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Hon. Mike Coffman

The Honorable Mike Coffman, Chairman, Oversight and Investigations

Good morning. This hearing will come to order.

I want to welcome everyone to today’s hearing titled, “Vendors in the O.R. – VA’s Failed Oversight of Surgical Implants.”

This hearing examines serious problems with the tracking and handling of surgical implants within the VA and follows through on procurement issues revealed in a previous hearing by this subcommittee.

According to multiple sources, VA medical centers have allowed surgical implant vendors to participate in hands-on treatment administered to veterans.  Based on my staff’s initial findings, I asked GAO to investigate these allegations regarding veteran health care and to determine what policies are currently in place.

GAO substantiated that several veterans had received skin grafts that had been applied directly by skin graft vendors.  GAO found that VHA requires each medical facility to develop its own policy on vendor access, resulting in varying degrees of specificity regarding their participation in patient care.

These findings raise serious questions about the extent of vendor involvement in patient care at VA facilities and the lack of clear guidance regarding vendor access.  VA’s own consent form as well as industry best practices state that vendor representatives may be present to provide technical advice but may not physically participate in the procedure.  However, GAO’s investigation confirms that these policies are being unevenly applied or unenforced.  Clearly, national guidance and oversight is necessary to protect veterans who undergo surgical implant procedures. 

There are also significant problems with how VA handles and tracks surgical implants in veterans.  Previous VA OIG audits criticized the VHA for weak internal controls that jeopardize VA’s ability to identify and notify patients in the event of FDA product recall.  According to GAO’s report, released on Monday, these concerns remain and have not been remedied.  For some clinical specialties, including gastroenterology, interventional radiology, and pulmonary, identifying information on implants was not tracked in any system.  It is troubling to consider that for these specialties, VHA was unable to verify that the items purchased were actually implanted in the patients for whom they were intended.

In 2008, VA began developing the Veterans Implant Tracking and Alert System (VITAS) to track and retrieve identifying information—including the lot and serial number—of surgical implants placed in patients VHA-wide.  Unfortunately, according to GAO, this system’s development was suspended at the end of fiscal year 2012 due to data-reliability challenges, and as of December 2013, development of VITAS has not resumed, limiting VHA’s ability to identify and locate patients who have received implants.

Additionally, GAO’s report shows that VA has failed to make sufficient progress with prosthetic procurement reform.  In a May 30, 2012 hearing, this subcommittee revealed that VA medical centers and VHA regional network contracting officers misused waiver authority to spend nearly 3 billion dollars on open market purchases of prosthetics, including surgical implants, rather than procure them through competitive contracts, including those with businesses on the Federal Supply Schedule. 

As a result of the hearing, VA acknowledged that there are often several options available for implants and that disadvantaged veteran owned small businesses and others offering these products were being unfairly excluded from consideration. VA indicated that it would implement reforms so that non-competitive and sole source purchases would require justification on a case by case basis.   

GAO’s report does contain some good news:  VA has made some progress with obtaining national committed use contracts for non-biological implants, such as artificial joints, cardiac pacemakers, heart valves, and coronary stents.  Use of these national committed use contracts is the most favored method of procurement for implants under the Federal Acquisition Regulations. However, GAO also reported that no such contracts have been negotiated for biological implants such as skin and bone grafts.  Moreover, contrary to a memorandum, dated May 23, 2012, from Assistant Deputy Under Secretary Matkovsky, GAO found biological implants were rarely ordered from the Federal Supply Schedule at each VA medical center it visited.  According to GAO, over-use of the waiver process continues. It reported that none of the medical centers it visited procure surgical implants in compliance with waiver requirements for open market purchases. Finally, it is most disappointing to note that while VA and VHA now have procurement oversight components, GAO reported that they have failed to impose corrective action for these deficiencies.  

In conclusion, VA must continue to implement reforms so that medical centers procure surgical implants that meet patient needs while also ensuring best value.  More importantly, VA and VHA must pay much better attention to patient safety concerns regarding surgical implants.  It is way past time for VA to develop national policies that set forth the parameters for vendor access to treatment facilities and that implement sufficient oversight controls.  Additionally, proper tracking of surgical implants is a problem that has been unresolved for far too long and it must be remedied post haste.

With that, I now recognize Ranking Member Kirkpatrick for her opening statement.