In fiscal year 2009, the type of prosthetic items for which VA spent the  largest amount was surgical implants, which accounted for 27 percent of  the more than $1.6 billion VA spent for prosthetic items that year. PSAS Roles and Responsibilities

After physicians and other clinicians at VA medical facilities determine the  prosthetic needs of veterans and prescribe specific prosthetic items to  meet those needs, PSAS is responsible for processing the prescriptions  and providing the prescribed prosthetic items to individual veterans. Specifically, PSAS officials in VA’s central  office establish national policies and procedures on VA’s provision of  prosthetic items; allocate VA specific purpose funding for prosthetic items  among the 21 VISNs; monitor the spending of this specific purpose funding  and, if appropriate, facilitate the reallocation of funding among the VISNs;  and establish and monitor mechanisms, such as performance measures  and goals, to evaluate VA’s performance in providing prosthetic items. In Fiscal Years 2005 through 2009, Actual Spending Needs for Prosthetic Items Differed from Estimates, Resulting in the Reallocation of Funding Available for Prosthetic Items

In each of fiscal years 2005 through 2009, VA’s actual spending needs for  prosthetic items differed from the estimates VA reported in its  congressional budget justifications for those years, on which the initial  allocation to PSAS for prosthetic items was based. These differences—about $82 million in  fiscal year 2006 and about $150 million in fiscal year 2007—represented 7  and 12 percent, respectively, of VA’s actual spending for prosthetic items  during those fiscal years. In fiscal years 2005, 2008, and 2009, VA spent  about $91 million, $83 million, and $183 million more, respectively, than  originally estimated (9, 6, and 11 percent, respectively, of VA’s spending  for prosthetic items in those fiscal years). PSAS officials reported that they do  perform some analysis to identify new trends in VA’s spending for  prosthetic items, which are taken into account when allocating specific  purpose funding for prosthetic items. In addition to the efforts VA made at the national level to reallocate funds  to better match specific purpose funding for prosthetic items with actual  spending needs, for 3 of the 5 fiscal years we reviewed, some VISNs and  VAMCs used general purpose funds for prosthetic items. PSAS Uses Administrative Data and Veteran Feedback Mechanisms to Monitor Its Performance in Processing and Providing Prosthetic Items to Veterans

PSAS has performance measures that monitor the timeliness of its  processing of prosthetic prescriptions and a number of veteran feedback  mechanisms to identify problems in how it provides prosthetic items to  veterans. In fiscal year 2009, PSAS’s performance measures showed that  nearly all of its prescriptions for prosthetic items met its performance  goals. While in many cases, PSAS’s performance measures serve as a  reasonable proxy for monitoring the timeliness of veterans’ receipt of their  prosthetic items, they may miss some instances in which veterans  experience long wait times. Recognizing this shortcoming, PSAS officials  rely on a number of other mechanisms—such as feedback submitted  through telephone calls from veterans and receipt of veteran evaluation  cards—to obtain information on veteran satisfaction that may alert them  of timeliness or other problems not reflected in its performance measures. VA Is Making Local, Regional, and National Efforts to Improve PSAS’s Performance

Officials at PSAS’s central office, the VISNs, and the VAMCs in our sample  told us about a number of local, regional, and national efforts to enhance  management effectiveness and efficiency and improve prosthetic services  for veterans. PSAS’s central office has recommended that VISNs adopt  this management structure for PSAS for more than a decade, but as part of  VA’s overall decentralized management structure, each VISN’s leadership  has the authority to determine how PSAS is managed in its region. These contracts also  help ensure that the quality of the prosthetic items provided to veterans is  consistent across the country. This appendix presents the total costs and number of prosthetic  items provided to veterans in fiscal years 2005 through 2009. For fiscal year  2009, the total costs for prosthetic items for VISNs ranged from about $34  million in VISN 5 (Capitol Health Care Network) to about $164 million in  VISN 8 (VA Sunshine Healthcare Network).
Why GAO Did This Study

In fiscal year 2009, the Department of Veterans Affairs (VA) provided more than 59 million prosthetic items to more than 2 million veterans. After VA physicians and other clinicians prescribe prosthetic items, VA's Prosthetic and Sensory Aids Service (PSAS) is responsible for processing prescriptions and providing prosthetic items to veterans. PSAS is also responsible for managing VA's spending for prosthetic items--more than $1.6 billion in fiscal year 2009. In fiscal year 2008, this spending exceeded VA's budget estimates. Each year, VA makes an initial funding allocation for prosthetic items, and may reallocate by increasing or decreasing the funding available for prosthetic items during the fiscal year. GAO was asked to examine (1) how, for fiscal years 2005 through 2009, VA's spending for prosthetic items compared to budget estimates, and the extent to which VA reallocated funding for prosthetic items; (2) how PSAS monitors its performance in processing and providing prosthetic items to veterans; and (3) the efforts VA has undertaken to improve PSAS's performance. GAO reviewed VA's spending and funding allocation data for fiscal years 2005 through 2009. GAO also reviewed documents and interviewed VA officials at headquarters, 5 of VA's 21 regional health care networks, called VISNs, and 13 VA medical centers (VAMC).

What GAO Found

VA spending for prosthetic items for each of fiscal years 2005 through 2009 differed from budget estimates, varying in amounts--both under and over budget estimates--ranging from 6 to 12 percent of VA's overall spending for prosthetic items during the 5 fiscal years. In fiscal years 2005, 2008, and 2009, VA spent about $91 million, $83 million, and $183 million more, respectively, than VA originally estimated for its congressional budget justification. Conversely, in fiscal years 2006 and 2007, VA spent about $82 million and about $150 million less, respectively, for prosthetic items than estimated. VA officials reported that they did not perform analysis to determine the specific causes of these differences, but that new trends are taken into account when allocating funding to be used for prosthetic items. In an effort to more closely match funds available for prosthetic items to actual spending needs, VA reallocated the funding available to PSAS and relied on VISNs and VAMCs to address the need for additional funding for prosthetic items at specific VA locations. For example, in fiscal year 2008, when an additional $83 million in funding was required for prosthetic items, VA reallocated $56 million to PSAS and VISNs and VAMCs covered $27 million in spending for prosthetic items. PSAS has performance measures that monitor the timeliness of its processing of prosthetic prescriptions and a number of veteran feedback mechanisms to identify problems in how it provides prosthetic items to veterans. In fiscal year 2009, PSAS's performance measures showed that nearly all of its prescriptions for prosthetic items met its performance goals. While in many cases, PSAS's performance measures serve as a reasonable proxy for monitoring the timeliness of veterans' receipt of their prosthetic items, they may miss some instances in which veterans experience long wait times. Recognizing this shortcoming, PSAS officials rely on a number of other mechanisms--such as telephone calls from veterans and receipt of veteran evaluation cards--to obtain information on veteran satisfaction that may alert them to timeliness or other problems not reflected in their performance measures. VA is making a number of efforts at various levels to improve its performance in providing prosthetic items to veterans. For example, in 7 of VA's 21 VISNs, PSAS personnel at the VISN level centrally manage the provision of prosthetic items at all of the VAMCs in their region. According to VA officials in several VISNs that have adopted this centralized management structure, giving VISN-level PSAS personnel more authority has allowed local PSAS personnel at the VAMCs to devote more time to meeting veterans' needs, and in some cases, has enhanced management effectiveness and efficiency. At the national level, in fiscal year 2009, PSAS had 49 national contracts for prosthetic items, which, according to PSAS officials, help ensure that the quality of prosthetic items provided to veterans is consistent across the country. VA provided technical comments that GAO incorporated as appropriate.