Clinicians Cited Their Clinical Expertise and Patient Need as the Most Important Factors Influencing Their Decision of Which Surgical Implant to Use

Many clinicians we interviewed at the four selected VAMCs stated that  the specific needs of the patient were one of the two main factors that  influenced their decision of which surgical implant to purchase and use. Implants’ Availability on Certain Purchase Contracts Influenced Clinicians’ Decisions

Clinicians who performed surgical procedures for which implants were  available on a national committed-use contract stated that they typically  used one of the implants available on this type of contract, unless the use  of these items was not appropriate, for example, for certain complex  clinical indications. Clinicians at the four VAMCs we visited were often not aware of what  surgical implants were available on an FSS contract, even though these  contracts are preferred to open market purchases under the VAAR. Selected VAMCs Did Not Fully Comply with VHA Requirements for Documenting Surgical Implant Purchases from the Open Market

We found that among the four VAMCs we visited: (1) none fully complied  with requirements for obtaining waivers for open-market purchases of  surgical implants; (2) none fully complied with additional requirements for  documenting open-market purchases, which are part of VHA’s new  process for surgical implant purchases over $3,000; and   (3) three of the four did not comply with a requirement related to  consignment agreements with surgical implant vendors. Again, no timelines have been  established to complete streamlining efforts, according to VHA officials. Three of Four VAMCs Did Not Comply with a VHA Requirement Pertaining to Consignment Agreements with Surgical Implant Vendors

Officials at three of the four VAMCs we visited told us that the VAMCs  had purchasing agreements with open-market vendors to provide surgical  implants to the VAMCs on consignment, but that these agreements were  not always in compliance with a VHA requirement that consignment  agreements be authorized by a VHA contracting officer. VA and VHA Found Noncompliance with Requirements for Surgical Implant Purchases over $3,000 but Neither Took Steps to Ensure that Corrective Actions Were Taken

Oversight of VAMCs’ and NCOs’ compliance with VHA’s new process for  surgical implant purchasing over $3,000 includes efforts by both VA’s  Office of Acquisition and Logistics and VHA’s Office of Procurement and  Logistics. According to VHA prosthetics officials, VHA’s assessments  cover the following metrics:  the extent to which VAMCs purchased surgical implants from a  national committed-use contract or obtained a waiver allowing  clinicians to use an alternative item;  the extent to which VAMCs entered the serial number and lot number  for each surgical implant purchase;  the timeliness of each surgical implant purchase—that is, the time  from which a clinician requests a surgical implant to the time the item  is purchased;  the extent to which clinicians’ purchase requests for surgical implants  have been fulfilled; and  the extent to which amounts obligated for surgical implant purchases  have been recorded in the prosthetics purchasing system. As of November 2013, VHA did not have a policy governing how  deficiencies identified through these assessments should be addressed. Conclusions

To its credit, VHA has established national committed-use contracts for a  number of surgical implants, which can help VHA effectively leverage its  purchasing power. Furthermore, steps could be taken to improve clinicians’  awareness of high quality surgical implants available on FSS contracts,  which may also lead to a further reduction in open-market purchases. VA’s and VHA’s oversight of compliance with surgical implant purchasing  requirements does not ensure that corrective action is taken to address  identified noncompliance, which could lead to potentially serious issues  remaining unaddressed. Recommendations for Executive Action

To expand the volume of surgical implants purchased from existing,  higher-priority contracts and to improve compliance and oversight related  to purchasing requirements, we recommend that the Secretary of the  Department of Veterans Affairs take the following five actions:
Create a plan that includes timelines for evaluating the benefits of  developing additional national committed-use contracts for surgical  implants and establishing these contracts. We  selected these four VAMCs because they are all classified by the  Veterans Health Administration (VHA) as surgically complex facilities,  serve large veteran populations and are located in different regional  networks (See table 2). To examine VA and VHA’s oversight of compliance with surgical implant  purchasing requirements, we obtained and analyzed VA and VHA  documentation on existing or planned monitoring activities, including audit  plans and reports documenting deficiencies in VAMCs’ purchasing of  surgical implants; interviewed VA and VHA procurement and prosthetics  officials; and assessed VA and VHA’s monitoring activities in the context  of federal standards for internal control.
Why GAO Did This Study

VHA spending on surgical implants--such as stents and bone and skin grafts--has increased to about $563 million in fiscal year 2012. Clinicians at VAMCs determine veterans' needs and request implant purchases either from a contract or from the open market (i.e., not from an existing contract). VHA requirements--which implement relevant federal regulations--include providing justifications for open-market purchases.
GAO was asked to evaluate implant purchasing by VHA. This report examines (1) factors that influence clinicians' decisions to use particular implants when multiple, similar items are available; (2) selected VAMCs' compliance with pertinent VHA requirements for documenting open- market purchases; and (3) VA's and VHA's oversight of VAMC compliance with implant purchasing requirements. GAO visited four VAMCs that serve large veteran populations and are dispersed geographically. GAO interviewed clinicians at the VAMCs, reviewed pertinent statutes, regulations, and policies and reviewed a sample of implant purchases from different vendors. These results cannot be generalized to all VAMCs but provide insights. GAO also interviewed VA and VHA officials and reviewed agency documents.

What GAO Found

Clinicians at the four Department of Veterans Affairs Medical Centers (VAMC) GAO visited said that patient need and their clinical expertise were the main factors influencing their decisions of which surgical implants to use. Also, clinicians in certain specialties said they typically used one of the implants available on VA-negotiated national committed-use contracts, which generally establish a fixed price for several models of nine types of surgical implants that the Veterans Health Administration (VHA) commits to using nationally. VHA recognizes the need for expanding items covered under these contracts to fully leverage its purchasing power but, as of October 2013, had not identified additional implants to include on such contracts or established timelines for doing so. GAO also found that the availability of implants on VA-negotiated federal supply schedule (FSS) contracts rarely influenced clinicians' decisions on which implant to use. Clinicians were often not aware of the availability of surgical implants on FSS contracts, which are negotiated by one of VA's contracting offices, but for which VHA clinicians have little or no input. Clinicians told GAO that in some cases they may avoid implants on FSS contracts due to their concerns about the quality of these items.
In regard to compliance with VHA's requirements for justifying open-market purchases of surgical implants, which VHA adopted to promote adherence to relevant federal regulations, GAO found the following:
None of the four VAMCs fully complied with requirements for obtaining waivers for open-market purchases of surgical implants because they were focusing on other priorities or lacked awareness of the requirements, among other factors.
None of the four VAMCs fully complied with additional requirements for documenting open-market purchases that are part of a new process VHA implemented in fiscal year 2013 for surgical implant purchases over $3,000. VAMC and regional office officials attributed noncompliance mainly to insufficient VHA guidance and VA staff's inexperience in completing these requirements.
Three of the four VAMCs did not comply with a VHA requirement pertaining to agreements with vendors that provided surgical implants to them on consignment. These agreements, which clinicians likely established to ensure timely access to implants, do not comply with a VHA requirement that consignment agreements must be authorized by a VHA contracting officer.
The Department of Veterans Affairs (VA) and VHA have begun conducting oversight of surgical implant purchases over $3,000 to assess compliance with VHA's new requirements. However, VHA officials told GAO that VA and VHA have not ensured that corrective action has been taken to address identified noncompliance because of poor communication between VA and VHA and insufficient staffing to follow up on identified issues. Furthermore, VHA assesses each VAMC's performance on metrics established for surgical implant purchasing, but it does not have a policy governing how any identified deficiencies should be addressed nor the corrective actions to be taken by VAMCs and VHA's regional networks.

What GAO Recommends

GAO recommends that VA identify implants and establish a timeline to expand the volume that can be purchased from VA-negotiated contracts and improve compliance with and oversight of purchasing requirements. VA concurred with these recommendations.