Department of Veterans Affairs 

Office of Inspector General 

Healthcare Inspection 

Review of the Veterans Health 

Administration’s Use of 

Appropriated Funds for Research 

Report No. 08-03007-80 February 27, 2009

VA Office of Inspector General 

Washington, DC 20420 
To Report Suspected Wrongdoing in VA Programs and Operations 

Telephone: 1-800-488-8244 between 8:30AM and 4PM Eastern Time,

 Monday through Friday, excluding Federal holidays

 E-Mail: vaoighotline@va.gov 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Contents 

Page 

Executive Summary ..............................................................................................i

Introduction ..........................................................................................................1 

Summary.......................................................................................................................... 1

Background...................................................................................................................... 1

Scope and Methodology .................................................................................................. 2

Results and Conclusions ....................................................................................3 

Issue 1. Use of the FY07 Medical Research Appropriation........................................... 3

Issue 2. Conditions for Which Veterans Received Medical Care in FY08 .................... 5

Issue 3. Medical Needs and Research Challenges.......................................................... 7 

Conclusions and Comments ............................................................................................ 8 

Appendixes 

A. Under Secretary for Health Comments...................................................................... 9

B. VERA Research Support FY 2007 .......................................................................... 11 

C. Diagnostic Codes of Conditions for Which Veterans Received Care in FY08....... 14 

D. OIG Contact and Staff Acknowledgments .............................................................. 21

E. Report Distribution................................................................................................... 22

VA Office of Inspector General 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Executive Summary 

As required by the Military Construction, Veterans Affairs, and Related Agencies 

Appropriation Bill, fiscal year 2009 (FY09), the VA Office of Inspector General (OIG), 

Office of Healthcare Inspections (OHI), completed a review of VA research and its 

relevance to veterans. Because Medical and Prosthetic Appropriation funds are available 

to VA for 2 years, this report addresses the FY07 appropriation. The purposes of the 

evaluation were to (1) describe the project areas for which these funds were obligated, (2) 

delineate the medical requirements of veterans as demonstrated by veteran medical care 

utilization, and (3) evaluate the relevance of funded research to the demonstrated medical 

requirements of veterans. 

This review addressed (1) the obligations of funds by the commodities purchased by the 

grant holders and division managers and (2) the categorization of research protocols 

according into Designated Research Areas (DRAs). DRAs were developed by VHA 

R&D as a mechanism for reporting to Congress by categorizing the areas of research to 

which appropriated funds have been assigned. 

For a perspective on whether VA research efforts are appropriate to the needs of veterans, 

we analyzed the use of VA healthcare facilities during FY08 (October 1, 2007 – 

September 30, 2008). We used the principal discharge diagnosis for all hospitalizations 

and ranked each of these diagnoses by frequency. For the 100 most frequently recorded 

discharge diagnoses, we combined those for closely related conditions and added 

additional diagnoses for related conditions not included in the top 100. For an 

assessment of outpatient conditions, we used the primary encounter diagnosis and 

followed the same procedure as for hospitalizations. 

For VA, the medical conditions for which veterans were hospitalized and/or treated as 

outpatients in FY08 correspond well to VHA’s DRAs. In particular, mental illness, 

substance abuse, and the common disorders of aging were the most frequent reasons 

veterans utilized VA health care facilities. These conditions correspond closely to the top 

three areas of VA research funding: mental health, aging, and health systems. VA’s 

research into health systems is especially relevant because of its emphasis on the delivery 

of and access to high quality care. In addition, VA devotes substantial funding to 

research on traumatic injury and to military and environmental exposures. 

We concluded that appropriated funds for VA research address the broad spectrum of 

medical issues with which veterans contend. Nevertheless, VHA’s reporting on 

appropriated funds for research could be more transparent and detailed through the use of 

current technologies. 

VA Office of Inspector General i 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Introduction 

Summary 

As required by the Military Construction, Veterans Affairs, and Related Agencies 

Appropriation Bill, fiscal year 2009 (FY09), the VA Office of Inspector General (OIG), 

Office of Healthcare Inspections (OHI), completed a review of VA research and its 

relevance to veterans. Because Medical and Prosthetic Appropriation funds are available 

to VA for 2 years, this report addresses the FY07 appropriation. The purposes of the 

evaluation were to (1) describe the project areas for which these funds were obligated, (2) 

delineate the medical requirements of veterans as demonstrated by veteran medical care 

utilization, and (3) evaluate the relevance of funded research to the demonstrated medical 

requirements of veterans. 

Background 

In concert with title 38 U.S.C., section 7303, the Medical and Prosthetic Research 

Program (Medical Research) focuses on research into the special healthcare needs of 

veterans. VA is tasked with applying new knowledge to veterans’ health care. 

Management of VA medical research is housed in the Office of Research and 

Development (R&D) within the Veterans Health Administration (VHA). VA’s R&D 

mission is to “discover knowledge and create innovations that advance the health and 

care of veterans and the nation."

1 

VA R&D operations incorporate several administrative divisions. The Biomedical 

Laboratory division supports basic science, preclinical research. The Clinical Science 

division focuses on developing treatments to medical conditions affecting veterans 

through a variety of strategies including clinical trials. The Health Services division 

supports studies to identify and promote improvements in the delivery of health care to 

veterans. Developing approaches for assisting those who are coping with serious illness 

and impediments is the focus of the Rehabilitation division. The Program for Research 

Integrity Development and Education (PRIDE) and the Technology Transfer Program are 

two additional groups that support the VA research mission. 

VA research is designed to address VA strategic goals with emphasis on research topics 

relevant to service-connected disabilities and illness. The research priorities established 

by President’s Interagency Science and Technology group also influence the 

determination of VA research priorities. VA strives to ensure that research is of the 

highest quality. A peer review system in accordance with the Federal Advisory 

Committee Act works to ensure research grants are awarded based on merit. Local 

facility support is required before a research grant is funded. Additional oversight is 

provided by the VA National Research Advisory Council (which meets twice a year). 

1

 FY 2009 Budget Submission, Department of Veterans Affairs, Vol 2. Pg 2A-1. 

VA Office of Inspector General 1 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Advice from a wide variety of specialty scientific groups, which advise VA leadership on 

topics of particular national interest, provide VA leadership with input from national 

experts. VA R&D’s PRIDE group undertakes a number of educational activities to 

ensure the protection of veterans who serve as subjects in VA research activities. 

Total VA medical R&D resources for FY07 were approximately $1,690 million. These 

funds were derived from several sources. The Military Construction, Veterans Affairs, 

and Related Agencies Appropriations Bill provided funding under the Medical and 

Prosthetic Research account of $413 million, with an additional $32.5 million available 

from the 2007 Emergency Supplemental legislation for a total of approximately $446 

million. The Military Services, Medical Administration, and Medical Facilities 

Appropriation of the Military Construction, Veterans Affairs, and Related Agencies 

Appropriations Bill provided $373 million in one year research support funding which 

was distributed through the Veterans Equitable Resource Allocation (VERA) process (see 

Appendix B for a station breakout of VERA funding). Funding from other federal 

resources was approximately $669 million, with other non-federal funding of 

approximately $202 million. This review will focus upon the uses for which the Medical 

and Prosthetic Research funds ($446 million) were applied, as these were the primary 

funds under the control of VA to ensure research addresses the needs of veterans. The 

Medical Research Appropriation supported approximately 3,175 full time employees in 

FY07. 

Scope and Methodology 

For this review we examined budget and other relevant documents and obtained 

additional data from VHA financial managers. To elucidate the process by which 

appropriated funds are assigned to specific areas of research and to determine how 

research projects are reported by subject area, we spoke with research administrators 

within VA and at the National Institutes of Health (NIH). 

For one perspective on whether VA research efforts are appropriate to the needs of 

veterans, we analyzed the use of VA healthcare facilities during FY08 (October 1, 2007 – 

September 30, 2008). We used the principal discharge diagnosis for all hospitalizations 

and ranked each of these diagnoses by frequency.2

 For the 100 most frequently recorded 

discharge diagnoses, we combined those for closely related conditions and added 

additional diagnoses for related conditions not included in the top 100. For an 

assessment of outpatient conditions, we used the primary encounter diagnosis3

 and 

followed the same procedure as for hospitalizations. Only outpatient encounters with 

associated diagnostic codes were included. 

2

 VA Patient Treatment File. 3 VA National Patient Care file. 

VA Office of Inspector General 2 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

We conducted the review in accordance with Quality Standards for Inspections published 

by the President’s Council on Integrity and Efficiency. 

Results and Conclusions 

Issue 1: Use of the FY07 Medical Research Appropriation 

The use of the FY07 Medical Research Appropriation can be analyzed in several ways. 

This review will address (1) the obligations of funds by the commodities purchased by 

the grant holders and division managers and (2) the categorization of research protocols 

according into Designated Research Areas (DRAs). DRAs were developed by VHA 

R&D as a mechanism for reporting to Congress by categorizing the areas of research to 

which appropriated funds have been assigned. 

Department of Veterans Affairs budget documents4

 provide data on the use of the FY07 

research appropriation by sub-activity in the table below. 

Table 1 - Obligations by Sub-Activity 

(Dollars in Thousands) 

2007 2007 

Projects 

Research Programs (Investigator Initiated) $266,157 1590 

Career Development $53,841 434 

Centers of Excellence $45,758 87 

Special Research Initiatives $6,347 

Service Directed Research $2,137 20 

Research Compliance (PRIDE) $2,908 

R&D Specific Costs $53,370 

Franchise Fund $1,258 

Reimbursable Programs $47,424 

Total Obligations $479,200 

Total Appropriation $446,480 

4

 Ibid. 

VA Office of Inspector General 3 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Data on the obligation of funds by commodity class for FYs 07–09 is provided in Table 2 

below. 

Table 2 - Obligations by Object 

2007 2008 2009 

Personal Services $257,723 $272,520 $277,449 

Travel & Transportation of Persons: 

Employee Travel $4,037 $4,116 $4,116 

All Other $206 $62 $62 

Subtotal $4,243 $4,178 $4,178 

Transportation of Things $161 $173 $173 

Communication, Utilities & Misc. $2,600 $3,562 $3,562 

Printing & Reproduction $366 $448 $448 

Other Services: 

Medical Care Contracts & Agree. w/Insts. 

& Orgs. $43,297 $65,275 $62,186 

Fee Basis – Medical & Nursing Services, 

On-Station $759 $1,144 $1,144 

Consultants & Attendance $10,832 $16,331 $16,331 

Scarce Medical Specialist $918 $1,384 $1,384 

Repair of Furniture & Equipment $1,669 $2,516 $2,516 

Maintenance & Repair Services $516 $778 $778 

Contract Hospital Cost $0 $10 $10 

Administrative Contractual Services $90,179 $134,116 $100,474 

Training Contractual Services $593 $894 $894 

Subtotal $148,763 $222,448 $185,717 

Supplies & Materials $30,995 $24,472 $24,472 

Equipment $34,158 $25,827 $20,827 

Lands & Structures $191 $174 $174 

Total Obligations $479,200 $553,802 $517,000 

VA Office of Inspector General 4 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

A review of Research R&D funding by DRA provides data upon which to gain an 

understanding of the relative funding of research areas. 

Table 3 - Designated Research Areas by FY07 Appropriation 

(Dollars in Thousands) 

2007 2007 

Actual Percent 

Acute & Traumatic Injury $29,431 6.59 

Aging $42,805 9.59 

Autoimmune, Allergic & Hematopoietic Disorders $14,554 3.26 

Cancer $35,377 7.92 

CNS Injury & Associated Disorders $23,973 5.37 

Degenerative Diseases of Bones & Joints $6,020 1.35 

Dementia & Neuronal Degeneration $8,583 1.92 

Diabetes & Major Complications $24,484 5.48 

Digestive Diseases $12,558 2.81 

Emerging Pathogens/Bio-Terrorism $331 0.07 

Health Systems $36,921 8.27 

Heart Disease $30,919 6.93 

Infectious Diseases $22,614 5.06 

Kidney Disorders $14,257 3.19 

Lung Disorders $7,677 1.72 

Mental Illness $53,450 11.97 

Military Occupations & Environmental Exposures $30,371 6.80 

Other Chronic Diseases $204 0.05 

Sensory Loss $15,617 3.50 

Special Populations $15,797 3.54 

Substance Abuse $20,537 4.60 

$446,480 100.00 

VA R&D funds are distributed nationally to VA researchers through several programs 

designed to support researchers with a variety of research experience and expertise across 

a broad basic science, clinical, and epidemiologic framework. 

Issue 2: Conditions for Which Veterans Received Medical 

Care in FY08 

One approach to an evaluation of VHA’s use of its appropriation for research is to 

consider the conditions for which patients received care. During FY08, 465,195 

individual patients (median age, 61) were discharged following 804,913 hospitalizations. 

Nearly 60 percent of all principal discharge diagnoses are included in 20 diagnostic 

groups, as shown in Table 4. 

VA Office of Inspector General 5 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Diagnostic Group 

Number of 

hospitalizations Percent 

1 Ischemic Heart Disease 47,606 5.9 

2 Alcohol Related Diseases 41,691 5.2 

3 Affective Disorders 38,827 4.8 

4 Disorders of the Kidney & Bladder 32,712 4.1 

5 Respiratory & Chest Symptoms 29,266 3.6 

6 Heart Failure 27,140 3.4 

7 Pneumonia 26,581 3.3 

8 Chronic Airway Obstruction 21,980 2.7 

9 Musculoskeletal Disorders 21,976 2.7 

10 Cerebrovascular Disease 19,923 2.5 

11 Cardiac Dysrhythmias 19,666 2.4 

12 Schizophrenia & Related Disorders 18,877 2.3 

13 PTSD & Adjustment Reaction 17,183 2.1 

14 General Symptoms 15,788 2.0 

15 Skin & Subcutaneous Tissue Infections 14,552 1.8 

16 Drug Related Diseases 14,522 1.8 

17 Diabetes Mellitus 13,460 1.7 

18 Fluid, Electrolyte & Acid-Base Disorders 9,699 1.2 

19 Anemia 8,636 1.1 

20 Malignancies of the Lungs & Pleura 8,214 1.0 

All other diagnoses 356,614 44.3

 TOTAL 804,913 100.0 

Table 4. Principal discharge diagnoses for VA acute care hospitalizations in FY08, 

by diagnostic group. PTSD = post-traumatic stress disorder. See Appendix C for specific 

ICD-9 codes associated with each diagnostic group. 

During FY08, 5,186,305 individual patients (median age, 63) had 65,336,412 outpatient 

clinical encounters at VA healthcare facilities. Approximately half of all primary 

encounter diagnoses are included in 20 diagnostic groups, as shown in Table 5. 

VA Office of Inspector General 6 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Diagnostic Group 

Number of 

Encounters Percent 

1 Diabetes Mellitus 3,288,163 5.0 

2 PTSD & Adjustment Reaction 3,264,231 5.0 

3 Hypertension 3,145,922 4.8 

4 Musculoskeletal Conditions 3,077,843 4.7 

5 Drug Related Diseases 2,446,823 3.7 

6 Affective Disorders 2,396,110 3.7 

7 Eye Disorders 1,991,618 3.0 

8 Alcohol Related Diseases 1,440,120 2.2 

9 Schizophrenia & Related Disorders 1,429,094 2.2 

10 Dental Disorders 1,353,425 2.1 

11 Hearing Loss 1,070,660 1.6 

12 Hyperlipidemia 1,022,832 1.6 

13 Skin & Nail Disorders 936,123 1.4 

14 Ischemic Heart Disease 879,807 1.3 

15 Chronic Airway Obstruction 709,525 1.1 

16 Respiratory & Chest Symptoms 701,022 1.1 

17 Anxiety & Related Disorders 643,494 1.0 

18 Cardiac Dysrhythmias 557,481 0.9 

19 Malignant Neoplasms of the Prostate 472,738 0.7 

20 Psychosocial Problems 451,636 0.7 

All other diagnoses 34,057,745 52.1 

TOTAL 65,336,412 100.0 

Table 5. Primary encounter diagnoses for VA outpatient visits during FY08, by 

diagnostic group. PTSD = post-traumatic stress disorder. See Appendix C for specific 

ICD-9 codes associated with each diagnostic group. 

Issue 3: Medical Needs and Research Challenges 

Any approach to establishing a focus for medical research must incorporate numerous 

factors. For VA, the recognized health care needs of veterans is one important 

component, and medical conditions for which veterans were hospitalized and/or treated 

as outpatients in FY08 correspond well to VHA’s DRAs (Table 3). In particular, mental 

illness, substance abuse, and the common disorders of aging were the most frequent 

reasons veterans utilized VA health care facilities. These conditions correspond closely 

to the top three areas of VA research funding: mental health, aging, and health systems. 

VA’s research into health systems is especially relevant because of its emphasis on the 

delivery of and access to high quality care. In addition, VA devotes substantial funding 

to research on traumatic injury and to military and environmental exposures. 

VA Office of Inspector General 7 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

The classification of research projects by DRA for reporting purposes is somewhat 

arbitrary. Many research protocols can plausibly be classified in several ways. For 

example, research into the management of behavioral problems in patients with 

Alzheimer’s Disease could conceivably be categorized in several of VHA’s DRAs – 

Aging, Dementia & Neuronal Degeneration, Health Systems, Mental Illness, Other 

Chronic Diseases, and Special Populations. Adding to the difficulties inherent in 

classifying projects is VHA’s method for assigning protocols to DRAs, which is the 

responsibility of the portfolio manager for projects in a specific area. 

Transparency in the use of appropriated and non-appropriated funds with respect to their 

use and results is important information for taxpayers, the medical community, and 

veterans. VHA’s reporting on appropriated funds for research could be more transparent 

and detailed through the use of available technologies. For example, the Research 

Portfolio Online Reporting Tool (RePort) used by NIH permits a more in-depth analysis 

of the uses of research funds with a richer set of categories for protocols.5 

Aside from the problem of categorizing any specific research effort, attempts to direct 

research into a particular area of interest are resisted by the realities of scientific inquiry. 

The degree to which scientific knowledge has advanced and the methods available to 

investigators varies widely across disciplines. 

Conclusions and Comments 

Appropriated funds for VA research address the broad spectrum of medical issues with 

which veterans contend. VHA’s reporting of how research funds are utilized could be 

more detailed and transparent. The Under Secretary for Health concurred with the draft 

report and agreed that improvements in reporting how research funds are utilized would 

further strengthen VHA's research program. See Appendix A pages 9–10 for the full text 

of these comments. 

(original signed by:) 

JOHN D. DAIGH, JR., M.D. 

Assistant Inspector General for 

Healthcare Inspections 

5 http://report.nih.gov/rcdc/. Accessed February 17, 2009. 

VA Office of Inspector General 8 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Appendix A 

Under Secretary for Health Comments 

Department of 

Veterans Affairs Memorandum 

Date: Feb 26, 2009 

From: Under Secretary for Health (10) 

Subject: OIG Draft Report, Review of the Veterans Health 

Administration’s Use of Appropriated Funds for Research, 

Project No. 2008-03007-HI-0195 (WebCIMS 423547) 

To: Assistant Inspector General for Health Care (54) 

1. I have reviewed the draft report, and I appreciate the thoughtful review of 

VHA's Medical and Prosthetics Research Program. I concur with the draft 

report and agree that improvements in reporting how research funds are 

utilized would further strengthen VHA's research program. 

2. I am encouraged by your recognition that any approach to establishing a 

focus for medical research must incorporate numerous factors. As you 

concluded in your report, in addition to disease prevalence and cost, there are 

other factors that appropriately determine the research agenda, including the 

impact of a disease or condition on the overall health of the patient, the 

ripeness of a particular problem for scientific inquiry, and VHA's systems 

capability for undertaking the necessary investigations. Nevertheless, there is 

a close relationship between the areas of greatest research funding and those 

with greatest health care burden. VHA carefully maintains this relationship 

by using a funding mechanism that allows clinician-investigators to submit 

research proposals that will ultimately benefit patients whom they see every 

day in their clinics. VHA's Office of Research and Development (ORD) 

supplements this mechanism by providing special funding opportunities for 

issues, such as traumatic limb injuries, that do not reflect a high proportion of 

the patient population, but instead represent areas of investigation that are 

uniquely important to VA's care of Veterans. In addition, ORD also funds 

projects for systems research intended to improve VHA's quality of care. 

3. VHA has for some time recognized the limitations imposed by both the 

classification of research projects according to Designated Research Areas 

VA Office of Inspector General 9 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Page 2 

OIG Draft Report, Review of the Veterans Health Administration’s Use of 

Appropriated Funds for Research, Project No. 2008-03007-HI-0195 

(WebCIMS 423547) 

(DRAs) and the hand-coding of research proposals. As a result, VA and the 

National Institutes of Health (NIH) recently entered into an interagency 

agreement by which electronic submission and review of VHA research 

proposals is managed using a system developed by NIH. The initial 

implementation of this change is complete, although some application types, 

such as those supporting career development awards, await development of 

corresponding NIH software. 

4. ORD is coordinating with NIH to determine whether their automated 

Research Portfolio Online Reporting Tool, otherwise known as the Research, 

Condition, and Disease Categories (RCDC) classification, can be made 

available for VA use. NIH first utilized this tool in FY 2008 to analyze FY 

2007 expenditures and wants to ensure that the tool is working properly 

before discussing its use with other Federal agencies. VHA and NIH 

discussions continue, but are complicated by the fact that current NIH RCDC 

classifications do not adequately align with some conditions that are 

particularly important to VA's care of Veterans. Thus, while I am optimistic 

that improvements in reporting are forthcoming, I also recognize that any 

automated reporting tool will have shortcomings when viewed from certain 

perspectives. 

5. Thank you for the opportunity to review this report. If you have any 

questions, please contact Margaret Seleski, Director, Management Review 

Service (10B5) at (202) 461-8470. 

(original signed by:) 

Michael J. Kussman, MD, MS, MACP 

VA Office of Inspector General 10 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Appendix B 

National Research Support Cost from Medical Appropriation6 FY 07 

 Station Name FTEE Direct Cost Indirect 

Cost 

Total 

Research 

Support Cost 

TOGUS, ME 0 0 895 895 

WHITE RIVER JCT, VT 3 494,308 985,096 1,479,404 

BEDFORD, MA 12 1,608,763 1,537,595 3,146,358 

BOSTON, MA 37 5,674,826 5,474,045 11,148,871 

MANCHESTER, NH 0 0 138,436 138,436 

PROVIDENCE, RI 4 751,508 995,586 1,747,094 

WEST HAVEN, CT 24 4,665,980 3,444,090 8,110,070 

UPSTATE N.Y. HCS, NY 33 5,231,107 1,814,204 7,045,311 

BRONX, NY 32 5,049,311 2,794,468 7,843,779 

EAST ORANGE, NJ 18 2,636,926 1,606,099 4,243,024 

MONTROSE VA HUDSON HCS, NY 0 77,405 24,928 102,332 

N.Y. HARBOR HCS 12 2,154,711 1,429,559 3,584,270 

NORTHPORT, NY 6 1,089,852 413,178 1,503,029 

WILMINGTON, DE 0 0 0 0 

CLARKSBURG, WV 1 144,258 57,121 201,379 

COATESVILLE, PA 6 609,968 174,882 784,850 

LEBANON, PA 1 68,117 48,316 116,433 

PHILADELPHIA, PA 40 6,907,534 2,317,667 9,225,200 

PITTSBURGH-UNIV DR, PA 37 6,451,479 3,301,104 9,752,583 

WILKES BARRE, PA 1 76,654 19,382 96,036 

BALTIMORE, MD 36 6,753,701 4,837,276 11,590,977 

WASHINGTON, DC 11 1,817,551 1,516,009 3,333,560 

DURHAM, NC 45 6,960,706 4,237,499 11,198,206 

FAYETTEVILLE, NC 0 0 401 401 

HAMPTON, VA 1 131,765 75,138 206,903 

ASHEVILLE-OTEEN, NC 3 369,526 64,256 433,782 

RICHMOND, VA 9 1,729,651 621,716 2,351,367 

SALEM, VA 4 443,931 131,532 575,463 

SALISBURY, NC 4 469,408 136,662 606,070 

ATLANTA, GA 20 3,879,485 6,123,922 10,003,407 

AUGUSTA, GA 1 149,718 469,366 619,083 

BIRMINGHAM, AL 14 2,445,390 1,448,092 3,893,482 

CHARLESTON, SC 16 2,830,015 1,766,858 4,596,873 

COLUMBIA, SC 1 269,544 203,510 473,055 

TUSCALOOSA, AL 7 700,729 375,504 1,076,234 

BAY PINES, FL 4 713,294 413,932 1,127,226 

MIAMI, FL 39 4,995,685 2,022,327 7,018,012 

6

 This report is generated monthly using the Estimated ALB. This report calculates the percentage of indirect cost 

(cost centers 400 thru 599 and 957 excluding 543) of a facility’s overall cost (excludes the 300 series of cost centers, 

DSS Overhead and Depreciation ALBCCs). This percentage is then applied to the research (or education) ALBCCs 

(by account code) to derive the overall research (or education) support cost by facility. In addition, for the Research 

Support Cost Report, the Research Appropriation amount (obtained from FMS) is used to calculate its applicable 

support cost. 

VA Office of Inspector General 11 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Appendix B 

W PALM BEACH, FL 0 0 530 530 

N FL/S GA HCS 28 3,802,783 2,203,022 6,005,805 

SAN JUAN, PR 6 773,065 226,531 999,596 

TAMPA, FL 38 3,880,684 1,657,758 5,538,442 

HUNTINGTON, WV 2 247,435 47,254 294,689 

LEXINGTON-LEESTOWN, KY 7 1,336,973 549,156 1,886,129 

LOUISVILLE, KY 5 1,001,875 506,727 1,508,603 

MEMPHIS, TN 13 1,988,272 1,919,467 3,907,739 

MOUNTAIN HOME, TN 5 571,491 403,795 975,286 

VA MID TENN HCS NASH, TN 27 3,582,685 1,827,493 5,410,178 

CHILLICOTHE, OH 0 10,162 2,774 12,936 

CINCINNATI, OH 15 2,724,613 983,127 3,707,740 

CLEVELAND-WADE PARK, OH 15 2,563,642 2,977,465 5,541,107 

DAYTON, OH 2 341,856 77,382 419,238 

COLUMBUS-IOC, OH 1 42,832 9,292 52,125 

ANN ARBOR HCS, MI 37 5,597,534 3,287,078 8,884,612 

ILLIANA HCS DANVILLE, IL 1 109,803 24,408 134,211 

DETROIT VAMC, MI 4 748,228 911,433 1,659,661 

INDIANAPOLIS-10TH ST, IN 20 3,725,699 1,324,363 5,050,061 

NORTHERN INDIANA HCS, IN 0 0 1,552 1,552 

SAGINAW, MI 0 0 501 501 

VA CHICAGO HCS, IL 10 1,841,980 1,702,120 3,544,100 

NORTH CHICAGO, IL 3 455,944 118,090 574,034 

HINES, IL 10 1,879,871 2,976,227 4,856,099 

MADISON, WI 13 1,850,930 792,394 2,643,324 

MILWAUKEE, WI 16 2,727,009 1,295,478 4,022,487 

VAMC HEARTLAND-W KANSAS, MO 7 1,366,383 991,079 2,357,463 

VA HEARTLAND-E VH, MO 14 3,012,989 969,354 3,982,343 

GULF COAST HCS, MS 0 0 628 628 

FAYETTEVILLE, AR 2 126,797 22,823 149,620 

HOUSTON, TX 30 6,530,622 2,502,854 9,033,475 

JACKSON, MS 6 1,117,389 408,587 1,525,977 

LITTLE ROCK, AR 29 5,227,759 2,067,665 7,295,423 

MUSKOGEE,OK 0 11,442 2,818 14,260 

SOUTHEAST LA HCS, LA 2 190,074 374,043 564,117 

OKLAHOMA CITY, OK 4 719,239 521,280 1,240,519 

SHREVEPORT, LA 1 143,227 85,890 229,117 

DALLAS, TX 18 5,655,763 4,064,188 9,719,952 

SAN ANTONIO, TX 34 5,385,332 2,630,851 8,016,183 

VA CENTRAL TEXAS HCS, TX 3 501,503 247,901 749,405 

NEW MEXICO HCS, NM 10 2,037,262 3,541,651 5,578,913 

AMARILLO HCS 3 353,003 80,669 433,672 

PHOENIX, AZ 22 2,918,587 846,337 3,764,924 

SOUTHERN ARIZONA HCS, AZ 9 1,297,144 656,094 1,953,238 

DENVER, CO 21 3,764,558 1,792,344 5,556,903 

SALT LAKE CITY HTHCARE, UT 17 3,298,136 1,258,511 4,556,647 

SHERIDAN, WY 0 0 0 0 

BOISE, ID 2 265,317 164,887 430,204 

PORTLAND, OR 47 6,794,557 4,134,446 10,929,004 

VA Office of Inspector General 12 
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Appendix B 

VA ROSEBURG HCS, OR 0 0 622 622 

PUGET SOUND HCS, WA 73 12,256,099 4,712,960 16,969,059 

WALLA WALLA, WA 0 0 375 375 

HONOLULU, HI 0 6,014 85,740 91,754 

CENTRAL CALIFORNIA HCS, CA 4 698,042 170,164 868,207 

NCHC MARTINEZ, CA 9 1,871,001 1,085,642 2,956,643 

PALO ALTO-PALO ALTO, CA 39 7,873,922 6,117,634 13,991,556 

SIERRA NEVADA HCS, NV 1 274,806 77,169 351,976 

SAN FRANCISCO, CA 43 8,550,505 4,199,002 12,749,507 

VA SOUTHERN NEVADA HCS, NV 1 140,904 39,421 180,324 

VA LONG BEACH HCS, CA 15 2,389,201 1,288,390 3,677,591 

LOMA LINDA, CA 8 1,332,579 986,310 2,318,890 

VA SAN DIEGO HCS, CA 62 8,015,012 4,317,451 12,332,463 

GREATER LA HCS, CA 40 7,295,271 5,509,387 12,804,658 

FARGO, ND 0 0 11,232 11,232 

SIOUX FALLS, SD 0 0 35,408 35,408 

FORT MEADE, SD 2 191,997 48,196 240,193 

MINNEAPOLIS, MN 36 6,709,887 3,049,069 9,758,955 

VA NEB-WESTERN IA HCS, NE 29 4,692,913 3,849,349 8,542,262 

ST CLOUD, MN 0 0 164 164 

1,405 233,173,411 139,794,656 372,968,067 

VA Office of Inspector General 13 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Appendix C 

Diagnostic Codes of Conditions for Which Veterans Received Medical Care in FY08 

VHA adheres to ICD-9 nomenclature.7

 Diagnostic group headings used in this report 

describe logical sets of specific ICD-9 terms. 

Principal Inpatient Discharge Diagnostic Groups and Predominant Diagnoses 

Diagnosis Group and Predominant Diagnoses within Group Number (percent) 

1 Ischemic Heart Disease (410-414) 47,606 (6.4) 

COR ATHEROSCL NATV C VSL (414.01) 23,233 

SUBENDO INFARCT, INITIAL (410.71) 9,276 

COR ATHEROSCL UNSP TYP-VES (414) 3,558

 All other 11,539 

2 Alcohol Related Disease (291, 303, 305-305.03) 41,691 (5.6) 

ALCOH DEP NEC/NOS-CONTIN (303.91) 14,026

 ALCOHOL WITHDRAWAL (291.81) 7,484 

ALCOH DEP NEC/NOS-UNSPEC (303.9) 7,351 

AC ALCOHOL INTOX-CONTIN (303.01) 3,842

 All other 8,988 

3 Affective Disorders (296, 311, 292.84) 38,827 (5.2) 

DEPRESSIVE DISORDER NEC (311) 6,133 

DRUG-INDUCED MOOD DISORD (292.84) 4,840 

RECURR DEPR DISORDER-UNSP (296.3) 3,196 

DEPRESS DISORDER-UNSPEC (296.2) 2,607 

RECUR DEPR DISORDER-SEVERE (296.33) 2,579 

BIPOLAR DISORDER NOS (296.8) 2,498 

REC DEPR DISORDER-PSYCHOTIC (296.34) 2,197 

EPISODIC MOOD DISORD NOS (296.9) 1,834 

BIPOL I CUR DEPRES NOS (296.5) 1,831 

RECURR DEPR DISORDER-MOD (296.32) 1,414 

BIPOL I CURRNT MANIC NOS (296.4) 1,204 

BIPOLOR I CURRENT NOS (296.7) 1,169

 All other 7,325 

4 Disorders of Kidney & Bladder (580-599) 32,712 (4.4) 

URIN TRACT INFECTION NOS (599) 10,567 

ACUTE RENAL FAILURE NOS (584.9) 9,119 

CALCULUS OF KIDNEY (592) 1,840 

CALCULUS OF URETER (592.1) 1,659

 HEMATURIA (599.7) 1,487 

END STAGE RENAL DISEASE (585.6) 1,300

 All other 6,740 

5 Respiratory & Chest Symptoms (786) 29,266 (3.9) 

CHEST PAIN NEC (786.59) 16,965 

7

 Hart AC, Hopkins CA, Ford B, Eds. International Classification of Diseases, 9th Revision. Salt Lake City: Ingenix, 

2005. 

VA Office of Inspector General 14 
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Appendix C 

CHEST PAIN NOS (786.05) 8,418

 All other 3,883 

6 Heart Failure (428) 27,140 (5.5) 

CONGEST HEART FAIL UNSPECIFIED (428) 22,791

 All other 4,349 

7 Pneumonia (480-486, 507) 26,581 (3.6) 

PNEUMONIA, ORGANISM NOS (486) 19,481 

FOOD/VOMIT PNEUMONITIS (507) 3,289

 All other 3,811 

8 Chronic Airway Obstruction (490-492, 496) 21,980 (2.9) 

OBS CHR BRONC W(AC) EXAC (491.21) 16,884 

CHR AIRWAY OBSTRUCT NEC (496) 2,249 

OBS CHR BRONC W AC BRONC (491.22) 1,649

 All other 1,198 

9 Musculoskeletal Disorders (715, 717-722, 724) 21,976 (2.9) 

LOC OSTEOARTH NOS-L/LEG (715.36) 5,193 

LOC OSTEOARTH NOS-PELVIS (715.35) 1,924 

OSTEOARTHROS NOS-L/LEG (715.96) 1,800 

SPINAL STENOSIS-LUMBAR (724.02) 1,686 

LUMBAR DISC DISPLACEMENT (722.1) 1,484

 All other 9,889 

10 Cerebrovascular Disease (430-438) 19,923 (2.7) 

CRB ART OCCL, UNSP W/ CRB INF (434.91) 5,743 

OCCL&STEN/CAR ART W/O CRB INF (433.1) 3,887 

TRANS CEREB ISCHEMIA NOS (435.9) 3,040 

LATE EFF CEREB/VASC,HEMIPL,UNS (438.2) 1,106

 All other 6,147 

11 Cardiac Dysrhythmias (427) 19,666 (2.6) 

ATRIAL FIBRILLATION (427.31) 9,502 

CARDIAC DYSRHYTHMIAS NEC (427.89) 3,696 

ATRIAL FLUTTER (427.32) 2,787 

PAROX VENTRIC TACHYCARD (427.1) 1,354 

SINOATRIAL NODE DYSFUNCT (427.81) 1,079

 All other 1,248 

12 Schizophrenia & Related Disorders (295) 18,877 (2.5) 

SCHIZOAFFECTIVE DIS NOS (295.7) 4,899

 PARANOID SCHIZO-CHRONIC (295.32) 3,126 

PARAN SCHIZO-CHR/EXACERB (295.34) 2,376

 PARANOID SCHIZO-UNSPEC (295.3) 2,332 

SCHIZOAFFTV DIS-CHR/EXAC (295.74) 1,408 

SCHIZOPHRENIA NOS-UNSPEC (295.9) 1,154 

SCHIZOAFFECTIVE DIS-CHR (295.72) 1,030

 All other 2,552 

13 PTSD & Adjustment Reaction (309) 17,183 (2.3) 

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Appendix C 

POSTTRAUMATIC STRESS DIS (309.81) 13,821 

ADJUSTMNT DIS W DEPRESSN (309) 1,603

 All other 1,759 

14 General Symptoms (780) 15,788 (2.1) 

SYNCOPE AND COLLAPSE (780.2) 6,716 

OTHER CONVULSIONS (780.39) 2,630 

ALTERED MENTAL STATUS (780.97) 1,827 

DIZZINESS AND GIDDINESS (780.4) 1,352 

OTHER MALAISE AND FATIGUE (780.79) 1,150

 FEVER (780.6) 1,076

 All other 1,037 

15 Skin & Subcutaneous Tissue Infections (680-686) 14,552 (1.9) 

CELLULITIS OF LEG (682.6) 7,074 

CELLULITIS OF FOOT (682.7) 1,516 

CELLULITIS OF ARM (682.3) 1,303 

CELLULITIS OF TRUNK (682.2) 1,150

 All other 3,509 

16 Drug Related Disease (292, 304, 305.1-305.9) 14,522 (1.9) 

COCAINE DEPEND-CONTIN (304.21) 3,065 

COCAINE DEPEND-UNSPEC (304.2) 2,179

 DRUG WITHDRAWAL (292) 1,510 

OPIOID DEPENDENCE CONT (304.01) 1,416

 All other 6,352 

17 Diabetes Mellitus (250) 13,460 (1.8) 

DMII OTH NT ST UNCNTRLD (250.8) 4,228 

DMII WO CMP UNCNTRLD (250.02) 1,352 

DMII NEURO NT ST UNCNTRL (250.6) 1,240

 All other 6,640 

18 Fluid, Electrolyte & Acid-Base Disorders (276) 9,699 (1.3) 

 DEHYDRATION (276.51) 4,198

 HYPOSMOLALITY (276.1) 1,736

 HYPERPOTASSEMIA (276.7) 1,304

 All other 2,461 

19 Anemia (280-285) 8,636 (1.2) 

ANEMIA NOS (285.9) 2,677 

IRON DEFIC ANEMIA NOS 9280.9) 1,792

 All other 4,167 

20 Malignant Neoplasms of Lungs & Pleura (162-163) 8,214 (1.1) 

MAL NEO BRONCH/LUNG NOS (162.9) 3,206 

MAL NEO UPPER LOBE LUNG (162.3) 2,584 

MAL NEO LOWER LOBE LUNG (162.5) 1,137

 All other 1,287 

All other diagnoses 298,403 (40.0) 

TOTAL 746,702 (100.0) 

VA Office of Inspector General 16 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Appendix C 

Primary Outpatient Encounter Diagnostic Groups and Predominant Diagnoses 

Diagnostic Group and Predominant Diagnoses within Group Number (percent) 

1 Diabetes Mellitus (250, V65.46) 3,288,163 (5.0) 

DMII WO CMP NT ST UNCNTR (250) 2,510,378 

DMII WO CMP UNCNTRLD (250.02) 197,598 

DMII NEURO NT ST UNCNTRL (250.6) 158,441 

DMI WO CMP NT ST UNCNTRL (250.01) 83,503 

DMII OPHTH NT ST UNCNTRL (250.5) 79,507 

DMII OTH NT ST UNCNTRLD (250.8) 70,069

 All other 188,667 

2 PTSD & Adjustment Reaction (309) 3,264,231 (5.0) 

POSTTRAUMATIC STRESS DIS (309.81) 2,988,653 

ADJUST DIS W ANXIETY/DEP (309.28) 100,335 

ADJUSTMENT REACTION NOS (309.0) 83,937 

ADJUSTMNT DIS W DEPRESSN (309) 53,162

 All other 38,144 

3 Hypertension (401) 3,145,922 (4.8) 

HYPERTENSION NOS (401.9) 2,970,327

 BENIGN HYPERTENSION (401.1) 172,858 

MALIGNANT HYPERTENSION (401) 2,737 

4 Musculoskeletal Disorders (715, 717-722, 724) 3,077,843 (4.7) 

 LUMBAGO (724.2) 716,471 

JOINT PAIN-L/LEG (719.46) 274,631 

OSTEOARTHROS NOS-UNSPEC (715.9) 267,927 

JOINT PAIN-SHLDER (719.41) 246,609 

BACKACHE NOS (724.5) 238,763 

JOINT PAIN-ANKLE (719.47) 161,121 

OSTEOARTHRO NOS-OTH SITE (715.98) 105,571 

JOINT PAIN-PELVIS (719.45) 82,456 

OSTEOARTHROS NOS-L/LEG (715.96) 76,317 

LUMBOSACRAL NEURITIS NOS (724.4) 70,352

 All other 837,625 

5 Drug Related Disease 2,446,823 (3.7) 

 (292, 304, 305.1-305.9, V65.42) 

OPIOID DEPENDENCE UNSPECIFIED (304) 536,822 

TOBACCO USE DISORDER (305.1) 284,803 

COCAINE DEPEND-UNSPEC (304.2) 264,822 

COMB DRUG DEP NEC-UNSPEC (304.8) 221,750 

OPIOID DEPENDENCE CONT (304.01) 185,640 

OTHER DRUG ABUSE-UNSPEC (305.9) 169,559 

VA Office of Inspector General 17 
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Appendix C 

UNSPEC DRUG DEPEND NEC UNSPEC (304.9) 162,505 

COUNSEL-SUBS USE/ABUSE (V65.42) 131,493 

COCAINE DEPEND-CONTIN (304.21) 77,262

 All other 412,167 

6 Affective Disorders (296, 311, 292.84) 2,396,110 (3.7) 

DEPRESSIVE DISORDER NEC (311) 915,139 

RECURR DEPR DISORDER-UNSP (296.3) 339,994 

BIPOLOR I CURRENT NOS (296.7) 229,499 

RECURR DEPR DISORDER-MOD (296.32) 141,095 

DEPRESS DISORDER-UNSPEC (296.2) 84,416 

EPISODIC MOOD DISORD NOS (296.9) 74,981 

BIPOLAR DISORDER NOS (296.8) 70,395 

BIPOL I CURRNT MIXED NOS (296.6) 70,316

 All other 470,275 

7 Eye Disorders (365-379) 1,991,618 (3.0) 

REFRACTION DISORDER NOS (367.9) 206,767

 PRESBYOPIA (367.4) 205,544 

PRIM OPEN ANGLE GLAUCOMA (365.11) 179,089 

SENILE NUCLEAR CATARACT (366.16) 149,314 

CATARACT NOS (366.9) 144,451 

PREGLAUCOMA NOS (365) 103,737 

OPN ANGL W BORDERLN FIND (365.01) 86,008 

LEGAL BLINDNESS-USA DEF (369.4) 70,942 

GLAUCOMA NOS (365.9) 67,650

 All other 778,116 

8 Alcohol Related Disease (291, 303, 305-305.03) 1,440,120 (2.2) 

ALCOH DEP NEC/NOS-UNSPEC (303.9) 881,922 

ALCOH DEP NEC/NOS-REMISS (303.93) 163,238 

ALCOH DEP NEC/NOS-CONTIN (303.91) 149,133

 ALCOHOL ABUSE-UNSPEC (305) 136,735

 All other 109,092 

9 Schizophrenia & Related Disorders (295) 1,429,094 (2.2) 

 PARANOID SCHIZO-UNSPEC (295.3) 359,088 

SCHIZOAFFECTIVE DIS NOS (295.7) 311,640 

SCHIZOPHRENIA NOS-UNSPEC (295.9) 243,228

 PARANOID SCHIZO-CHRONIC (295.32) 231,641 

SCHIZOAFFECTIVE DIS-CHR (295.72) 107,919

 All other 175,578 

10 Dental Disorders (521-523, 525) 1,353,425 (2.1) 

DENTAL DISORDER NOS (525.9) 487,024 

UNSP ACQUIRED ABSENCE TEETH (525.1) 246,614 

VA Office of Inspector General 18 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Appendix C 

UNSPECIFIED DENTAL CARIES (521) 192,287 

ACCRETIONS ON TEETH (523.6) 161,975 

CHRONC PERIODONTITIS NOS (523.4) 87,277

 All other 178,248 

11 Hearing Loss (389, V53.2) 1,070,660 (1.6) 

SENSORNEUR LOSS COMB TYP (389.18) 429,416 

ADJUSTMENT HEARING AID (V53.2) 296,883 

SENSORNEUR HEAR LOSS NOS (389.1) 126,277 

HEARING LOSS NOS (389.9) 87,809 

SENSORY HEARING LOSS (389.11) 130,275 

12 Hyperlipidemia (272.0 - 272.4) 1,022,832 (1.6) 

HYPERLIPIDEMIA NEC/NOS (272.4) 768,310

 All other 254,522 

13 Skin & Nail Disorders (110, 702-703,706-709) 936,123 (1.4) 

DERMATOPHYTOSIS OF NAIL (110.1) 250,167

 ACTINIC KERATOSIS (702) 172,033 

SEBACEOUS CYST (706.2) 62,321

 All other 451,602 

14 Ischemic Heart Disease (410-414) 879,807 (1.3) 

CHR ISCHEMIC HRT DIS NOS (414.9) 372,503 

COR ATHEROSCL UNSP TYP-VES (414) 240,337 

COR ATHEROSCL NATV C VSL (414.01) 176,371

 All other 90,596 

15 Chronic Airway Obstruction (490-492, 496) 709,525(1.1) 

CHR AIRWAY OBSTRUCT NEC (496) 572,095 

BRONCHITIS NOS (490) 71,578

 All other 65,852 

16 Respiratory & Chest Symptoms (786) 701,022 (1.1) 

CHEST PAIN NOS (786.5) 231,574 

SHORTNESS OF BREATH (786.05) 133,295

 COUGH (786.2) 114,239 

CHEST PAIN NEC (786.59) 89,105

 All other 132,809 

17 Anxiety and Related Disorders (300) 643,494 (1.0) 

ANXIETY STATE NOS (300) 246,905 

DYSTHYMIC DISORDER (300.4) 163,264 

GENERALIZED ANXIETY DIS (300.02) 121,696

 All other 111,629 

18 Cardiac Dysrhythmias (427) 557,481 (0.9) 

ATRIAL FIBRILLATION (427.31) 374,242 

CARDIAC DYSRHYTHMIAS NEC (427.89) 64,494 

VA Office of Inspector General 19 
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Appendix C 

 All other 118,745 

19 Malignant Neoplasms of the Prostate (185) 472,738 (0.7) 

20 Psychosocial Problems (V60.0, V62.9) 451,636 (0.7) 

PSYCHOSOCIAL CIRCUM NOS (V62.9) 238,398 

LACK OF HOUSING (V60.0) 213,238 

All other diagnoses 34,057,745 (52.1)

 TOTAL 65,336,412 (100.0) 

VA Office of Inspector General 20 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Appendix D 

OIG Contact and Staff Acknowledgments 

OIG Contact John D. Daigh, Jr., M.D. 

(202) 461-4705 

Acknowledgments Jerome E. Herbers, Jr. M.D. 

Sandra Crawford 

VA Office of Inspector General 21 
Review of the Veterans Health Administration’s Use of Appropriated Funds for Research 

Appendix E 

Report Distribution 

VA Distribution 

Office of the Secretary 

Veterans Health Administration 

Assistant Secretaries 

General Counsel 

Veterans Integrated Service Network Directors (1-23) 

Non-VA Distribution 

House Committee on Veterans’ Affairs 

House Appropriations Subcommittee on Military Construction, Veterans Affairs, and 

Related Agencies 

House Committee on Oversight and Government Reform 

Senate Committee on Veterans’ Affairs 

Senate Appropriations Subcommittee on Military Construction, Veterans Affairs, and 

Related Agencies 

Senate Committee on Homeland Security and Governmental Affairs 

National Veterans Service Organizations 

Government Accountability Office 

Office of Management and Budget 

This report is available at http://www.va.gov/oig/publications/reports-list.asp. 

To Report Suspected Wrongdoing in VA Programs and Operations 

Call the OIG Hotline – (800) 488-8244 

VA Office of Inspector General 22