at the overall process 
and see what it has accomplished and see if indeed we are doing 
overall a better job of purchasing than we were doing before. 
So there will be two levels of evaluation.
    Mr. Roe. Thank you. I yield back.
    Ms. Buerkle. Thank you. I am going to yield myself five 
minutes for a second round of questioning, if that is okay. 
Just a couple of things. First of all, I am concerned about a 
3-month pilot that you mentioned and whether or not that is 
going to give us the scope of the situation, and whether or not 
this is working. It seems to me that 3 months is a very short 
period of time. And I will let you address that question in a 
minute.
    In your opening testimony, you talked about the potential 
if we find insufficient resources to have been allocated after 
you implement the changes. What period of time are you talking 
about to evaluate that?
    Dr. Petzel. Madam Chairwoman, let me answer first the 
second part of your question. What I was saying is, if in a 
network or at a facility we do not have sufficient, well-
trained contracting personnel to do this, we won't do it until 
we have the resources we need in contracting to do this in a 
timely, professional fashion. And that will occur as we begin 
to extend this into the other networks.
    So if there is a network, whatever that might be, where two 
or three of the facilities do not have sufficient people, we 
won't institute this in those two or three facilities until we 
have the appropriate, adequate trained personnel. That is that 
I meant to say.
    The first part of your question, and I will ask Mr. 
Matovsky to comment on this in a minute, is, were the pilots of 
sufficient length?
    There was a run-up period of preparation in terms of 
training, et cetera. So this was 3 months of actual doing the 
work. And yes, we think we got a good feel for how this worked, 
what the issues might be, and what the potential problems might 
be.
    Mr. Matovsky, do you want to make any comment about the 
length of the pilots?
    Mr. Matovsky. We continued running them after the duration. 
So the official time period, we wanted 3 months, but we 
continued running them. As we have concluded, we then 
standardized the process for ordering in VISN 6 so that it 
conformed to VISN 11 and VISN 20. And we saw improved 
performance by using that new process. And we really saw it 
stabilize as well. So our best performing month in terms of 
average timeliness was July, across the board.
    So it was the official time period for the pilot, and then 
as it was there and running, we left it running and observed 
how it was running.
    Ms. Buerkle. Do you know in that period of time how many 
actual transactions there were; how many prosthetic devices 
were obtained or tried to be procured?
    Mr. Matovsky. I do know that. I am not going to find it in 
my notes right now. And we can provide it for the record. But 
we do know the specific numbers, yes, ma'am.
    Ms. Buerkle. I do want to address a much broader concern, 
and that is the question of leadership within the VA with 
regard to prosthetics. As I read through the introductions, and 
I read Dr. Beck's introduction, the many hats that you wear, I 
am concerned that you are acting in multiple capacities, and 
there is not one person focused on prosthetic procurement and 
the whole prosthetics issue within the VA.
    If you could speak to direction of leadership for the VA? 
Is this something Dr. Beck will take on herself and then 
someone else will relieve her of some of the other duties? It 
seems like Dr. Beck is wearing many hats, I am concerned with 
regard to the level of leadership.
    Dr. Petzel. Thank you, Madam Chairman. You are absolutely 
right, she is wearing a lot of hats. Very talented, incredibly 
energetic lady, but she has a lot of things that she has to do.
    I want to ask Dr. Beck to comment in a minute about 
leadership in prosthetics. But I do want to commend the job 
that she has done since she has been in that role. There really 
has been a palpable change for the better in the way we do our 
prosthetics. I think that Lu has done really a fabulous job.
    The bench is not as strong as we would like to have it in 
prosthetics, so that we can turn most of the operating parts of 
prosthetics over to someone else.
    I would like you to make a comment about that, Dr. Beck.
    Ms. Beck. Thank you, Dr. Petzel, and thank you, Madam 
Chairwoman, for your concern. I have had a lot of support from 
my leadership, up to Dr. Petzel, as I have taken on this 
initiative. We have developed a plan to have a comprehensive 
office of rehabilitation and prosthetics. In that office, we 
will have a national program director and a large staff devoted 
to prosthetics and sensory aid service so that we will be 
managing the clinical practices, the procurement and 
contracting, their regulatory issues, and the development of 
all of the programs. So we have a plan that is just in the 
approval stages now that will give us the resident resources 
and expertise and leadership roles in the prosthetics office.
    One of the important things that we are doing, and I think 
one of the veterans service organizations talked about this in 
their testimony, is that prosthetics and sensory aids is a very 
dynamic service. It is an important clinical support service to 
all of the programs in VHA. And so it touches almost every 
provider, from our primary care teams to our rehabilitation 
teams to many of our specialists. And for that reason we are 
linking prosthetics to rehabilitation services so that we can 
assure that we have the proper collaboration and coordination 
under the direction of Patient Care Services, which is 
responsible for all of the clinical activity in VA.
    Dr. Petzel. So just to elaborate for a minute, Dr. Beck 
would be responsible for rehabilitation services and 
prosthetics in the larger sense. There will be specific 
leadership in prosthetics and an office and the staff necessary 
to administer that program appropriately. And that plan, as I 
understand it, is coming shortly to my desk.
    Ms. Buerkle. That was going to be my next question; what 
would be the expectation for implementation of that plan?
    Dr. Petzel. Very soon. I hesitate to give you a specific 
date, but I understand the request for people in the 
organizational chart is on its way to me. We will review that, 
and as soon as it is signed off on, the process of hiring those 
people and beginning to do that will begin. So the process will 
certainly begin shortly. I can't predict how long it will take 
to hire the right person, but we will begin shortly.
    Ms. Beck. I would just like to reinforce that. We currently 
have many very excellent people in the prosthetics and sensory 
aids service who are working everyday with me to accomplish all 
of our goals, and also to say that in rehab services, we have 
defined leadership and subject matter expertise for each of the 
offices. So our physical medicine and rehabilitation office has 
a physician leader. So the leadership, as Dr. Petzel says, in 
prosthetics and sensory aids service will be devoted to the 
clinical support services that we are doing in prosthetics and 
sensory aids.
    Ms. Buerkle. Thank you very much. Just briefly, and then I 
am going to yield to the Ranking Member. You mentioned that 
yesterday you had a conference call and that you have been in 
touch with the veterans service organizations. As you recall, 
at the last hearing there were grave concerns, and in my 
opening comments, I expressed the concerns the VSOs have. In 
one of the questions you just answered, you talked about this 
ongoing process and you talked about timeliness and physicians' 
orders and the contracting officers. But, again, there is no 
contact, there is no connection, there is no ongoing--there 
doesn't seem to be ongoing communication with the veterans 
service organizations, with the veterans themselves. It is one 
thing to do this operation and to look at it objectively, and 
to look at a plan on paper, but the most important ones we need 
to hear from are the veterans who are requiring this service, 
because that is what is key here.
    Dr. Petzel. Thank you, Madam Chairman. Two responses to 
that. One is I have ongoing meetings with veteran service 
organizations. We do two things: Every month I have a 
breakfast, 2-hour meeting with the leaders of the six largest 
service organizations. Then every quarter we have a bigger 
meeting, again, about 2\1/2\ hours, with a broader range of 
service organizations. And we will keep in touch with them 
through this. It is important to all of them, but particularly 
the Disabled American Veterans, the PVA, and the Blinded 
Veterans. Prosthetics is an essence of the service that the 
members of those organizations need.
    In terms of the veterans, Troy Elam, who was present, by 
the way, on the phone call, who had testified earlier, I think 
said it at the first hearing, and I had not really heard 
anybody articulate it quite as well as she did. And that is, 
that we have to have, as part of our ongoing look at this 
transition, we have to have a mechanism for asking the veterans 
what they experienced, not just with this transition, but with 
prosthetics itself.
    Perhaps Dr. Beck could just briefly comment on the 
instrument that we are going to use.
    Ms. Beck. Yes. Thank you, Dr. Petzel. The instrument we are 
going to use is called uSPEQ. That is an acronym for the 
Stakeholder Participation and Experience Questionnaire. This is 
a national benchmarked questionnaire that is used by the 
Committee on Accreditation for Rehabilitation Facilities, which 
is a national organization that accredits rehabilitation 
facilities. We have recently received approval from the Office 
of Management and Budget to use that survey to gather 
information about satisfaction, and we have arranged a contract 
which is now in place with CARF, the acronym for Committee on 
Accreditation of Rehab Facilities, and we are beginning the 
training of our staffs around the country so that they will be 
able to implement the utilization of this questionnaire, not 
only for amputation and prosthetics care, but for many elements 
of the rehabilitative care that we provide in VA.
    One very important aspect of this is that it is a valid 
survey. Data are collected from all facilities all over the 
country, not just VA facilities, and we are able to benchmark 
our care with the care that is provided across the country 
related to rehabilitation. So that is important for us. And it 
is patient satisfaction. And so it asks the patient what they 
think.
    Ms. Buerkle. And if I could respectfully suggest, in 
addition to the organizations that you are communicating with, 
that you would include the newer organizations: The Wounded 
Warrior Project, the IAVA. It seems to me they should be 
included in this discussion and their feedback should be 
obtained as well.
    Dr. Petzel. Yes. Thank you.
    Ms. Buerkle. I yield now to the Ranking Member.
    Mr. Michaud. Thank you very much, Madam Chair. In answering 
Mr. Roe's question about procurement time, you said it will cut 
down on procurement time. Do you have any idea how much time it 
might cut down on the procurement time?
    Dr. Petzel. I would, Congressman Michaud, have to ask Mr. 
Matovsky if he has any thoughts on that. I don't.
    Mr. Matovsky. As we were watching the pilots as they were 
running in the most recent month in VISN 20, for instance, our 
average timeliness was down inside of 3 days to procure, which 
was pretty quick. I think the other thing that we would expect 
to find, frankly, and it came out of these pilots, was a 
collaboration between logistics and prosthetics so that we 
could better tune the inventory management process as well. We 
will see how that goes. We will study that.
    But what that would allow us to do is it would allow us if 
we have better visibility into our inventory avoid a stock-out 
situation. A stock-out situation is where we run out of 
something. And I think that is where we really have the benefit 
of being able to have greater visibility into what we have 
available and what kinds of inventory control points would 
allow us to have a situation where we are managing at a minimum 
inventory level. We are seeing that in VISN 20 in the Upper 
Northwest, sir.
    Mr. Michaud. Thank you. The OIG in their recommendations 
recommend that some VISNs contract out between three and five. 
When you look at VISNs that are actually contracting out with 
the private sector providers more than the three or five that 
was recommended, does that show that there is a greater demand 
among the veterans community to go to the private sector, or is 
that because veterans pretty much in the rural areas are 
accessing those, therefore you have a lot of contracts with 
private providers? Or, is the need continuing to increase 
dramatically?
    Dr. Petzel. Dr. Beck, could you take that?
    Ms. Beck. Thank you, yes. The contracts have been 
established to provide access, to be sure there was access 
close to the patient's home or close to the veteran's home. And 
that is the reason for the large number of contracts that we 
have had.
    Mr. Michaud. Thank you. My last question is in reviewing 
your testimony, Dr. Petzel, you stated that VA is instituting 
more audits of purchases to ensure that we are getting the best 
value for our dollars when we procure prosthetics or other 
devices. Can you tell me how many more audits you are doing now 
compared to before, who is performing those audits, and who is 
analyzing those audits as well as the types of measurements 
that you are using for those audits?
    Dr. Petzel. Let me, in a general sense, respond, 
Congressman, then I would ask Mr. Matovsky to provide some 
detail. The things that we are going to be looking at are the 
things that I mentioned earlier, was the product that was 
ordered and delivered, the product that the physician ordered. 
In other words, what is the consonance between what the 
physician ordered and what was obtained?
    Timeliness will be an ongoing audit. Satisfaction from the 
point of view of the patient, the physician provider, the 
prosthetist, and the contracting officer will be an ongoing 
audit. In the cases where we use 8123 where we don't have to be 
competitive, was there an adequate justification for a 
noncompetitive acquisition, et cetera. Those are the things 
that we in an ongoing way are going to audit. In terms of how 
frequent we are going to be doing that, I would turn to Mr. 
Matovsky for a comment about that.
    Mr. Matovsky. We will be running those every month on a 
cycle. We run within VHA two systems of audits that occur every 
month and then the Department, under Mr. Heard, has another 
audit that comes in and reviews. Ours is probably a little bit 
more tactical than the Department's.
    We look at primarily two things: First, where there is a 
justification for other than full and open under FAR part 6 
using 8123, did the contracting officer comply with the 
prescription? That is number one. Number two, we are looking at 
other elements that are procurement reform-oriented. Is there 
an adequate work-up for the justification? Was there a price 
negotiation performed? Et cetera. And those are the things that 
we are looking at.
    Over time, I think where we would see additional 
efficiencies, at this point theoretical; again, the most 
important thing, did we conform to the 8123 justification? But 
over time, looking at things where we are buying many things 
repeatedly without a covering contract using 8123, do we have 
an opportunity to structure an agreement there. And I think 
those are the ones that we would look at over time.
    But to your question, every month it cycles through the 
VISN level contracting manager, every month it cycles through 
the VHA system of national audits. I review every month in 
detail one of our VISN's contracting results. This is one of 
those results I now review. Mr. Doyle, who is here, also 
reviews through his system the audit results.
    Mr. Michaud. Thank you. I have no more questions. Thank 
you.
    Ms. Buerkle. I am going to yield myself another 5 minutes, 
and then if Mr. Michaud has other questions, he may ask them. 
We keep talking about the contracting officer. What is a 
contracting officer?
    Dr. Petzel. I would ask Mr. Heard if he would, please, 
Madam Chair, to answer that question.
    Ms. Buerkle. And if you could speak to their 
qualifications, their training, and the agreement they have. 
Because initially, I heard there would be a 100 percent 
compliance with the physician order for the prescription. Now I 
am hearing that is going to be monitored. Does the contracting 
officer have any discretion, or why wouldn't he adhere 100 
percent of the time the physician's prescriptions for which a 
prosthetic device is being prescribed for the veteran?
    Mr. Heard. Sure. Madam Chair, we have to look at the 
acquisition workforce first to determine what their 
qualification skill-sets are. Going back to 2000, the Clinger-
Cohen Act that went into place actually professionalized the 
acquisition workforce by putting a positive education 
requirement in place. That positive education requirement for a 
GS-12 or below is either a degree in any field of study at an 
accredited college, or 24 hours of business. At a GS-13 and 
above, it requires both an undergraduate degree and 24 hours of 
business. The Clinger-Cohen Act also required experience and 
also training to be an integral part of that acquisition 
professional contract specialist requirement.
    The actual warranting of a contracting officer, that is a 
delegation. A delegation is based on a need defined by the head 
of a contracting activity. In the VA, there are six heads of 
contracting activity. For Veterans Health Administration, which 
oversees all of the hospital acquisitions, including 
prosthetics, that HCA is Norb Doyle, who is here. Norb is 
designated by the senior procurement executive for the 
Department of Veteran Affairs, Jan Frye. The warranted contract 
individuals that are identified based on a need have to show 
and demonstrate their experience, their education, and 
training.
    Training is also a very elaborate criteria requirement that 
was identified by OMB back around 2007, called the Federal 
Acquisition Certificate in Contracting. Those individuals climb 
to a level of FACC level 3. Again, a very rigorous, robust 
education training requirement, a curriculum identified by the 
Federal Acquisition Institute. Once you are certified, you are 
eligible for a warrant at various levels.
    Our level 1 warrant holders probably have the lesser amount 
of training, but they can be warranted up to $150,000. That is 
commensurate with the simplified acquisition threshold. So 
these are warranted individuals that are warranted on behalf of 
the Federal Government to act as an agent to procure on behalf 
of the Federal Government to ensure that contracts are awarded 
with a fair and reasonable price, to seek competition, to 
comply with the FAR and the VAR.
    Prosthetics is a unique requirement. We are really 
identifying special needs for our veterans. Those requirements 
can be anything, as we talked about today, artificial limbs, 
but also products that are also commercial in nature, which 
could be walkers, canes, and crutches. Some of those are 
available commercially. They are obtained off Federal supply 
schedules. But then the others are really very specific to the 
surgery that is required for a veteran or other therapeutic 
requirements.
    Ms. Buerkle. So why wouldn't there be automatically 100 
percent compliance with a physician's order? Why is that even a 
concern? You are talking about someone with a bachelor of 
science degree who maybe has 24 hours of business classes, that 
they have discretion to override or to not comply with the 
physician's order with regard to the prosthetic?
    Dr. Petzel. Madam Chairwoman, I can just take that for a 
moment, first, and then we will see if either Mr. Heard or Mr. 
Matovsky have anything to add.
    The issue there is fair and reasonable price. That is their 
only responsibility in that case, would be to ensure that in 
purchasing that specific thing that the physician has ordered, 
that we are getting a fair and reasonable price. And that might 
entail negotiating with that provider--with that prosthetic 
provider.
    Ms. Buerkle. So I guess I am concerned, because if there is 
a prosthetic available that is maybe less money, are we looking 
at the quality, are we looking at the prosthetic itself, or are 
we just negotiating a price about the same----
    Dr. Petzel. We are negotiating, in this case, a price, 
Madam Chairwoman, around the specific thing that the physician 
has ordered. That is what determines what we buy. The 
contracting officer's responsibility is to see that we get a 
fair price for it. But when he is not going to be, or she is 
not going to be buying something different because it is less 
costly. Again, we look at what was the physician's order, and 
that is what we buy.
    Ms. Buerkle. So you would expect 100 percent compliance 
with the physician order?
    Dr. Petzel. Absolutely.
    Ms. Buerkle. Do you have any further questions?
    Mr. Michaud. No. That is a good way to sum it up. I think 
it is very important that the physician is the one who decides, 
so I do want to thank you, Dr. Petzel, for all that you are 
doing to help our veterans, as well as the other three 
panelists here today for your efforts in this regard, so thank 
you very much.
    Ms. Buerkle. I thank the Ranking Member, and I also want to 
thank the panel for being here this afternoon. I, again, would 
just like to ask, I think it is very important that we get as 
many veterans' service organizations involved in this 
discussion, as many perspectives as possible. You know, what 
you have mentioned, with all due respect, is great, but I think 
we have got additional veterans' service organizations that 
need to be included in this discussion and to make sure there 
is nothing more important than the veterans and making sure 
when they come home without a limb because they have served 
this Nation, that they have what they need, that they are not 
dealing with some contracting officer who has got some 
discretion to give him less of a device than he deserves. So 
that is all of our concern here--that we get our veterans 
exactly what they need.
    We heard the last time from veterans who talked about--we 
are talking about--the ability of someone to walk his daughter 
down the aisle. We are talking about intensely personal 
prosthetics and an intensely personal segment of the care that 
our veterans need, so there is nothing more important.
    And while we are all concerned with regard to costs, that 
we make sure our veterans who have served this Nation get 
exactly what they need so they can return to their maximum 
potential after they have sacrificed so much for this Nation.
    With that, I ask unanimous consent that all members have 5 
legislative days to revise and extend their remarks and to 
include extraneous material. Without objection, so ordered.
    Before I close the hearing, I would like to make a request 
that you submit to this Health Subcommittee and to the 
Veterans' Affairs Committee the plan that you are talking 
about. We would like to see that to make sure that the 
veterans' best interests are served.
    Dr. Petzel. We will do that, Madam Chairwoman.
    Ms. Buerkle. Thank you, again, to our witnesses for being 
here, to our audience members, and to the Subcommittee members, 
to my Ranking Member, for joining in today's conversation.
    This hearing is now adjourned.
    [Whereupon, at 5:33 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              

           Prepared Statement of Chairwoman Ann Marie Buerkle
    Good morning and welcome to today's Subcommittee on Health Hearing, 
``Optimizing Care for Veterans with Prosthetics: An Update.''

    Today's hearing is a continuation of a discussion we began almost 3 
months ago when this Subcommittee heard from veterans with amputations, 
members of our veterans service organizations (VSOs), and officials 
from the Department of Veterans Affairs (VA) to review VA's capability 
of delivering state-of-the-art prosthetic care to veterans with 
amputations and the impact of VA's planned prosthetic procurement 
reforms.
    These reforms will, among other things, take prosthetic purchasing 
authority away from prosthetic specialists and transfer it to 
contracting officers.
    As our veterans so eloquently described in May, prosthetic care is 
unlike any other care that VA provides and, when we make the mistake of 
treating it as such, no less than the daily and ongoing functioning and 
quality of limb of our veterans is at stake.
    I was very troubled to hear our veterans voice such strong 
opposition to the proposed procurement reforms, arguing forcefully that 
they would lead to substantial delays in care for veterans with 
amputations and clinical judgments regarding veterans needs being 
overridden by individuals with little to no experience in prosthetic 
care.
    In mid-June--following our hearing--I sent a letter, along with 
Ranking Member Michaud, to the Secretary requesting that the Department 
respond to a number of questions and provide certain materials 
regarding the strategy, plans, and criteria used to consider, develop, 
design, implement, and evaluate the proposed reforms and the pilot 
programs that preceded them.
    Our goal was to understand the analysis VA employed to develop the 
reforms and what was behind the decision that this was the best idea 
for our veterans, especially those who have experienced loss of life as 
a result of service to our country.
    Sadly, the Department's response--which came a week after the 
deadline requested in our letter--did not provide the information or 
the level of detail we asked for and did nothing to assure me that the 
plan would be effective or that our veterans concerns were unfounded.
    To the contrary, a close review of the materials VA provided leads 
me to believe that the reforms were developed without careful and 
thorough consideration. It leads me to believe they were developed 
without sufficient input from veterans themselves, veteran service 
organization advocates, or other stakeholders.
    It leads me to believe that they were developed and implemented, 
after being tested for a very short time, at a small number of 
locations, with very limited feedback. It leads me to believe they were 
developed without adequately measuring their impact on patient care. It 
leads me to believe they were developed without safeguards in place to 
ensure veterans and clinician's wishes are respected and timeliness 
goals are met.
    It is concerning that VA would move forward with instituting large-
scale changes that so directly impact veteran patients in this way. If 
my concerns are groundless--and I hope that they are--I want VA, in 
explicit detail, to explain why.
    During our last hearing, our veterans and VSOs spoke loud and 
clear. Now it is time for VA to do the same.
    Again, I thank you all for joining us this afternoon. I now 
recognize our Ranking Member, Mr. Michaud for any remarks he may have.

                                 

           PREPARED STATEMENT OF HON. ROBERT A. PETZEL, M.D.

    Chairwoman Buerkle, Ranking Member Michaud, and Members of the 
Subcommittee: thank you for the opportunity to speak about the 
Department of Veterans Affairs' (VA) prosthetics procurement reforms. I 
am accompanied today by Mr. Philip Matkovsky, Assistant Deputy Under 
Secretary for Health for Administrative Operations, Veterans Health 
Administration (VHA); Dr. Lucille Beck, Chief Consultant, 
Rehabilitation Services, Director, Audiology and Speech Pathology, and 
Acting Chief Consultant, Prosthetics and Sensory Aids Service, VHA; and 
Ford Heard, Associate Deputy Assistant Secretary, Office of Acquisition 
and Logistics.
    VA testified before this Subcommittee and the Subcommittee on 
Oversight and Investigations in May 2012 regarding our efforts to 
maintain the high quality of prosthetics VA provides to Veterans while 
instituting reforms to improve compliance with the Federal Acquisition 
Regulation (FAR), the Competition in Contracting Act, and to improve 
our management of government resources. In follow-up to those hearings, 
the Chairwoman and Ranking Member submitted a letter to the Department 
on June 21, 2012, requesting a response by July 6, 2012, that would 
offer additional information about these reforms. On July 12, 2012, VA 
submitted information to the Subcommittee on Health to begin to address 
the Subcommittee's request. Our interest was in responding as quickly 
as possible to your request, and we regret our submission of July 12, 
2012, did not sufficiently address your concerns.
    You also have asked for an update on the actions the Department has 
taken to reform the prosthetics procurement process since the May 
hearings. I am pleased to report that on May 23, 2012, VA issued a 
Memorandum to the field advising them that it is VA's policy that those 
engaged in the ordering of biological implants comply with the FAR and 
VA Acquisition Regulation (VAAR). This Memorandum provides further 
information and guidance to staff to ensure they understand our 
objectives and procedures. That Memorandum states that the VA official 
performing the purchasing activity is to comply with a physician's 
prescription when it is indicated. Furthermore, in response to your 
advice to transition our warrant procurement program with deliberation 
and caution, VA extended the date for finalizing this transition from 
July 1 until September 30, 2012. This transition continues with ongoing 
communication and coordination with the Veterans Integrated Service 
Networks to ensure that procurement services are not disrupted. We are 
closely monitoring the staffing levels for our contracting 
organizations, the workload levels, and most importantly, the 
timeliness of the procurement actions.
    Finally, you asked me to address the potential impact these 
prosthetics procurement reforms could have on Veterans. As we testified 
in May, we do not believe that Veterans will be adversely impacted in 
any way. We believe that many of our reform efforts are acceptable to 
all concerned parties. For example, VA is instituting more audits of 
purchases to ensure that we are getting the best value for our dollar 
when we procure a prosthetic or other device. We also will begin 
tracking our purchasing trends to identify when and where we can enter 
into negotiated contracts. Further, we are streamlining and 
standardizing elements of the procurement process to reduce variation 
and accelerate purchases so Veterans can receive their devices and 
equipment faster.
    The proposals that have raised interest are our plans to 
standardize the purchasing of prosthetics and other devices, and our 
plan to transition procurement decisions to warranted contracting 
officers. On the first plan, many of the products VA purchases are 
either going to become a part of a Veteran or will be a critical part 
of their daily lives, helping them walk, work, and interact with their 
families. We understand the critical value these devices offer, and the 
independent clinical judgment of our providers will remain fully 
intact. This aspect guides the decision-making of our leadership and 
will be preserved in our policies and procedures. Clinicians, in 
consultation with Veterans, will decide what devices we procure. Our 
reforms are designed only to modify how we procure them. When products 
are generally available and interchangeable, competitive procurements 
may be appropriate, and we are hoping that in the long term we can 
develop a catalog that will facilitate, more cost effective purchasing 
decisions.
    On the second plan, concerning the transitioning of procurement 
decisions, I again emphasize that this is only changing how we 
purchase, not what we purchase. By shifting to contracting specialists, 
we can ensure that we secure fair and reasonable prices for products 
while still delivering state-of-the-art care.
    In conclusion, VA has been engaging in prudent and appropriate 
reform to improve the business processes governing the procurement of 
prosthetic devices for Veterans. We take great care to ensure that 
these changes improve the accountability of these purchases while 
maintaining the high quality of care and clinical decision-making 
critical to Veterans' health care. Clinicians determine the prosthetic 
needs of Veterans as a part of their clinical care, and VA procures the 
devices necessary to achieve personal clinical outcomes. Our reform 
efforts will not disturb this arrangement, which will remain the 
centerpiece of prosthetics care in VA. We appreciate the opportunity to 
appear before you today to discuss this important program. My 
colleagues and I are prepared to answer your questions.
   Deliverables from the United States Department of Veterans Affairs
Date: August 23, 2012

Source: Hearing Deliverables

Inquiry from: HVAC Health

    Context of Inquiry: During the HVAC Health prosthetics hearing 
three deliverables were noted:

    There were three deliverables from yesterday's prosthetics hearing:

    1.  How many prosthetic devices were procured during the pilot?
    2.  Please forward the new organizational plan to merge prosthetics 
and rehabilitation.
    3.  Please provide a timeline for how long it will take to complete 
the new organization.

    Response:

    Question: How many prosthetic devices were procured during the 
pilot

    Response: The table below provides this information.
    It is important to recall that only those purchases above $3,000 
will transition to a VHA Contracting Officer. There are roughly 90,000 
prosthetics transactions executed per year that are greater than 
$3,000.

 Table: Number of Prosthetics Purchases made by VHA Contracting Officers

                       VISN 11       VISN 20       VISN 6       Totals

  January                57           131           145           333
  February              122           149           224           495
  March                 263           174           299           736
Subtotal                442           454           668         1,564

  April                 268           166           194           628
  May                   283           207           358           848
  June                  226           273           314           813
  July (partial         149           150           272           571
   month)
TOTAL                 1,368         1,250         1,806         4,424

    Question: Please forward the new organizational plan to merge 
prosthetics and rehabilitation

    Response: Veterans Health Administration (VHA) has aligned 
Prosthetic and Sensory Aids Service (PSAS) with the Office of 
Rehabilitation Services (ORS), to become the Office of Rehabilitation 
and Prosthetic Services. The reason for this change is to align both 
prosthetic and clinical programs together in order to optimally 
coordinate and deliver programmatic services, policies, and guidance 
for medical equipment/items and medical rehabilitative services that 
promote the health, independence, and activities of daily living for 
Veterans and Servicemembers. This realignment of existing VHA resources 
will further improve management and oversight of prosthetic purchasing, 
inventory control, and clinical coordination in order to better utilize 
appropriated resources. The cost of this realignment is budget neutral, 
the newly aligned office will remain within VHA Office of Patient Care 
Services, and the administrative processes (e.g., budget, HR, planning 
and programming, etc) for PSAS and ORS will be completely aligned by 
September 30, 2012.
    Please see the attached document for a summary of the plan to merge 
prosthetics and rehabilitation.

    Question: Please provide a timeline for how long it will take to 
complete the new organization

    Response: The Office will be completely aligned by September 30, 
2012.

                                 

Summary of Plan to Merge Prosthetic and Sensory Aids Service and Office 
                       of Rehabilitation Services
       Health Subcommittee, House Committee on Veterans' Affairs
                 Deliverable from July 31, 2012 Hearing

    Prosthetic and Sensory Aids Service (PSAS) is core to the mission 
of VA and affects millions of Veterans and Servicemembers on a short-
term, long-term, and ongoing basis. PSAS should be realigned to most 
effectively support clinical services and engineer optimal programmatic 
policies, guidance, and regulations to advance the full continuum of 
health care practices in VHA. The Office of Patient Care Services will 
merge with the Office of Rehabilitation Services (ORS) and become the 
Office of Rehabilitation and Prosthetic Services in the Office of 
Patient Care Services.
    This alignment will improve management and oversight of prosthetic 
purchasing, inventory control, and clinical coordination in order to 
better utilize appropriated resources. Transition of PSAS under ORS, 
with appropriate staffing, will position VHA to most effectively 
accomplish that mission. The Prosthetic and Orthotic Program will be 
aligned as a separate clinical section under ORS.
    The Office of Inspector General (OIG) recently completed reviews, 
and Congress has subsequently held hearings regarding concerns about 
oversight and management of procurement, inventory management, and 
prosthetic services in VHA. Consequently, the pressing need for 
improved management, coordination, and alignment of PSAS within 
clinical services has become increasingly important.
    The transition of PSAS to a national program office under ORS will:

      Establish and improve processes for providing prescribed 
and clinically appropriate, state-of-the-art prosthetic devices, 
sensory aids, and equipment in the most economical and timely manner;
      Manage national contracting processes for prosthetic 
devices including strategic sourcing;
      Maintain a system of information management for 
procurement requests; and
      Align standards of care and clinical practices and PSAS 
purchasing.

    PSAS does not currently have the appropriate organizational 
structure or staffing to support clinical services aligned with 
programmatic policies. If PSAS is realigned with ORS, the resulting 
programmatic re-engineering of regulations and policies, contracting 
processes, clinical prescription practices, budget accounting, 
information technology, and reallignment of key staff will: (1) 
leverage pre-existing infrastructure and resources and (2) identify and 
mitigate vulnerabilities.
    Dr. Lucille Beck, Chief Consultant, will lead this realignment and 
the Office of Rehabilitation Services will become the Office of 
Rehabilitation and Prosthetic Services (OR&PS). Implementation of this 
realignment will commence, with initial organizational restructure 
completed within 30 days. Personnel recruitment actions will be 
initiated to fill existing personnel vacancies. The existing PSAS 
budget will be realigned under OR&PS, with accountability fully 
transitioned by the beginning of fiscal year (FY) 2013.
    The success of this realignment will be monitored through a number 
of strategic outcomes, including: improved timeliness in providing 
prescribed items to Veterans; increased numbers of national contracts 
and compliance with contracts; compliance and accuracy in recording and 
tracking serial numbers of critical items (e.g., surgical implants); 
accurate budget execution to ensure appropriate allocation for specific 
purpose funds (i.e., prosthetic items, devices, and equipment) and 
balance of expenditures to obligations; and implementation of data 
accuracy monitors to track and compare issuance codes for consistency 
across national averages. Further, programmatic policies, regulations, 
and processes for prosthetic services will be aligned with those of 
clinical services to improve consistency and continuity of services to 
Veterans--from clinical prescription, to procurement, provision, and 
verification of receipt of appropriate prosthetic items.

                                 
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