[Senate Hearing 114-737]
[From the U.S. Government Publishing Office]







                                                        S. Hrg. 114-737

   EXAMINING THE PROGRESS AND CHALLENGES IN MODERNIZING INFORMATION 
         TECHNOLOGY AT THE U.S. DEPARTMENT OF VETERANS AFFAIRS

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 22, 2016

                               __________

       Printed for the use of the Committee on Veterans' Affairs





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                     COMMITTEE ON VETERANS' AFFAIRS

                   Johnny Isakson, Georgia, Chairman
Jerry Moran, Kansas                  Richard Blumenthal, Connecticut, 
John Boozman, Arkansas                   Ranking Member
Dean Heller, Nevada                  Patty Murray, Washington
Bill Cassidy, Louisiana              Bernard Sanders, (I) Vermont
Mike Rounds, South Dakota            Sherrod Brown, Ohio
Thom Tillis, North Carolina          Jon Tester, Montana
Dan Sullivan, Alaska                 Mazie K. Hirono, Hawaii
                                     Joe Manchin III, West Virginia
                       Tom Bowman, Staff Director
                 John Kruse, Democratic Staff Director
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                            C O N T E N T S

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                             June 22, 2016
                                SENATORS

                                                                   Page
Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia........     1
Blumenthal, Hon. Richard, Ranking Member, U.S. Senator from 
  Connecticut....................................................     4
Rounds, Hon. Mike, U.S. Senator from South Dakota................    37
Hirono, Hon. Mazie K., U.S. Senator from Hawaii..................    39
Boozman, Hon. John, U.S. Senator from Arkansas...................    41
Tester, Hon. Jon, U.S. Senator from Montana......................    43
Tillis, Hon. Thom, U.S. Senator from North Carolina..............    46
Murray, Hon. Patty, U.S. Senator from Washington.................    48
Sullivan, Hon. Dan, U.S. Senator from Alaska.....................    50

                               WITNESSES

Shulkin, Hon. David J., M.D., Under Secretary of Health, U.S. 
  Department of Veterans Affairs; accompanied by LaVerne Council, 
  Assistant Secretary for Information Technology; Laura Eskenazi, 
  Executive in Charge and Vice Chairman, Board of Veterans' 
  Appeals; and Ron Burke, Assistant Deputy Under Secretary for 
  Field Operations, Veterans Benefits Administration.............     5
    Prepared statement...........................................     6
    Response to prehearing request submitted by Hon. Johnny 
      Isakson....................................................     2
    Response to posthearing questions submitted by:
      Hon. Richard Blumenthal....................................    53
      Hon. Jerry Moran...........................................    55
      Hon. John Boozman..........................................    56
Melvin, Valerie, Director of Information Management and 
  Technology Resources Issues, U.S. Government Accountability 
  Office.........................................................    13
    Prepared statement...........................................    15
 
   EXAMINING THE PROGRESS AND CHALLENGES IN MODERNIZING INFORMATION 
         TECHNOLOGY AT THE U.S. DEPARTMENT OF VETERANS AFFAIRS

                              ----------                              


                        WEDNESDAY, JUNE 22, 2016

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:38 p.m., in 
room 418, Russell Senate Office Building, Hon. Johnny Isakson, 
Chairman of the Committee, presiding.
    Present: Senators Isakson, Boozman, Cassidy, Rounds, 
Tillis, Sullivan, Blumenthal, Murray, Brown, Tester, and 
Hirono.

   OPENING STATEMENT OF HON. JOHNNY ISAKSON, CHAIRMAN, U.S. 
                      SENATOR FROM GEORGIA

    Chairman Isakson. I call this meeting of the Senate 
Veterans' Affairs Committee to order.
    Welcome, Dr. Shulkin and Ms. Melvin, for being here today. 
We look forward to your testimony.
    I will make a short opening statement and then refer to 
Ranking Member Blumenthal to make his. Then, we will go 
straight to your testimony and hopefully robust questions 
afterward.
    I would at the outset, with the permission of Dr. Shulkin, 
ask unanimous consent that the letter from Dr. Shulkin to me 
dated today be entered in the record, which is a good response 
that I appreciate very much, to this hearing.
    [The letter from Dr. Shulkin follows:]

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    Chairman Isakson. We welcome both of you and thank you for 
being here. As you well know, because you are both relative 
newcomers to the Veterans Administration in Washington--in 
fact, I remember when Senator Blumenthal and I were a part of 
your confirmation and your rapid ascent to positions of 
authority, which are to large credit to Bob McDonald. I want to 
make a side comment if I can right here, that the Veterans 
Administration (VA) has gotten a lot of criticism and they have 
earned a lot of it. Yet there have been a lot of things that 
have happened in the VA, which have been difficult to do that 
other people could not do that Bob McDonald has done. One of 
them was, in terms of physicians and medical information 
technology (IT), bringing two of the best leaders we have in 
the U.S. Government in Ms. Council and Dr. Shulkin for the work 
that they are doing.
    I think we will hear from the testimony the results of some 
of that work and how it is paying off, getting them moving in 
the right direction toward getting off of the High-Risk List. 
It is not easy to get on it, but once you get on it, it is hard 
to get off of it, and getting off of it takes a lot of 
concentration. This is one of the reasons we are having a 
benchmark hearing today, because I do not like to let reports 
sit on my desk, have a hearing, talk about them, and then never 
talk about them again. I like to come back a few months later 
and say, what kind of progress are we making, and I think that 
you both have done a great job in providing leadership to the 
VA and I know your testimony today will reveal a lot of the 
changes you have made to address the shortcomings that put the 
VA on the High-Risk List to start with.
    With that said, I would be happy to call on the Ranking 
Member, Senator Blumenthal from Kentucky--Connecticut. I do not 
know why I want to say Kentucky.
    Senator Blumenthal. I will take Kentucky. [Laughter.]

 OPENING STATEMENT OF HON. RICHARD BLUMENTHAL, RANKING MEMBER, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you very much to the panel for 
being here, most especially thank you to the Chairman for 
calling this hearing and for enabling us to hear directly from 
the VA leadership about an issue that has bedeviled the VA and, 
to some extent, the Department of Defense (DOD), for as long as 
I have been in the U.S. Senate, which is now close to 6 years. 
Every time we have raised the issue, we have been assured that 
it has been solved, and then we come back and ask the same 
question.
    The decades of unsuccessful attempts to establish an 
electronic health record system compatible across the VA and 
the DOD have caused hundreds of millions of taxpayer dollars to 
be wasted in efforts that have been abandoned. As I have said 
to Secretaries of both the VA and the DOD in a letter I sent 
earlier in Congress, these kinds of integrated, up-to-date 
electronic health care records are absolutely critical to 
ensure that health care providers have access to the health 
information they need to care for veterans and transitioning 
servicemembers, and the cost to VA has been very high, both in 
terms of budget and its credibility and reputation.
    As the VA undertakes efforts to transform its IT 
infrastructure, security has to be a top priority. Security 
breaches have to be prevented and remedied, because this 
information is sensitive and personal. I am hopeful that the 
new leadership that has taken over at the VA--and I join the 
Chairman in commending the Secretary for bringing into the VA 
that new leadership--will address these problems with the 
seriousness they deserve.
    So, I thank you very much for being here today.
    Chairman Isakson. We have two witnesses today: first is Dr. 
David Shulkin, and we are glad to have Dr. Shulkin join us 
today from the Veterans Administration; and second is Ms. 
Valerie Melvin from the Government Accountability Office. We 
are glad to have you here today. We look forward to hearing 
from both of you.
    I will recognize Dr. Shulkin first for up to 5 minutes.

   STATEMENT OF HON. DAVID SHULKIN, M.D., UNDER SECRETARY OF 
  HEALTH, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY 
   HON. LaVERNE COUNCIL, ASSISTANT SECRETARY FOR INFORMATION 
   TECHNOLOGY; LAURA ESKENAZI, EXECUTIVE IN CHARGE AND VICE 
CHAIRMAN, BOARD OF VETERANS' APPEALS; AND RON BURKE, ASSISTANT 
DEPUTY UNDER SECRETARY FOR FIELD OPERATIONS, VETERANS BENEFITS 
                         ADMINISTRATION

    Dr. Shulkin. Great. Thank you, Chairman Isakson, Ranking 
Member Blumenthal, Senator Brown, Senator Rounds. Thank you for 
having us here today.
    I am pleased to be with here today, to my left, Assistant 
Secretary for Information Technology, Hon. LaVerne Council, and 
to my right, the Executive in Charge and Vice Chairman of the 
Board of Veterans' Appeals, Ms. Laura Eskenazi, and to her 
right, the Assistant Deputy Under Secretary for Field 
Operations for the Veterans Benefits Administration, Mr. Ron 
Burke.
    I do know that the specific focus of today's hearing is on 
the modernization of information technology and that is really 
what we want to talk to you about. Yet, I do want to start by 
acknowledging the recent letter that I did get, Chairman 
Isakson, from you and many Members of the Senate Committee on 
Veterans' Affairs dated June 14, where you shared your concerns 
over access and quality and the pace at which we are making 
advances in Veterans Health Administration, VHA. I just wanted 
to let you know, I share your impatience, but I also want to 
let you all know that we really are making progress and we are 
making real progress. So, I want to address this just for a 
second and then get back to IT.
    As you know, our top priority has been access and fixing 
the access crisis. Through extended hours, through 
productivity, through hiring, new leases, our stand-downs, we 
have added 7.4 million hours of additional clinical time this 
past year. Our focus is on those veterans that need clinically 
prioritized care, and we have seen an 88 percent reduction in 
urgent consults since November of last year. Forty-six percent 
of our urgent appointments are done in the same day. We have 
seen a 20 percent reduction just since February in our most 
timely needed appointments for veterans. So, we are making real 
progress.
    Our veteran satisfaction data, where we ask veterans, show 
90 percent of our veterans using VA are satisfied or completely 
satisfied with their ability to get an appointment when they 
want it. And, as you know, we are making real progress with 
same day services for primary care and mental health. By the 
end of this year, we will have that in every medical center. 
So, we are working hard on that.
    In community care, the Choice program, in March 2014, we 
had 370,000 authorizations. That is more than double what we 
had a year ago. That is going to lead to two million 
appointments just in March alone. So, we really are making 
progress there also.
    I do really want to thank all of you for your support and 
leadership in Veterans First Act. That is so important, and I 
know we have your support. That is going to make the community 
care systems work much better for veterans, because we know it 
is still confusing and we want to make it work better than it 
is right now.
    In terms of quality, 74 percent of our medical centers 
improved quality last year in our Strategic Analytics for 
Improvement and Learning (SAIL) metrics, our very comprehensive 
analytic system. We saw a 35 percent reduction in mortality in 
our hospitals last year. We had a 52 percent reduction in 
urinary tract infections, an 18 percent reduction in central 
line infections, and a 17 percent reduction in length of stay. 
It is not only our data. Recent peer reviewed studies have 
shown VA health care's quality is better than the private 
sector in cardiac and in mental health in just two of the peer 
reviewed publications.
    Since launching our Diffusion of Excellence program, our 
best practices, we now have 160 best practices--we had talked 
to you about this, Senator Brown--being replicated in over 70 
medical centers. An effort like that had never been going on 
before at VA.
    I had mentioned to you I had 35 medical centers without a 
medical center director just a few months ago, the last time I 
was before you. We have recently selected 28 medical center 
directors. So, that is going to leave seven for us to continue. 
So, we are not done, but we are really making progress in 
filling the leadership positions. I recognize all of you know 
how important that is.
    So, this is not to say that we should be patted on the 
back, but this is to say the progress is real. We have a lot to 
do. I am impatient. We are going to continue at it. But, there 
really is real progress being made.
    Now, on IT, under Ms. Council's leadership, we are building 
on the legacy on VHA innovation in information technology, and 
there has never been a better working relationship between 
technologists and clinicians than there is right now. We are on 
track to close 100 percent of the Inspector General's IT 
recommendations by the end of 2017.
    In July 2015, we had 267,000 accounts with elevated 
privileges. That means people who have very open access to VA 
health care information technology. That number has been 
reduced by 95 percent. Since March 2015, we have identified 21 
million critical vulnerabilities. That is going to make us 
safer.
    Ms. Council has developed new policies to ensure that IT 
dollars are being spent appropriately. VA continues to outpace 
our projections on interoperability, so the Joint Legacy Viewer 
(JLV) has more than 138,000 VA users, and that is more than 4.6 
million veteran records are available through the JLV now. 
Finally, we are progressing with a new plan in the digital 
health platform that is going to prepare VA for the future in a 
way that is pretty exciting.
    So, Mr. Chairman, Senator Rounds, Senator Brown, thank you 
again for this opportunity to discuss these programs with you. 
Our team is here to answer your questions and we look forward 
to this hearing.
    [The prepared statement of Dr. Shulkin follows:]
Prepared Statement of David J. Shulkin, M.D., Undersecretary of Health, 
  Veterans Health Administration, U.S. Department of Veterans Affairs
    Good afternoon, Chairman Isakson, Ranking Member Blumenthal, 
distinguished Members of the Committee, thank you for the opportunity 
to discuss the progress that the Department of Veterans Affairs (VA) is 
making toward modernizing our information technology (IT) 
infrastructure to provide the best possible service to our VA business 
partners and our Nation's Veterans. I will also discuss scheduling, 
medical record sharing, and cyber security initiatives at the 
Department.
    I am pleased to be accompanied today by Assistant Secretary for 
Information Technology and Chief Information Officer, Ms. LaVerne 
Council, Ms. Laura Eskenazi, Executive in Charge and Vice Chairman, 
Board of Veterans Appeals, and Mr. Ron Burke, Assistant Deputy Under 
Secretary for Field Operations, Veterans Benefits Administration.
    In order to successfully carry out major IT initiatives and the 
department's consolidation of community care programs, VA will need a 
digital health platform and IT solutions that will meet the evolving 
needs of our Veterans, as well as support our streamlined business 
processes.
    The Veterans Health Administration (VHA) and the Office of 
Information & Technology (OI&T) are essential partners in delivering 
quality service to our Veterans. Meeting the demands of 21st century 
Veterans requires an interconnected system of systems, based on a 
single platform, which supports an electronic health record (EHR) as 
one of several components.
    IT plays a critical role in enabling care for our Nation's 
Veterans. VA's current EHR modernization efforts focus on delivering 
the tools for clinicians to provide more comprehensive, patient-
centered care and will support VA's progress to a digital health 
platform.
    We have made substantial progress in delivering new capabilities 
leveraging VistA, the VA Health System's EHR, while also strategizing 
for our future needs. While our efforts to modernize the VA's EHR and 
our plans for the digital health platform are not mutually exclusive; 
the success of the digital health platform is not dependent on any 
particular EHR.
                    vista evolution/interoperability
Current State of VistA Evolution
    VistA Evolution is the joint VHA and OI&T program for improving the 
efficiency and quality of Veterans' health care by modernizing VA's 
health information systems, increasing data interoperability with the 
Department of Defense (DOD) and network care partners, and reducing the 
time it takes to deploy new health information management capabilities. 
We will complete the next iteration of the VistA Evolution Program--
VistA 4--in fiscal year (FY) 2018, in accordance with the VistA Roadmap 
and VistA Lifecycle Cost Estimate. VistA 4 will bring improvements in 
efficiency and interoperability, and will continue VistA's award-
winning legacy of providing a safe, efficient health care platform for 
providers and Veterans.
    VA takes seriously its responsibility as a steward of taxpayer 
money. Our investments in VistA Evolution continue to make our 
Veterans' EHR system more capable and agile. VA has obligated 
approximately $510 million in IT Development funds to build critical 
capabilities into VistA since FY 2014, when Congress first provided 
specific funding for the VistA Evolution program. In addition, VA has 
obligated $151 million in IT Sustainment funds and $110 million in VHA 
funds for VistA Evolution. The VHA funding supports the operational 
resources needed for requirements development, functional design, 
content generation, development, training, business process change, and 
evaluation of health IT systems.
    It is important to note that VistA Evolution funding stretches 
beyond EHR modernization. VistA Evolution funds have enabled critical 
investments in systems and infrastructure, supporting interoperability, 
networking and infrastructure sustainment, continuation of legacy 
systems, and efforts--such as clinical terminology standardization--
that are critical to the maintenance and deployment of the existing and 
future modernized VistA. This work was critical to maintaining our 
operational capability for VistA. These investments will also deliver 
value for Veterans and VA providers regardless of whether our path 
forward is to continue with VistA, a shift to a commercial EHR platform 
as DOD is doing, or some combination of both.
Interoperability
    We know that a Veteran's complete health history is critical to 
providing seamless, high-quality integrated care and benefits. 
Interoperability is the foundation of this capability as it enables 
clinicians to provide Veterans with the most effective care and makes 
relevant clinical data available at the point of care. Access to 
accurate Veteran information is one of our core responsibilities. The 
Department is happy to report that, thanks to a joint VA and DOD 
effort, on April 8, 2016, we jointly certified, to the House and Senate 
Committees on Appropriations, Armed Services, and Veterans' Affairs 
that we have met the interoperability requirement of the National 
Defense Authorization Act for Fiscal Year 2014 (NDAA) Section 
713(b)(1). We have not stopped our modernization efforts, as we 
envision further enhancements that we know are necessary for greater 
efficiency.
    For front-line health care teams, the two most exciting products 
from VistA Evolution are the Joint Legacy Viewer (JLV) and the 
Enterprise Health Management Platform (eHMP). JLV is a clinical 
application that provides an integrated, chronological display of 
health data from VA and DOD providers in a common data viewer. VA and 
DOD clinicians can use JLV to access, on demand, the health records of 
Veterans and Active Duty and Reserve Servicemembers. JLV provides a 
patient-centric, rather than facility-centric view of health records in 
near real time. Veterans Benefits Administration (VBA) offices have 
access to JLV and can use it to expedite claims in certain situations.
    As of June 5, 2016, JLV had more than 170,000 authorized users in 
VA and DOD together, including 109,000 authorized VA users. The team is 
authorizing several thousand new users in VA each week. Of those VA 
users, more than 10,000 VBA personnel are authorized to use JLV to help 
process claims.
    The process for granting access to JLV is both simple and secure. 
JLV allows us to monitor access and usage by capturing logins, records 
viewed, activities by users, and transactions per hour. In the interest 
of privacy, security, and safety, JLV is restricted to health care 
providers and benefits administrators. Beneficiaries cannot access JLV, 
but this in no way affects their rights to copies of their health 
records upon request. We simultaneously maintain tight controls over 
the system and ensure efficient access to clinicians and benefits 
administrators who need it to do their jobs.
    JLV has been a critical step in connecting VA and DOD health 
systems, but it is a read-only application. Building on the 
interoperability infrastructure supporting JLV, the Enterprise Health 
Management Platform (eHMP) will ultimately replace our current read-
write point of care application. The current application, called the 
Computerized Patient Record System, or CPRS, has been in use since 
1996. CPRS served VA for many years as an industry leading point of 
care tool for providers, but it has many limitations for modern care 
delivery.
    eHMP will overcome these limitations, and provide a modern web 
application and clinical data services platform to support Veteran-
centric, team-based, quality driven care. eHMP will also natively 
support interoperability between VA, DOD and community health partners. 
We are deploying an initial read only version of eHMP now, and will 
begin deploying eHMP version 2.0 with write-back capabilities in the 
second quarter of FY 2017. Clinicians will be able to write notes and 
order laboratory and radiology tests in version 2.0. eHMP 2.0 will also 
support tasking for team-based management and communication with 
improved tracking to ensure follow through on tasks.
    Veterans will benefit from eHMP in several ways. For example, eHMP 
will provide a complete view of a Veteran's health history from all 
available VA, DOD and community provider sources of information. This 
will help providers develop a more complete picture of a Veteran's 
history, enabling better treatment decisions.
    The Veteran's voice will also be front and center in eHMP. 
Veterans' goals and preferences for care will become part of the 
information all providers see. eHMP will also provide a feature 
dedicated to recording and maintaining a Veteran's service history, 
including duty locations and what type of work they performed during 
their service. This information could then be used to proactively 
identify Veterans who may be at risk for certain health issues, or 
eligible for medical care based on locations or times in which they 
served.
    Veterans will also benefit from VA care teams who can work together 
more efficiently and effectively using the care coordination and task 
management tools eHMP will provide. For example, if a Veteran is 
referred for a particular test or consultation with a specialist, 
workflow management tools in eHMP will ensure the right activities have 
taken place in advance of the referral. This will help reduce wasted or 
unneeded appointments, save time for both Veterans and providers. In 
turn, if providers are more efficient, they are able to serve more 
Veterans, which will have an overall positive impact on Veteran access 
to care. All of these efforts align with the goals outlined by the 
Federal Health Information Technology Strategic Plan 2015-2020 and 
Connecting Health and Care for a Nation: A Shared Nationwide 
Interoperability Roadmap, produced by the Office of the National 
Coordinator for Health Information Technology (ONC) in collaboration 
with VA, DOD and other partners.
    Upon completion, eHMP will support the following capabilities:

     Veteran-centric health care--eHMP will allow clinicians to 
tailor care plans to specific clinical goals and help Veterans achieve 
their health care goals.
     Team-based health care--eHMP will provide an interoperable 
care plan in which clinical care team members, including the patient, 
will understand the goals of care and perform explicit tasks to execute 
the plan. eHMP will also monitor tasks that are not completed as 
specified and escalate them to the appropriate team.
     Quality-driven health care--eHMP will support the 
diffusion of best practices, including evidence-based clinical process 
standardization. eHMP will collect data on how clinicians address 
conditions and power analytics to generate new evidence for better care 
and best practices.
     Improved access to health information--eHMP will integrate 
health data from VA, DOD, and community care partners into a 
customizable interface that provides a holistic view of each Veteran's 
health records.

    Fundamentally, our efforts to improve information systems are about 
data, not software. Regardless of the software platform, we need to be 
able to access the right data at the right time. Health data 
interoperability with DOD and network providers is important--but it is 
equally important to understand that this is just one aspect of having 
a comprehensive profile to streamline and unify the Veteran experience.
    Using eHMP as a tool, health care teams will better understand 
Veterans' needs, coordinate care plans, and optimize care intensity in 
VA and throughout the high-performing network of care.
                         looking to the future
    Modernization is a process, not an end, and the release of VistA 4 
in FY 2018 will not be the ``end'' of VA's EHR modernization. VA has 
always intended to continue modernizing VA's EHR, beyond VistA 4, with 
more modern and flexible components.
    Technology and clinical capabilities must consistently evolve to 
meet the growing needs of our Veterans. The VistA Evolution program is 
just that--an evolving capability that is an invaluable part, but not 
the end of VA's EHR modernization.
Digital Health Platform
    Due to the expansion of care in the community, a rapidly growing 
number of women Veterans, and increased specialty care needs, the need 
for more agility in our EHR has never been greater. We are looking 
beyond what VistA 4 will deliver in FY 2018, and we are evaluating 
options for the creation of a Digital Health Platform to ensure that we 
have the best strategic approach to modernizing our EHR for the next 25 
years.
    The VA healthcare system must keep the Veteran experience at its 
core and incorporate effective clinical management, hospital operations 
capability, and predictive analytics. We do not have all of this today 
with VistA.
    To prepare for this new era in connected care, VA is looking beyond 
the EHR to a digital health platform that can better support Veterans 
throughout the health continuum. These factors drive the need for 
continuous innovation and press us to plan further into the future.
    The EHR is the central component of the digital health platform. 
However, an EHR by itself does not have all of the capabilities 
required to manage care in the community, respond to the changing needs 
of the Veteran population, support clinical management, and provide the 
best overall Veteran experience with the VA healthcare system.
    We have conducted a business case outlining our vision for the 
digital health platform. Our goal is to have a modern and integrated 
health care system that would incorporate best-in-class technologies 
and standards to give it the look, feel, and capabilities users have 
come to expect in the private sector.
    The digital health platform will be agile, and will leverage 
international open-source standards such as the Fast Healthcare 
Interoperability Resources (FHIR) framework. FHIR converts granular 
health data points into standardized data formats already well known to 
healthcare IT application developers. The main goal of FHIR is to 
simplify implementation without sacrificing information integrity. VA 
is working with standards organizations and industry partners to 
further refine FHIR to allow the level of interoperability necessary 
for the functionality described above.
    Health Level 7 International (HL7), a not-for-profit American 
National Standards Institute (ANSI)-certified standards developing 
organization, developed FHIR. HL7 has produced healthcare data exchange 
and information modeling standards since its founding in 1987. Emerging 
industry practices and lessons learned from previous standards 
frameworks informed HL7's development of FHIR.
    The digital health platform will be a system of systems. It is not 
dependent on any particular EHR, and VA can integrate new or existing 
resources into the system without sacrificing data interoperability. 
One of the digital health platform's defining features will be system-
wide cloud integration, a marked improvement over the more than 130 
instances of VistA that we have today.
                               scheduling
    We recognize the urgent need for improvement in VA's appointment 
scheduling system. We are evaluating the Veteran Appointment Request 
(VAR) application and the VistA Scheduling Enhancement (VSE) through 
simultaneous pilot programs. We are testing VAR at two facilities. We 
have been testing VSE at 10 locations, and are in the training phase 
for national deployment of VSE.
    VAR is a new Veteran facing capability allowing Veterans to 
directly request primary care and mental health appointments as face-
to-face, telephone, or video visits by specifying three desired 
appointment dates. The software allows established primary care 
patients to schedule and cancel primary care appointments directly with 
their already-assigned Patient Aligned Care Team provider.
    We are testing VAR at two facilities in the VA New England Health 
System (Veterans Integrated Service Network (VISN) 1)--the VA 
Connecticut Healthcare System (West Haven) and the VA Boston Healthcare 
System (Jamaica Plain).
    VSE updates the legacy command line scheduling application with a 
modern graphical user interface. This capability reduces the time it 
takes schedulers to enter new appointments, and makes it easier to see 
provider availability. VSE provides critical, near-term enhancements, 
including a graphical user interface, aggregated facility views, 
profile scheduling grids, single queues for appointment requests, and 
resource management reporting.
    Our ten VSE Initial Operational Capability sites are:

     1. Charles George VA Medical Center in Asheville, NC
     2. West Palm Beach VA Medical Center in West Palm Beach, F
     3. Chillicothe VA Medical Center in Chillicothe, OH
     4. VA Hudson Valley Health Care System in New York
     5. Louis Stokes Cleveland VA Medical Center in Cleveland, OH
     6. VA New York Harbor Health Care System in New York, NY
     7. VA Salt Lake City Health Care System in Utah
     8. VA Southern Arizona Health Care System in Tucson, AZ
     9. James H. Quillen VA Medical Center in Mountain Home, TN
    10. Washington, DC VA Medical Center in Washington, DC.

    VA schedulers tell us that they need a system focused purely on 
scheduling. VSE and VAR pilots are available now and show positive 
results in meeting the business requirements of our partners. In 
contrast, the Medical Appointment Scheduling System (MASS) project 
includes additional features that add complexity, leading us to put 
MASS on a strategic hold while our team ensures that we meet all 
requirements without undue processing difficulties. VA will carefully 
measure the results of the VSE pilot to determine the best use of 
resources that will meet Veteran needs. VA is working hard to ensure 
that every technological tool and improvement makes judicious use of 
taxpayer dollars while providing solutions that support today's 
Veterans' needs.
                   enterprise cybersecurity strategy
    OI&T is facing the ever-growing cyber threat head on--we are 
committed to protecting all Veteran information and VA data and 
limiting access to only those with the proper authority. This 
commitment requires us to think enterprise-wide about security 
holistically. We have dual responsibility to store and protect Veterans 
records, and our strategy addresses both privacy and security.
    In order to achieve and maintain the highest level of security, we 
need the active participation of everyone who accesses VA systems. We 
are providing comprehensive education to ensure that all VA employees 
remain vigilant. We have updated our National Rules of Behavior and our 
annual security training, and we are emphasizing continuous engagement 
with our employees. Information security poses constant challenges, and 
it is only through continuous reinforcement that our employees can 
support us in this battle.
    The first step in our transformation was addressing enterprise 
cyber security. We delivered an actionable, far-reaching, cybersecurity 
strategy and implementation plan for VA to Congress on September 28, 
2015, as promised. We designed our strategy to counter the spectrum of 
threat profiles through a multi-layered, in-depth defense model enabled 
through five strategic goals.

     Protecting Veteran Information and VA Data: We are 
strongly committed to protecting data. Our data security approach 
emphasizes in-depth defense, with multiple layers of protection around 
all Veteran and VA data.
     Defending VA's Cyberspace Ecosystem: Providing secure and 
resilient VA information systems technology, business applications, 
publically accessible platforms, and shared data networks is central to 
VA's ability to defend VA's cyberspace ecosystem. Addressing technology 
needs and operations that require protection, rapid response protocols, 
and efficient restoration techniques is core to effective defense.
     Protecting VA Infrastructure and Assets: Protecting VA 
infrastructure requires going beyond the VA-owned and VA-operated 
technology and systems within VA facilities to include the boundary 
environments that provide potential access and entry into VA by cyber 
adversaries.
     Enabling Effective Operations: Operating effectively 
within the cyber sphere requires improving governance and 
organizational alignment at enterprise, operational, and tactical 
levels (points of service interactions). This requires VA to integrate 
its cyberspace and security capabilities and outcomes within larger 
governance, business operation, and technology architecture frameworks.
     Recruiting and Retaining a Talented Cybersecurity 
Workforce: Strong cybersecurity requires building a workforce with 
talent in cybersecurity disciplines to implement and maintain the right 
processes, procedures, and tools.

    VA's Enterprise Cybersecurity Strategy is a major step forward in 
VA's commitment to safeguarding Veteran information and VA data within 
a complex environment. The strategy establishes an ambitious yet 
carefully crafted approach to cybersecurity and privacy protections 
that enable VA to execute its mission of providing quality health care, 
benefits, and services to Veterans, while delivering on our promise to 
keep Veteran information and VA data safe and secure.
    In addition, we have a large legacy issue that we need to address. 
In the FY 2017 budget request, VA has increased requested spending on 
security to $370 million, fully funding and fully resourcing our 
security capability for the first time. We are committed to eliminating 
our material weakness in FY 2017, and these funds are enabling those 
efforts. In addition, VA is investing over $50 million to create a 
data-management backbone.
   it transformation and enterprise program management office (epmo)
    OI&T is transforming. Persistent internal challenges exist in 
delivering IT services, and external pressures have compelled us to 
change and adapt. Through the MyVA initiative, VA is modernizing its 
culture, processes, and capabilities to put Veterans first, and is 
giving our team the opportunity to make a real difference in Veterans' 
lives. This momentum is driving us to transform OI&T on behalf of our 
partners, our employees, and Veterans.
    EPMO is building our momentum in OI&T's transformation. EPMO hosts 
our biggest IT programs, including the Veterans Health Information 
Systems and Technology Architecture (VistA) Evolution, 
Interoperability, the Veterans Benefits Management System, and Medical 
Appointment Scheduling System (MASS). EPMO also supports the Federal 
Information Technology Acquisition Reform Act (FITARA) requirements.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                   Fig. 1--EPMO Organizational Chart

    EPMO ensures alignment of program portfolios to strategic 
objectives and provides visibility and governance into the programs.
    For enterprise initiatives, EPMO helps program and project teams to 
better develop execution plans, monitor progress, and report the status 
of these programs and projects. EPMO enables partnerships with IT 
architects for enterprise collaboration and serves as a program/project 
resource for the delivery of enterprise and cross-functional programs. 
This helps identify Shared Services Enterprise Programs and will help 
plan resource requirements with portfolios and architecture.
    EPMO has already produced results. The Veteran-focused Integration 
Process (VIP) is a project-level based process that replaces the 
Program Management Accountability System (PMAS). VIP streamlines IT 
product release activities and increases the speed of delivering high-
quality, secure capabilities to Veterans. VIP is revolutionary because 
it utilizes a single release process--designed to eliminate redundancy 
in review, approval, and communications--that will be fully implemented 
by the end of 2016. These releases are scheduled on a three-month 
cadence--an improvement over the previous six-month standard--and allow 
greatly needed IT services to be delivered to Veterans more frequently.
    VIP reduces overhead and is more efficient and cost effective than 
PMAS. VIP's efficiencies include reducing the review process from 10 
independent groups with 90 people to a single group of 30 people 
focused on ensuring that products meet specified, consistent criteria 
for release.
    VIP focuses on doing rather than documenting, with a reduction of 
artifacts from more than 50 to just seven, plus the Authority to 
Operate, and the shift from a six-month to a three-month delivery 
cycle. Further, as a guarantee to our work, EPMO will ensure that 
product teams stay assigned to their projects for at least 90 days 
after the final deployment.
                               conclusion
    VA is at a historic crossroad and will need to make bold reforms 
that will shape how we deliver IT services and health care in the 
future, as well as improve the experiences of Veterans, community 
providers, and VA staff. Throughout this transformation, our number one 
priority has and will always be the Veteran--ensuring a safe and secure 
environment for their information and improving their experience is our 
goal.
    As with all issues, VA strongly values the input and support of all 
its stakeholders. We realize the vital role they play in assisting us 
in providing timely, high-quality care to Veterans, and we look forward 
to continued open dialog.

    This concludes my testimony, and I am happy to answer your 
questions.

    Chairman Isakson. Thank you, Dr. Shulkin.
    Ms. Melvin.

STATEMENT OF VALERIE MELVIN, DIRECTOR OF INFORMATION MANAGEMENT 
AND TECHNOLOGY RESOURCES ISSUES, U.S. GOVERNMENT ACCOUNTABILITY 
                             OFFICE

    Ms. Melvin. Good afternoon, Chairman Isakson, Ranking 
Member Blumenthal, and Members of the Committee. Thank you for 
inviting me to testify at today's hearing.
    As we all know, the use of information technology is 
critically important to VA's ability to serve veterans, and 
each year, the Department spends billions of dollars on 
information systems and related assets. However, challenges in 
the Department's management of IT over many years have led to a 
number of failed initiatives and contributed to our designating 
VA health care as high-risk.
    At your request, my testimony today summarizes our 
reporting on IT concerns that helped lead to the high-risk 
designation. It also addresses some of our more recent findings 
about the Department's management of IT as reflected in various 
initiatives. These include, as you have mentioned, its exchange 
of health records with DOD, also the development and use of the 
Veterans Benefits Management System, VBMS, and the 
modernization of the Department's health care claims processing 
system.
    Between 2010 and 2014, our work highlighted several 
critical deficiencies in VA's delivery of its IT projects. 
These related to the unsuccessful modernization of its 
approximately 30-year-old outpatient scheduling system after 
spending an estimated $127 million over 9 years, the suspended 
development of a system that was to electronically store and 
retrieve information about surgical implants, and almost two 
decades of effort toward achieving fully interoperable 
electronic health records with DOD that remains ongoing.
    Across these efforts, we noted persistent weaknesses in the 
Department's IT management practices. Among others, we noted 
shortcomings in investment oversight, requirements and risk 
management, and system testing. We also noted weaknesses in the 
establishment of goals and measures that are critical to 
assessing the progress and results of IT projects.
    The Department agreed with many of the related 
recommendations that we made in these areas and noted various 
steps that it would take to address them. Nevertheless, we have 
continued to identify management weaknesses which present risk 
to delivering IT capabilities that effectively support VA's 
mission.
    For example, while it made progress with implementing an 
initial version of VBMS, we recently noted the need for 
increased management attention to establishing goals for the 
system's response times and user satisfaction. In addition, 
last month, we reported that while the Department had 
implemented interim measures to address some of the challenges 
with modernizing its health claims processing system, it lacked 
a sound plan for the modernization effort.
    Further, our recent reporting on VA's efforts to advance 
electronic health record interoperability with DOD noted that 
VA had not identified outcome-oriented goals and metrics to 
clearly define what it aims to achieve in its efforts with DOD 
and the value and benefits of these efforts for veterans and 
health care providers.
    Overall, these findings continue to highlight the need for 
more effective IT management to better position VA to deliver 
the modernized systems and capabilities necessary to fulfill 
its mission. And while we recognize that the Chief Information 
Officer, CIO, has undertaken a transformation effort to 
mitigate weaknesses, sustained management attention and 
organizational commitment cannot be stressed enough to ensure 
that this transformation is successful and that the weaknesses 
are fully addressed. Your continued Congressional attention 
also will be essential to help ensure that VA meets its 
challenge to establish a more rigorous and institutionalized 
approach to managing and delivering its IT.
    This concludes my oral statement and I would be pleased to 
respond to your questions.
    [The prepared statement of Ms. Melvin follows:]
    Prepared Statement of Valerie C. Melvin, Director, Information 
           Technology, U.S. Government Accountability Office

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman Isakson. Thank you, Ms. Melvin.
    Let me start with you if I can. Yesterday when I left this 
meeting, or another hearing we had in anticipation of this 
meeting today, a reporter from a technology publication whose 
name I cannot remember now stopped me in the hall and asked me 
if I would answer a couple of questions. One of the questions 
asked was, was I aware of any bad purchases of equipment or 
software that the VA had made in terms of technology.
    My answer to them was, you know, I made a lot of dumb 
mistakes when I ran my company and we went through the IT 
revolution, and I was sold some stuff that ended up not doing 
what it needed to do. To the extent that you have looked at the 
VA, do they have a good process of evaluating their needs and 
purchasing their equipment in terms of technology equipment?
    Ms. Melvin. I think over the years that we have looked at 
VA's IT, they have had processes in place to assess and 
evaluate their information technology needs. What we found, 
though, were gaps in terms of their ability to really 
collaborate with the business side and know fully what those 
needs are and then to carry them through to fruition in terms 
of development.
    We have identified concerns through the course of our work 
relative to the current practices, if you will, or the lack of 
practices within the IT shop for making sure that they have the 
right--a sound investment process and the ability to carry 
through and deliver on the investments that they undertake.
    Chairman Isakson. I think you just hit on something I 
experienced in my business. A lot of times, I have bought 
technology equipment and IT equipment that my people really did 
not want, or if they got it, they did not know how to use it, 
and I suffered from a lot of not getting the people who were 
going to use the equipment to be a part of the decision in 
which equipment to buy. Do you know whether or not VA has a 
process to involve the rank and file employees with the 
decisions it has made in terms of equipment or a technology or 
software they buy?
    Ms. Melvin. From what we understand, through the 
transformation initiative that the CIO is undertaking, there 
are steps now being put in place to have a more rigorous 
process of collaborating with the business side. I would say 
that over the course of the work that we have done in the past, 
that has been an area of concern, especially when it came to 
requirements, defining requirements and really knowing what 
needed to be in place and to carry through to get those systems 
developed.
    Chairman Isakson. Thank you very much, Ms. Melvin.
    Ms. Council, I told you when we had our little meeting 
before this meeting that the Georgia Institute of Technology, 
which is an institution in my State that I could not get into, 
but a lot of smart people that are engineers go to, wrote me a 
letter about how impressed they were with your work with them 
on the interoperability program called Fast Healthcare 
Interoperability Resource (FHIR) that they are developing at 
Georgia Tech. I understand you all are close to an agreement on 
that. Is that correct?
    Ms. Council. Yes, sir, in support of our new digital health 
platform. One of the things that we wanted to provide was a 
proof of concept that our business partners could actually 
take, use, and understand what this platform really is about 
and what is the problems it can solve.
    Chairman Isakson. And the main thing that software does is 
interpret between softwares that do not talk to each other 
otherwise, is that not correct?
    Ms. Council. Yes, and it actually allows for greater 
innovation in area health care. So, what it is is FHIR is the 
Fast Health Interoperable Resource. You can bring that resource 
in an open source environment, use it, try it out, and if it 
does not work, you spin it back out. So it is all leveraging 
software as a service.
    Chairman Isakson. Well, in my humble opinion, 
interoperability of medical IT is the single biggest problem in 
health care today----
    Ms. Council. Mm-hmm.
    Chairman Isakson [continuing]. As a 71-year-old male that 
goes to the doctor quite frequently. [Laughter.]
    Whether on Epic or Greenway or whatever it might be, all 
these red flags go up if you get in one that it is on the 
other. So, I think what you are doing is on the leading edge of 
what the entire medical IT industry is going to do, am I 
correct?
    Ms. Council. Yes. Actually, the digital health platform has 
been said to be on the bleeding edge but the cutting edge in 
leveraging software as a service, the cloud, and also engaging 
in a non-infrastructure-based concept so that we can be much 
more agile, much more future ready, and only one instance at 
all times available to our friends in VHA.
    Chairman Isakson. Dr. Shulkin, in your testimony, and I did 
not write it down so I am going on quick memory here, but you 
rattled off a number of areas where you had reduced the 
infection rate and a number of problems that had plagued the VA 
and referred to your best practices evaluation of urinary 
tracts, colonostomies, things of that nature. Do you have a 
discipline system you go through now to make sure you are 
avoiding errors to the maximum extent possible and reinfection 
rates in your hospitals?
    Dr. Shulkin. Yeah. Mr. Chairman, I think VA has for some 
time been a leader in the country in patient safety and in 
systems to measure and evaluate outcomes. And, so, we have a 
very, very robust system, but the credit for this really needs 
to go to our clinicians, who have understood the importance of 
infection reduction, the importance of patient safety and 
quality. These types of improvements, the numbers that I 
rattled off, are really extraordinary advances in quality.
    Chairman Isakson. The reason I brought it up, and my time 
is going to be up, so I am not going to ask another question, 
but in Georgia, at Augusta VA about 5 years ago, we had two 
deaths and a number of infections from improper sterilization 
of colonostomy equipment that they finally corrected by putting 
in some new best practices in that hospital. I hope you are 
doing that throughout the system to make sure we minimize 
compounding problems by getting people that are already sick 
coming in our facilities and leaving sicker.
    Dr. Shulkin. Well, one of the reasons why we are on the GAO 
High-Risk List and one of the reasons why this is one of my top 
priorities is that in many VAs, we are doing world class care, 
but not all VAs. So, we are trying to ensure those best 
practices are consistent across the enterprise, which is one of 
our major areas of focus right now, implementing these as an 
integrated system, not as individual VAs.
    Chairman Isakson. Thank you for your testimony.
    Senator Blumenthal.
    Senator Blumenthal. Thanks, Mr. Chairman.
    I would like to ask about the impact of lack of cooperation 
between the Department of Defense and the VA. As I mentioned in 
my opening statement, we have been assured repeatedly that both 
agencies are cooperating with each other, which somehow defies 
credibility, because if that is so, there would have been 
interoperability or the issues would have been solved long ago. 
So, let me ask you, Ms. Melvin, who bears the responsibility 
here and what is happening?
    Ms. Melvin. I place the responsibility on both Departments 
and primarily on the leadership of those Departments in terms 
of being able to establish up front what it is that the 
Departments want to achieve in the way of interoperability.
    A longstanding concern that we have had with 
interoperability is in terms of defining what interoperability 
is supposed to be. We have not been able, over the years, to 
really get from either agency what they mean in terms of full 
interoperability, what that end state is supposed to be in the 
way of the technology that exists, and how that technology is 
used.
    So, as we have looked at this over the years, we have had a 
lot of discussions with both VA and with DOD. We have had a lot 
of assurances along the way that that was being taken care of. 
But what we consistently see is a lack of--really, a lack of 
clear planning and the clear definition of what it is and then 
how they plan to implement measures and goals to get there.
    Senator Blumenthal. What can--what would you recommend that 
we do on this Committee, and the U.S. Senate generally, to make 
sure that there is interoperability?
    Ms. Melvin. I think in the immediate--right now, I would 
say that there are a lot of--we have made a lot of 
recommendations to both VA and DOD. We are still following up 
to see where they are in the process of addressing those. But 
we also know that they are in the midst of a number of changes 
to the approach that they are taking.
    We have had a lot of concerns and questions relative to the 
fact that both Departments are essentially going down separate 
tracks with their modernization efforts, for the Department of 
Veterans Affairs and the AHLTA (Armed Forces Health 
Longitudinal Technology Application) system within DOD. We know 
that they intend to have interoperability.
    I think from the standpoint of your role at this point is 
continued oversight, continued pressing for answers and 
explicit discussion and details relative to what the plans are, 
how interoperability is to be defined at its fullest, and how 
the agencies intend to progress and measure their progress 
toward getting there.
    Senator Blumenthal. Ms. Council, my information is--well, 
actually, it is the VA's monthly information security report 
for April 2016--about 2,556 veterans were affected by incidents 
of data breach. That number is about six times the number 
reported by the VA 1 year before that, in March 2015. What 
accounts for the increase?
    Ms. Council. I would have to look at the data that you 
have. What I do know is that about 24 percent of any of the 
mishandlings that we have are mismailings, which is data--the 
letters that have gone out in the wrong envelope to a veteran 
who should not have received. So, 41 percent of those are 
mishandling or mismailing. The other parts of the situation 
around, umm, things that we look at like privacy violations, 
policy violations, unencrypted devices, those are where we 
really take a very, very diligent look and ensure that we are 
tightening up that kind of access to any of the veterans' 
information.
    So, to date, for fiscal year 2016, that is what we are 
basically seeing, which is actually about 20 percent lower than 
it was the year before.
    Senator Blumenthal. What is 20 percent lower?
    Ms. Council. The number of mismailings and misappropriation 
and mishandling of veteran----
    Senator Blumenthal. Well, we are not really talking about 
mismailings. We are talking about data breaches.
    Ms. Council. The actual number----
    Senator Blumenthal. I understand that a mismailing can 
cause a data breach----
    Ms. Council. It is considered a data breach, yes, sir.
    Senator Blumenthal. If something is sent to the wrong 
address, how can that happen? Do you not--how can you send a 
letter to the wrong address?
    Ms. Council. That is actually a process within the 
business. It is not an IT process. But, because I am the CIO, I 
am responsible for all data, and any data that is misused and 
mismanaged or moved to the wrong place, and also having 
responsibility for privacy, it falls with us. But, it is not--
--
    Senator Blumenthal. No, I understand that, but here is my 
question. You have got records.
    Ms. Council. Mm-hmm.
    Senator Blumenthal. You do mailings and communications to 
veterans over a period of years. It is not like somebody sits 
down for that letter and scribbles out something. It comes from 
a system that has been mailing consistently. How does it all of 
a sudden get the address wrong?
    Ms. Council. Generally, the system is not doing the 
mailing. There is a manual interface with a human error. There 
is a human interface--there is a human----
    Senator Blumenthal. So, you are saying that somebody is 
sitting there and actually typing out an address on an 
envelope?
    Ms. Council. I am saying that envelopes come together and 
the paper is put into an envelope by a human being and sent 
away, yes. It is not mechanized.
    Senator Blumenthal. This sounds like very low-tech----
    Ms. Council. Very low-tech.
    Senator Blumenthal. Eminently addressable and correctable.
    Ms. Council. Yes, sir.
    Senator Blumenthal. What is being done?
    Ms. Council. One of the things that we are looking at with 
the VBMS and working with them, and I will refer to Mr. Burke 
on this, is changing that process, because right now, when it 
occurs, it is not something that IT itself created, but we feel 
real responsible to correct it.
    Senator Blumenthal. Well, these kinds of data breaches, and 
if they are rising sixfold over just a year, really have to be 
addressed right away. And, we are not talking here about some 
sophisticated hacking operation.
    Ms. Council. Mm-hmm. No.
    Senator Blumenthal. But it is equally dangerous and 
damaging to privacy.
    My time has expired, so thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Blumenthal.
    Senator Rounds.

        HON. MIKE ROUNDS, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Rounds. Thank you. It sounds like they need a 
window envelope. [Laughter.]
    Dr. Shulkin, in my homestate of South Dakota, we have a 
large number of veterans who rely on the VA's care in the 
community programs. As you are aware, health records 
interoperability is very important in making these programs 
succeed. A lot of the problems with providers not being paid on 
time in my State stem from difficulties transferring records 
back and forth between the VA and the providers.
    I am glad that in March VA changed the rules to allow 
providers to be paid before receiving the records back, and 
that has most certainly helped. It seems to me, though, that 
moving forward, some type of commercial health record would be 
a good solution. I understand that in its draft report, the 
Commission on Care recommends that the VA purchase and deploy 
an off-the-shelf electronic health record. I also understand 
you have various proposals on the future of VA health records 
currently before you and that you are making those 
considerations now.
    Can you tell me a little bit about where you are at or 
where you stand on the issue and where you see the VHA going in 
the future to better interact with private sector providers?
    Dr. Shulkin. Yes. Yes. I would just say three quick points. 
Number 1 is that the health information exchanges that you 
talked about, the electronic exchange of information with the 
community and VA, is the way we need to go. We currently have 
an HIE, a Health Information Exchange, working with 721 
hospitals, 10,000 clinics, and thousands of providers, but that 
is, as you know, a minority of the providers.
    Senator Rounds. Is that a proprietary system or is that an 
off-the-shelf?
    Dr. Shulkin. That is an off-the-shelf system, yes. So, we 
are encouraging more providers that do a lot of business with 
the VA to join this effort through our HIE.
    Second, as you said, we are not paying our providers fast 
enough, but we did suspend the fact that they have to give us 
their information before they get paid. So, we are working hard 
to pay our providers within 30 days, and that is a commitment 
that we have, to get better at that.
    Third on the commercial systems and where we are going with 
the future recommendations, this is something that LaVerne's 
shop has been taking the lead on, and Ms. Council, as the CIO, 
has the lead on this, but she has been very collaborative with 
us as the customer and we have come to a point that we have 
reached consensus that very much agrees with where the 
Commission on Care is on this, which is that looking at a 
commercial product is probably the way to go, but we need to do 
this in a way that incorporates our ability to integrate with 
community providers in all of the unique needs of veterans. So, 
that is what Ms. Council is referring to when she talks about 
the digital health platform that actually takes those 
recommendations but does something that I think will really be 
the way that VA needs to go in the future.
    Senator Rounds. Ms. Council, I know that one of Secretary 
McDonald's breakthrough priorities for 2016 is to transform the 
VA Office of Information Technology, and the stated goal is to 
ensure 50 percent of IT projects are on time and on budget. 
Halfway through the year, do you feel that you are on pace to 
meet that target? And I also note that one of Secretary 
McDonald's stated goals for 2016 is to close 100 percent of 
current cybersecurity weaknesses. Where do you currently stand 
in that effort?
    Ms. Council. So, we are on point to do exactly what the 
Secretary has laid out. Our plan is that we will have addressed 
all Federal Information Security Modernization Act (FISMA) 
findings. By the end of 2016, we would have closed about 30 
percent of what the IG expects us to close. And then by the end 
of 2017, 100 percent eliminating the things that were 
identified in 2015 as material weaknesses.
    As far as the on-time 50 percent, we have deployed our new 
Enterprise Portfolio Management Office, or EPMO. The EPMO 
actually is giving us a reduction in overhead of 80 percent on 
the work that we do, which means we should be able to do our 
work 50 percent faster. We will be fully using agile processes, 
so you will have access to your solution much quicker than what 
was happening before, and so the 50 percent should be totally 
doable and we are on track.
    Senator Rounds. Current cybersecurity weaknesses, you 
expect that you will meet that goal?
    Ms. Council. We are. The material weakness that we have 
been identified as in the 2015 audit process, we are scheduled 
and have planning and on schedule to meet and close those out 
at the end of 2017 in totality.
    Senator Rounds. I recently read that the VA has spent more 
than $1 billion developing and maintaining the Veterans 
Benefits Management System, the VBMS, since 2009. I note that 
the VA requested an additional $290 million for VBMS in fiscal 
year 2017, all for a system that was initially projected to 
cost $579 million. Can you tell me where you are, currently 
stand with the VBMS, and where you see the costs heading with 
this system.
    Ms. Council. Mr. Burke and I spoke about this. I am going 
to refer the question over to him, because the team, working 
with the leadership, is making a pivot and really looking at 
tying in to VBA and modernizing the VBMS effort.
    Mr. Burke. Thank you, sir. The development cost of the 
initial e-folder for VBMS was approximately $560 million, but 
six different scope changes approved by Congress to create a 
processing solution that better served VA employees led to an 
increased expenditure.
    By the end of fiscal year 2016, VA will have spent $1.3 
billion to create, implement, and maintain VBMS. It is 
important to note that this investment has been central in 
reducing the claims backlog by more than 88 percent, from a 
high point of 611,000 to a little less than 75,000. During that 
time, VBA also achieved an accuracy rate of 96 percent at the 
medical level issue, lowered the claims inventory by 59 
percent, and the days pending for each claim from a peak of 282 
days to 91 days. VBMS is also in the process, in accordance 
with one of the GAO recommendations, of providing a plan that 
would take us into a next generation phase.
    We have benefited from the agile environment in VBMS, which 
really gets to one of the points that was raised earlier. Our 
end users, we have a process in place where the end users get 
their product faster. They have input into the development of 
the product. So, while the expenditure does bring us to $1.3 
billion by the end of this year, I think we have been able to 
show some of the benefits from the amazing support we have 
received.
    Senator Rounds. Thank you.
    My time has expired. Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Rounds.
    Senator Hirono.

         HON. MAZIE K. HIRONO, U.S. SENATOR FROM HAWAII

    Senator Hirono. Thank you, Mr. Chairman.
    The modernization and the interoperability of medical 
records, et cetera, it has been such an ongoing challenge. I 
realize that VA's health care system is huge, so there are a 
lot of moving parts and all that, but we continue to ask what 
happens to the money and where are the results and all that and 
you generally come in and tell us that things are going well or 
much better. But, it is pretty much an ongoing conversation 
that we have on the same issues.
    I note that in Ms. Melvin's testimony, on page seven of her 
testimony, she says that the GAO recommended that the 
Department take six actions to improve key systems development 
and acquisition processes essential to another effort to deal 
with the outpatient scheduling system. The Department generally 
concurred with our recommendations, but as of May 2016, which 
was not very long ago, had not addressed four of the six 
recommendations.
    So, this is a question for you, Dr. Shulkin. Why not, and 
do you have plans to address the remaining--well, the majority 
of the GAO recommendations? Do you know what I am referring to? 
It does not----
    Dr. Shulkin. No.
    Senator Hirono [continuing]. Cite what the recommended 
actions are----
    Dr. Shulkin. Are you referring to the GAO High-Risk List--
--
    Senator Hirono. Yes.
    Dr. Shulkin [continuing]. Or are you referring to IT 
recommendations from the GAO?
    Senator Hirono. Apparently, it is in the--it is a section 
of your testimony, Ms. Melvin, that has to do with the High-
Risk List. Maybe you can enlighten us a little bit more as to 
what those recommendations were and the fact that the 
administration has not met four of them.
    Ms. Melvin. I would just like to clarify. Were you talking 
about the scheduling system we----
    Senator Hirono. Yes.
    Ms. Melvin. OK.
    Senator Hirono. Outpatient scheduling.
    Ms. Melvin. The outpatient scheduling----
    Senator Hirono. That is just one, but let us focus on that.
    Ms. Melvin. Yes. That is one in which we had six 
recommendations that related to the acquisition management, 
systems testing, progress reporting for that initiative, and so 
we at this point are noting, I believe, that we have closed one 
recommendation as implemented, one as not implemented, and four 
remain open that relate to implementing requirements management 
plan for the development and management of the system, 
analyzing requirements, that type of thing. And we have also 
got recommendations that relate to policies and procedures for 
establishing meaningful oversight in terms of having a robust 
collection method for information on project costs, benefits, 
and schedules. So, those remain open at this point.
    Ms. Council. So, we have actually----
    Senator Hirono. I asked the wrong person, then.
    Ms. Council. No, no problem. The enterprise portfolio 
management process is actually creating a control tower. We 
stood this process up in February. We went and got approval 
from the unions in April. And, in fact, my Deputy Assistant 
Secretary for that effort is behind me here. We have stood up 
that effort, which actually provides us with a new intake 
process, replacing our Project Management Accountability 
Software (PMAS) process with a better and focused integration 
process which will allow us to understand benefits, ensure that 
the security is built in at the beginning of the process. It is 
an agile process. And it also gives us a warranty period on the 
back end of the process. So, it addresses all of those issues 
in those recommendations, as well as improves our ability to 
deliver and improves the quality of what we deliver.
    Senator Hirono. So, Ms. Melvin, now that you have heard the 
response, you would maybe change your testimony to reflect that 
they are meeting your recommendations?
    Ms. Melvin. What I would say is that we are cautiously 
optimistic. We would like to see more of the evidence. We will 
be talking more with the CIO's shop to understand more fully 
what they are doing. It is encouraging in terms of overall, 
what is being said, but I would reserve judgment until we have 
had a chance to really evaluate more. We do like hearing them 
say they are on the track that they are on, though, toward 
addressing these matters.
    Senator Hirono. Did you want to add something?
    Ms. Council. Yeah. And just to clarify, what Ms. Melvin 
said on her timing was 2010 to 2014. We came in with these 
changes in mid-2015 and we have not had a review of the 2015 to 
now, and so that is one of the reasons that, you know, it is 
sort of not linking, because she was well before any of these 
new changes have been made.
    Senator Hirono. Because the VA is such a huge system, I 
personally look to the GAO to point out areas where improvement 
needs to occur, and I think it is really important for the 
administration, VA, to respond in an appropriate way to address 
the concerns.
    Since the Secretary is very focused on a veteran-focused 
agency, how are you making sure that the veterans in our 
various communities, many of who live in rural areas and they 
may not have access to the computer, how do you--your efforts 
to communicate changes, requirements, the Choice program and 
all that, what kind of feedback are you getting from the 
veterans as to, well, it provided--assuming they even know that 
they should ask? I am very concerned about the information that 
our veterans are getting regarding what you all are doing and 
whether you are responding to those concerns. And, I am running 
out of time, but maybe you can respond really briefly with a 
commitment to improve.
    Dr. Shulkin. Well, I think it is more than a commitment. I 
think, as you said, the Secretary has made it clear that our 
customer is the veteran and we need to change our systems to be 
veteran-centric. And in order to do that, you have to ask your 
customers in the way that you are describing, Senator. We have 
multiple, multiple surveys. We have created groups. We rely 
upon our Veterans Service Organizations. We rely upon you. You 
give us a lot of feedback from your constituents. And, we are 
answering our e-mails directly. We are out there talking to 
veteran groups. Several of you have asked me to join you at 
meetings where we have met with veterans.
    So, I think that we are getting--we always need to do a 
better job at getting feedback, but there is that commitment 
that currently exists.
    Senator Hirono. Well, I may want to just talk with you on 
the side regarding a particular need that is happening in one 
of the islands that has veterans, so we will talk with you. 
Thank you.
    Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Hirono.
    Senator Boozman.

         HON. JOHN BOOZMAN, U.S. SENATOR FROM ARKANSAS

    Senator Boozman. Thank you, Mr. Chairman, and again, thank 
you for the hearing.
    Dr. Shulkin, we have talked a little bit about some of the 
problems in the VA pharmacy, and I know you are working hard to 
try and correct some of those. An example would be that VA 
pharmacies are not networked and when a veteran visits multiple 
providers or moves their home to a new location, or even goes 
on a trip away from their primary care manager, the veteran has 
to start over with a new doctor's appointment and obtain an 
entirely new prescription to fill an existing prescription. 
There also is not deconfliction or adequate monitoring of drug-
to-drug interactions or prescription duplications.
    Can you talk a little bit about what you are trying to do 
in the VA pharmacy to alleviate, really, some pretty basic 
problems?
    Dr. Shulkin. Right. I think, Senator, you have identified 
the problems that we know exist in the VA very, very well. We 
have created a technology solution called OneVA Pharmacy that 
we are implementing across the system that really addresses 
almost everything that you have talked about. This should be 
just like other network pharmacies, that when you walk in, all 
that information is available and we can service people. That 
is our commitment. The IT solution is being implemented.
    And I do not know, do you have a specific date for the 
implementation of OneVA Pharmacy? Here is the date. In December 
of this year, it will be completely up to be able to support 
that.
    Senator Boozman. Good. No, that is great. We hear a lot 
about, rightfully so, about opioids and stuff, so an integrated 
system theoretically probably would help with that, also, so 
that is good.
    Ms. Melvin, you highlighted in your testimony that the VA 
currently has two systems that are over 50 years old. The 
Personnel Accounting Integrated Data System, which automates 
time and attendance for employees, is 53 years old. The 
Benefits Delivery Network that tracks claims by veterans for 
benefits eligibility, dates of death, is 51 years old. Both use 
programming language developed in the 1950s. I think you also 
said that of 12 agencies or whatever, these are in the top ten 
oldest government----
    Ms. Melvin. Yes, they are. Yes.
    Senator Boozman. Can you talk a little bit about the 
importance of these? I guess, talk a little bit how we get 
ourselves in this situation where we have got two things that 
are fairly critical, and yet, again, go back to the 1950s.
    Ms. Melvin. I think it is important to emphasize that there 
always has to be continual monitoring and updating of systems. 
There always has to be a focus on whether those--when those 
systems reach a point at which it is time to retire them, if 
you will, or get new ones to replace them in whatever form or 
fashion. And what we have found over time is that there has 
been a lot of focus on maintaining and operating older systems. 
It really comes down to the prioritization in many instances of 
whether those systems are being given the priority, being 
looked at in the way that they should be for determining when 
they should be retired.
    So, across the work that we have done, where we have had an 
opportunity to look at those systems, our concerns that we 
raised there were with the need to really start focusing on 
bringing them current, reshifting the emphasis, if you will, to 
putting focus on the development of newer technology, and 
understand--or taking a position or having a plan for how to 
transition them from the operational state that they are in.
    Senator Boozman. So, that is not really newer technology, 
though. I mean, it is kind of going from the old to the modern 
era. I mean, it is beyond that, almost.
    Ms. Melvin. Yes. It could be new technology, but it is also 
looking at what you have got in place, thinking ahead at all 
times, and really being cognizant of what you need to do 
relative to supporting your mission on a broader encompassing 
basis. And what we found is that oftentimes, the focus gets on 
just maintaining what is there without really having the vision 
or the forward thinking view of what needs to be done to really 
bring this into a more modernized capability as the 
environments change and needs change.
    Senator Boozman. Ms. Council, can you give us kind of a--or 
whoever--give us a path forward----
    Ms. Council. Sure.
    Senator Boozman [continuing]. On how we are going to fix 
that, and then also maybe a detailed timeline as to when we are 
going to get it accomplished.
    Ms. Council. Sure. Senator Boozman, what you are really 
referring to is what is referred to as the software development 
life cycle. Every bit of software, every system has a life. 
Forty, 50 years is ancient in the world of IT, and 
fundamentally, I cringe when I think about that, because at the 
end of the day, you are working with something that very few 
people can even tell you what it actually does and does well.
    Generally, what should happen is--and what we plan to do--
is our Chief Technical Officer would own that as a life cycle 
and look at every bit of applications we have, every bit of 
software we have, and really define the legacy and what we 
should be taking out of the environment. Everything that runs 
does not necessarily means it needs to still be there, and you 
need to eliminate those systems, take them down, which means 
you end the life. You also need to plan well in advance those 
systems that you are going to replace and think about 
technology in a very different way, moving away from a hardware 
mentality to one where you are really focused on the right 
software linked with the right processes.
    So, as we try to be more efficient, ensure that we do not 
have some of the issues we mentioned, like earlier with the 
mismailings, those kinds of things, we change our processes. 
Therefore, we change our systems. So, our plan is that we would 
have an SDLC, a software development life cycle, that will 
clearly let everyone know what is going to startup, what is 
going to be put end of life, and where we are going with our 
architecture. That is a mainstay of a good organization in IT 
and it is something that we are deploying in our environment, 
as well.
    Senator Boozman. Thank you, Mr. Chair.
    Chairman Isakson. Thank you, Senator Boozman.
    Senator Tester.

           HON. JON TESTER, U.S. SENATOR FROM MONTANA

    Senator Tester. Thank you, Mr. Chairman.
    I want to thank you all for being here today. Dr. Shulkin, 
you came from Johnson and Johnson (J&J), right?
    Dr. Shulkin. No.
    Senator Tester. You came from Johnson and Johnson? You came 
from----
    Dr. Shulkin. I was running private hospitals in----
    Senator Tester. OK. I just got you mixed up.
    Ms. Council. That happens.
    Senator Tester. All right. So, how long--you have been at 
the VA for how long, Dr. Shulkin?
    Dr. Shulkin. July 6, a year.
    Senator Tester. It will be 1 year come July 6?
    Dr. Shulkin. It will be 1 year.
    Senator Tester. And how about you, Ms. Council?
    Ms. Council. July 6, 1 year.
    Dr. Shulkin. We are a package team. [Laughter.]
    Senator Tester. Well, that is good. So, you guys kind of 
came from the private sector.
    Dr. Shulkin. We both did.
    Senator Tester. Yeah. And, so, does the private sector have 
these kind of problems with IT? I mean, I came out of the State 
legislature. We had a program we spent hundreds of millions of 
dollars on. I get here. It does not matter if it is the VA or 
any other agency within government. It is like these guys have 
got a bag and it is Halloween and they are filling it up full 
of money and taking it out the door and we are not getting much 
for it. Is this the same thing that happens in the private 
sector?
    Dr. Shulkin. It is, only bigger, yes.
    Senator Tester. It is worse?
    Dr. Shulkin. No. We have a bigger problem because our 
numbers are bigger. But, these same--you know, when you 
implement IT, it is not a magical solution. You actually have 
to know what you want the IT to do.
    Senator Tester. Yeah.
    Dr. Shulkin. And you have to use your workflow processes to 
improve it.
    Senator Tester. Yeah.
    Dr. Shulkin. So, we are experiencing the same problem that 
happens all throughout health care, and----
    Senator Tester. Yeah, but you guys are all smart people. I 
mean, you have set up--do you not set up your goals and your 
plans and then you contract with somebody who is a smart person 
and knows IT, right----
    Dr. Shulkin. Yeah.
    Senator Tester [continuing]. And they come in and they 
develop it. Are these contracts open-ended that every time you 
make a change, it is another hundred-million bucks?
    Dr. Shulkin. Senator Tester, I will tell you, I truly 
believe this is a new VA. I think, as Senator Boozman said, 
some of these problems date back----
    Senator Tester. No, no----
    Dr. Shulkin [continuing]. Years and years----
    Senator Tester. No doubt about it, but----
    Dr. Shulkin [continuing]. And I am watching--I am watching 
business being done differently. The processes that LaVerne is 
putting in place, I think, are much smarter and will allow us 
to get much greater benefit out of our IT expenditures.
    Senator Tester. I farm in the biggest county in Montana.
    Dr. Shulkin. OK.
    Senator Tester. I would own that county and six or eight 
more if I had all the money just that VA spent on IT. It is an 
amazing thing, and I do not know what the solution is, because, 
quite frankly, I think it is necessary, but every dollar you 
spend on IT is one less dollar that goes to the veteran.
    Ms. Council. That is correct, and coming out of private 
industry, that is the reality, is a bottom line cost. And, so, 
the----
    Senator Tester. But is there not any way that you can put 
controls and demand accountability and make sure that if you 
want a product, they give you the product you want, and that 
every time you adapt that product a little bit to make it meet 
the needs of the agency, they do not soak you?
    Ms. Council. You are a hundred percent correct, and you 
will see at each of your places is an update of what we have 
done over the last year, and it is all about getting those 
controls in place. The reality is, if you are going to buy a 
product, you do not customize a product. You move your 
processes to do what the product needs to do----
    Senator Tester. Right. So----
    Ms. Council [continuing]. And that is a big part of it.
    Senator Tester. So, let me ask, and I hesitate to ask this 
question because I should probably know the answer, but I do 
not. Is the DOD and the VA, are their medical records 
streamlined? Can they go back and forth without any problems?
    Dr. Shulkin. I would not go that far, but we do have--we do 
have a working joint viewer that has 170,000 active users 
between DOD and VA. We certified interoperability in April of 
this year. People today are using it to get information between 
DOD and VA, so it works.
    Senator Tester. Is it helping with the claims process, I 
mean, because it would seem to me that if you guys know what 
went on in theater and it transfers----
    Dr. Shulkin. It is.
    Senator Tester [continuing]. Seamlessly, it should reduce 
that number----
    Dr. Shulkin. Ten thousand of those users work for Veterans 
Benefits Administration. They are using it every day to access 
DOD records.
    Senator Tester. So, let me ask you about, since the Choice 
program has come in, we have got hospitals--not as many as we 
are going to have, by the way, when we pass the Veterans First 
Act and we get all this mess cleaned up--but we have got a lot 
of different hospitals. I think the last hospital I was at, 
they said there were 13 different medical record programs in 
the State of Montana alone.
    So, what are you doing there? And, I know it is not just 
your problem, but it is just your problem, because we are 
talking about the veterans and we are talking about shipping 
them out to the private sector. Those folks have to have those 
medical records. You get the drift. You know the rules.
    Ms. Council. So, with DOD, we have actually mapped 25 
different domains so that we can be very interoperable on the 
data side, and using the HIE, which is health interchange that 
Dr. Shulkin mentioned. That is how the information goes in and 
out seamlessly. Everyone is working, and National Coordinator 
for Health Information Technology (ONC) is part of this, to 
make sure we are all talking the same language, it is not two 
languages, so that the doctors do not have a burden put on 
them, but they can clearly respond into our system.
    Senator Tester. OK.
    Ms. Council. That is a big part in this digital area.
    Senator Tester. OK. I wanted to get into telemedicine, but 
I am out of time.
    I just want to say that I think back to when we rolled out 
the Affordable Care Act Web site and what a disaster that was 
in 2010, 2012--2012, I guess it was, maybe 2010. And they had a 
bunch of kids at Stanford--I think it was Stanford, but it 
might have been MIT or it might have been the University of 
Great Falls--that were playing cards and had it figured out in 
about 3 or 4 days. Are we utilizing some of these bright young 
people that are in the university system to help save us money, 
because, honest to God, there is so much money going out the 
door----
    Dr. Shulkin. Yeah.
    Senator Tester [continuing]. In this IT stuff, it blows my 
mind.
    Dr. Shulkin. Well, first of all, we are. We do have a lot 
of members of the Digital Health Service, which are really 
people who sound exactly like what you are talking about, who 
have come into government from some of these startup companies 
and other great IT companies to help. We are using them. We are 
doing hack-a-thons. We are trying to be creative.
    I think right before you came in, the Chairman mentioned 
that Ms. Council is doing a relationship with Georgia Tech; 
again, another great IT school that is going to help us solve 
some of these problems. So, we are not beyond asking for help.
    Senator Tester. OK. That is good. And, by the way, I do not 
mean this to be critical of you guys, but I guess it is, but if 
I was in your boat, you would be critical of me if you were in 
mine, and that is that we have got to figure out some way to 
get these information technologies tricked out without it 
breaking the bank. And, I honestly think we are being taken 
advantage of in a big, big way. That is just my opinion sitting 
from the outside looking in. Thanks.
    Chairman Isakson. Thank you, Senator Tester.
    Senator Tillis.

       HON. THOM TILLIS, U.S. SENATOR FROM NORTH CAROLINA

    Senator Tillis. Thank you, Mr. Chair.
    I think I will pick up where Senator Tester left off. I 
think one thing that we have to recognize, is having been 
involved in large system transformations in my job and 
companies like J&J and Procter and Gamble, the difference there 
that we have to recognize is we have to stabilize the operating 
environment. When you go in and you do a large-scale IT and 
process transformation, the first thing you do is you--and you 
cannot do it unless the chief executive officer (CEO) says, 
everything stops. Stabilize the situation. Inventory the 
complexity. Prioritize the systems and processes that have to 
be changed, then start weaving in out-stage priorities.
    What you have here, though, is a group of people who 
continue to lop on, and I am talking about me and other Members 
of Congress, saying, by gosh, you better get that done. It 
better be on time and on budget. And here is a wholly new 
program we want you to implement within the resources that you 
have. There is no additional appropriation.
    Any executive that made that proposition in any Fortune 100 
company would be fired the next day if they had a CEO who was 
enlightened in trying to turn the business around. So, part of 
what we have to do is recognize we are part of the problem.
    Now, the flip side of that, if you take a look at the 
maverick IT spend, I think you made some comments about, oh, IT 
is hard to deal with so people do their own things. You have to 
reach a point in time inside the VA, if anybody else is 
spending money on net new IT that is outside of your purview, 
they should be fired because they are creating complexity that 
should not be there. If anybody is arguing to keep these five 
or six duplicative systems within a certain VISN that do 
fundamentally the same thing, you wanted it one, they should be 
fired because you have to start simplifying things.
    Even if we stabilize the environment, and we know that is 
not going to happen as long as Congress keeps on coming back 
every couple of months, then we also have to recognize the 
people, process, technology, and time implications of other 
things that we ask you to do, which is why I have asked the VA 
to put together a construct that we can start getting our 
members to think about so that we may get to a point to where 
rather than saying this will be implemented on this date, this 
will be implemented within the construct of the overall 
transition strategy. If we do not, we are never going to get 
out of this mess. We will be saying the same things like have 
been said by Senator Tester and people that sat in these chairs 
long before any of us were ever here.
    But, you all have to be more assertive about when someone 
comes up with a well-intentioned idea that is disruptive to the 
core mission that you are trying to solve. If you do not, I 
will guarantee you, you will not be successful.
    So, if we have this framework--it goes beyond just 
Congressional Budget Office (CBO) scoring. It goes beyond 
Senator Tillis saying that is a great idea.
    Let me tell you how many people will be required, how many 
processes will be affected, how much time, and how much 
technology will have to be directed at implementing this within 
the timeframe you have asked me to implement it. Then, 
hopefully, build a dialog to where we are not disruptive. If we 
do not do that, you will make some progress, but you will not 
make a whole lot.
    And, if you had a CEO that could wave a wand and shut all 
of us up and not create any additional uncertainty in terms of 
your budget--you commit to a budget, you execute to it, manage 
the prices, like Senator Tester said, you can do that through 
supply chain and sourcing--then it is still going to take you 
3-5 years to get to measurable, significant progress. If you 
all made a few good steps in 12 months, 18 months--your short-
term or quick hits--that would be great. We need to have a 
session talking about those very specific things, particularly 
around scheduling, chart movement, and, really, the integration 
with the DOD is child's play compared to what you need to do 
with the non-VA providers and Choice providers. You all know 
that. That is a key piece.
    I think you all have got to do a better job of talking 
about when we are putting proposals in place that are good 
ideas, but fit squarely in the critical path, it is on you. It 
is our problem if you communicate it in a direct way. Say, it 
is not about policy, it is about disruption to this core 
mission that we have been assigned. Then, we are going to 
continue to spin these wheels and you will not be near as 
successful as you were at J&J and at Beth Israel and places you 
were before. It is just not going to happen.
    One question I had around IT compliance is to what extent--
when we went into these projects and we had to stabilize 
things, we were pretty draconian with the business managers and 
the maverick IT shops out in the operation, and you did not get 
one pass. If we saw you acquiring or bringing in a consultant 
under a different account and basically coming up with shadow 
IT, you lost your job because you were a threat to the 
underlying mission that we have all agreed is right for the 
enterprise. Is there that sort of mentality in the VA right now 
and that sort of authority and accountability in the VA right 
now?
    Ms. Council. Yes. We are finalizing an IT/non-IT policy to 
make it very clear what is IT and what should be paid for and 
under support and supervision of IT. Also, our device policies, 
how many and what we are going to allow. We have created 
portfolios for each of the business groups in which they now 
have to be responsible for the work on the portfolio and 
actually putting projects on hold or stopping them because we 
need to focus to get that work done. The objective will be, if 
you want something done, you have got to take something else 
off. You have got to learn how to make tradeoffs so we can 
complete the job.
    So, the whole concept of being agile is that we are going 
to be getting things done, not having these projects that last 
forever, and owning that process is Office of Information and 
Technology (OI&T).
    Senator Tillis. Well, Ms. Council, you know, I supported 
your nomination and I think you have a great background. I 
think you can do the job if we do not add to the impediments 
that will allow you to do it and that you continue to ask for 
the authority you need to implement some discipline that has 
not been evident in the VA for quite some time. That is why you 
had this hairball. I would like to meet maybe with you to talk 
about your governance model and specific examples of where you 
have had to apply it and assert that governance to areas in the 
organization.
    Thank you, Mr. Chair.
    Chairman Isakson. Thank you, Senator Tillis.
    Senator Murray.

        HON. PATTY MURRAY, U.S. SENATOR FROM WASHINGTON

    Senator Murray. Thank you, Mr. Chairman.
    Dr. Shulkin, let me just say, I was really disappointed by 
the VA and DOD's decision to abandon the Joint Integrated 
Electronic Health Care Records System back in 2013. A fully 
integrated system would have provided VA and DOD with an 
opportunity to really lead the health industry.
    I was equally frustrated to hear earlier this year that VA 
is announcing a new review now of how to proceed with 
implementing an improved electronic health record. The decision 
of whether to use an upgraded version of VistA for the long 
term or to purchase a commercial product should have been 
settled years ago. And fundamental questions like whether to 
use an open source approach should also have been resolved. 
And, I am really concerned by the lack of long-term planning 
and whether the time and money invested so far will really be 
for nothing. What has changed in the Department's thinking that 
would lead you to walk away from VistA?
    Dr. Shulkin. First of all, I appreciate you being so direct 
about your disappointment, because I certainly think that given 
the amount of time that you have spent on this Committee and 
efforts on this, I can understand that.
    LaVerne came in, really, with a charge to take a look at 
these systems and to give her assessment, given her experience, 
about where VA needs to go. The first thing that she did was to 
reach out and to partner with the customers, all of us. And, 
so, we have really taken that very seriously, which is to say, 
look, we came in without as much history, but we came in with 
the goal of making the right decision for VA in the future, 
because we do not want to find ourselves, like Senator Boozman 
said, 50 years down the road with outdated technology. We have 
been working on that concept.
    I do not think that anything that we are working on, which, 
as you know, right now, taking VistA and Enterprise Health 
Management Platform (E-HMP), which is really--instead of having 
130 separate versions of an electronic medical record, which we 
have today, creating a single version in E-HMP. We do not 
believe any of that work is going to go to waste or that money 
has been wasted. We are looking at a transition plan that 
brings VA into a future state of where all health care is going 
to need to be, and that is this issue of interoperability with 
community providers, with VA, with DOD.
    I am going to let LaVerne talk more about that, but we 
appreciate your perspective on this and we are really trying to 
do the right thing here.
    Ms. Council. I think, at the end of the day, there was a 
lot of care to focus on that, because I have a lot of respect 
for the VistA product. But, the VistA product is a 40-year-old 
product, and when we start to think about the care to the 
veteran and the clinical management, the clinical operations 
management, the fact that key analytics are needed to 
understand if we are really showing meaningful use, and then 
ultimately getting us to the point that we can really engage 
the veteran where they are, not where we need them to be. It 
required us to look at how we are moving data, how we are doing 
analysis, how we are using the clinical information, how we are 
using our supply chain, how we are getting the pharmacy 
aligned, all those things.
    So, as we started to go through it, said, what can 
technology do today that it could not do yesterday, and it can 
do a lot. And, so, we have laid out as a digital platform that 
we will take advantage of what technology can do on behalf of 
the veteran, but also on behalf of the community, because the 
care in the community, the number of women veterans now added 
into the process, as well as the aging of the veteran 
population and the mobility of the veteran, requires that our 
tools, our insight, and our engagement with them change.
    So, what we have laid out is really a platform that we 
actually have gotten insight from the Office of the National 
Coordinator for Health Information Technology (ONC), other 
industry heads, as well as the DOD. We meet with the DOD. I 
engage with the DOD leadership. There is no animosity or issue 
there and they have been very helpful as we start thinking 
about that process.
    Senator Murray. Except that we have been hearing that for a 
very long time, so----
    Ms. Council. I----
    Senator Murray. Excuse my skepticism, because I have sat 
here and heard that over and over again. I want you to be 
successful, but we have heard the same words over and over 
again. Now it is going to be integrated. Now we are talking to 
DOD. So, I wish you the best, but we really do need results.
    I am out of time and I want to ask you very quickly about 
cybersecurity. In 2016 alone, we have seen several alarming 
attacks on hospitals, where patients' records have been held 
ransom----
    Ms. Council. Mm-hmm.
    Senator Murray [continuing]. By cyber criminals. With this 
push toward telehealth and electronic health records and all of 
that, talk to me about some steps that you are taking to 
collaborate with U.S. Department of Health and Human Services 
(HHS) and other agencies to secure patient data and health IT 
against cyber attacks.
    Ms. Council. The ransomware, we actually had the interface 
with it. You were not aware of it because we were able to 
address it from an IT perspective and correct it quickly. We 
did alert, as we normally would when one of those things 
happens, but it did come into the--try to come into the 
environment. We were well prepared for it.
    And, upon my arrival, the first thing we did was create an 
enterprise cyber strategy process and new strategy because it 
was critical. We have ten new domains, including medical cyber, 
which was not part of the things that we looked at. And we also 
focused on cybersecurity around the internet of things, which 
is also something we were not looking at.
    So, at this point, when we talk about the material 
weakness, U.S. Department of Homeland Security (DHS) is our 
partner along with the National Institute of Standards and 
Technology (NIST) and the various other agencies that we work 
with. We have been very collaborative with them. DHS has been 
doing penetration tests for us and giving us feedback on where 
our opportunities are, and we want to leverage whatever they 
are doing real time. And, so, I am real pleased that they have 
been there for us.
    Senator Murray. OK. And, finally, really quickly, are we on 
track to get the IT done for caregivers, the caregivers 
program?
    Ms. Council. Yes, as far as I am aware. Yes.
    Senator Murray. All right. And, if you can give me--I have 
got a few other questions I want to get to you all. Thank you.
    Chairman Isakson. Thank you, Senator Murray.
    Senator Sullivan.

          HON. DAN SULLIVAN, U.S. SENATOR FROM ALASKA

    Senator Sullivan. Thank you, Mr. Chairman, and I appreciate 
the panel's focus on these important issues today. I just am 
trying to get a bit of the sense of the job that you have, 
Secretary Council. I know it is a big job, a big undertaking. 
When you talk about interoperability, it is a great word, but, 
of course, it means a lot. How many different technology 
systems exist within the VA?
    Ms. Council. Over a thousand.
    Senator Sullivan. A thousand?
    Ms. Council. Uh-huh.
    Senator Sullivan. And how many of those are currently 
talking to each other?
    Ms. Council. Oh, very few, if any. I would have to come 
back and look at that. But, integration really does not happen 
at a system level. Integration happens at the data level and 
that is one of the reasons that we are putting in enterprise 
data management function, because we did not have one.
    Senator Sullivan. So, are you trying to integrate the over 
a thousand systems, as well, IT systems?
    Ms. Council. You do not try to integrate the systems. You 
work with the data, and the data is key.
    Senator Sullivan. In terms of the interoperability with the 
DOD and the providers, what are the biggest challenges there?
    Ms. Council. The biggest challenge is that within health 
care, there is no common language of interchange. Right now, if 
you are on a particular EHR, you can talk maybe to the data out 
of the EHR, and I say maybe. It requires the mapping that was 
done between the DOD as well as ourselves, and that is what we 
have done to be able to say we are interoperable with the DOD.
    Senator Sullivan. Do you try to sequence that first at the 
VA, then at the DOD, and then within the provider community, or 
are you trying to do that simultaneously, all the three 
different areas?
    Ms. Council. Actually, we work with the ONC as the 
oversight body to decide on what those standards are and then 
work with all the partners to create that standard and then get 
that agreement.
    Senator Sullivan. Let me ask, on the budget, I think that 
the number I saw was $4.3 billion with regard to the IT budget. 
My understanding is the IG is currently investigating the 
potential misuse of funds of up to $60 million. Who makes the 
final decisions on expenditures like this and how are you 
combating waste?
    Ms. Council. Well, there is a combination. As far as 
combating waste, one of the things that we are doing is putting 
in a full implementation of Federal Information Technology 
Acquisition Reform Act (FITARA), which creates a source 
selection process being with the CIO. So, we are putting a 
sourcing function within OI&T so that we can clearly have an 
understanding of all the contracts that are going on, all the 
spend, and also the performance.
    Senator Sullivan. Do you believe you have a good 
understanding of that right now?
    Ms. Council. Not what I would like to have, no.
    Senator Sullivan. So, who does make that decision, those 
kind of decisions, and is it made in, like, levels, so $5 
million goes to this decision level, is made by an assistant 
secretary, $60 million, maybe the under secretary? Who is 
responsible, because as you know, on accountability issues, 
sometimes with big organizations everybody is responsible and 
nobody is responsible. Sometimes, it is--actually, I think it 
is actually very important that it be able to have an 
individual responsible.
    Ms. Council. I totally agree with you and that is actually 
what FITARA says. It says that the CIO should be accountable as 
the source selection authority. What----
    Senator Sullivan. So, is that you?
    Ms. Council. What we have done in OI&T is we delegate our 
source selection authority to a group called the TAC, which is 
the acquisition center, to do that purchasing and all those 
things and they have first right of refusal on those items. 
What we are doing right now is working with the leader of that 
organization to refine that and bring that back into our 
processes so we can be fully accountable for every dollar spent 
out of the appropriation.
    Senator Sullivan. So, on the $60 million the IG is looking 
at right now, who is responsible for a number in that kind of 
magnitude?
    Dr. Shulkin. Senator, that particular IG report was talking 
about VHA, so that would be within VHA, or me. That, as you may 
or may not know, because there was recent press coverage on 
this, was actually not a finalized IG report. It has not been 
released, but it got, essentially, leaked out into the press 
and so that is how we learned about this.
    VHA deliberately took steps to spend the money that it did, 
with legal counsel's opinion on this. So, we will not--after we 
see the report first, we will review it carefully, but likely 
not concur that that was a correct conclusion, that the money 
was misappropriated.
    Senator Sullivan. Dr. Shulkin, so it is you when it is VHA?
    Dr. Shulkin. Mm-hmm. Yes.
    Senator Sullivan. And Secretary Council, when is it you? 
Again, I am trying to look for names, not to--I just think it 
creates more accountability.
    Dr. Shulkin. Sure.
    Ms. Council. The IG report is a VHA report, I think, to Dr. 
Shulkin's point. But for IT appropriation and IT spend, and 
when it is development dollars and infrastructure dollars, it 
should be the CIO.
    Senator Sullivan. You?
    Ms. Council. It is me.
    Senator Sullivan. Good. OK.
    Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Sullivan.
    Ms. Eskenazi, I hate to have you come and spent the whole 
afternoon----
    [Laughter.]
    Chairman Isakson [continuing]. And not be asked a question, 
and with being on the Veterans' Appeals Board, you are probably 
the person to ask this question. I understand the White House 
has sent to the agency a reform of the appeals process, is that 
correct?
    Ms. Eskenazi. Umm----
    Chairman Isakson. Or that you are working on a reform of 
the Veterans' Appeals----
    Ms. Eskenazi. Yes. We are working on legislative reform for 
the appeals process, correct.
    Chairman Isakson. How close are you to completing that, and 
has it been scored yet?
    Ms. Eskenazi. My understanding is that there is an informal 
scoring that has been offered, but we do not govern the CBO 
Office. But, our position is that the legislation itself is 
cost neutral and will actually save money in the long run.
    Chairman Isakson. We are still going to need that score.
    Ms. Eskenazi. Indeed. Uh----
    Chairman Isakson. Pass that along to Secretary McDonald and 
Sloan Gibson and the others, if you would.
    Ms. Eskenazi. Certainly, and we hope that the 
Congressional--we know that we have provided the Congressional 
Budget Office with all the information they have requested, and 
informally, I understand that they agree that it is cost 
neutral. But, the formal score has not been provided to 
Congress yet, so----
    Chairman Isakson. Senator Sullivan.
    Senator Sullivan. Mr. Chairman, if I may, just to follow up 
on your question----
    Chairman Isakson. Sure.
    Senator Sullivan. So, you might know that I introduced a 
bill that was a pilot program that dealt with appeals, and I 
know we have been working closely with the VA on that, and I 
know the VA is looking at a broader appeals reform. Can you 
talk about the differences, if you are familiar with what we 
have been working on with your staff, because one of the 
concerns I have is we would love to reform the whole program, 
because I think everybody recognizes that the appeals process 
needs to be reformed.
    One of the concerns is when--you know, I think we have seen 
it, certainly we have seen it with the Choice Act--that when 
you undertake a massive reform, that it can have some kind of 
unintended consequences that people were not--that none of us 
really thought about, and then it can kind of, in some ways, 
create more damage than the good it is meant to do.
    So, can you just talk about kind of the idea of a pilot, 
which we certainly do not want to be less ambitious, but we 
want to essentially test drive the idea before we go into a 
full-fledged, full-monty reform process that might solve 
everything, but might also create more problems than it solves.
    Ms. Eskenazi. Certainly, a very fair question. The two 
ideas are substantially different. The pilot that is in the 
draft bill is something that was initiated a number of years 
ago and is something that offers a slight modification in the 
current system for volunteers who wish to enter that.
    As we looked at this more closely in recent time, with full 
participation by all the major VSOs and other stakeholders, 
together, we designed a much different type of a framework that 
would be beneficial for all appellants in the future, and it is 
something that would offer a much more timely, transparent, yet 
still fair process for all veterans, unlike the pilot, which 
was just kind of a sampling, making a few modifications in the 
existing system, but it is not going to have--the more we have 
looked at this, it is not going to have that measurable lift 
that we see that we really need in the appeals process.
    The appeals process is broken. What we have presented to 
this Committee is something that is a collaborative process. It 
really has some ideas that had never been part of the process 
in the past, such as the protection of that original effective 
date and offering veterans more options with the idea of trying 
to resolve the matter at the earliest point in the process 
while still offering opportunity for veterans to come back. So, 
what we have is something that really could change the 
landscape for all veterans into the future, whereas the pilot 
is really not going to make a substantial difference.
    So, that is kind of the major differences that we see. We 
are really hopeful that--I know there is a concern that it has 
been developed quickly, but the people that have been working 
on these ideas have--are experts in the area and have really 
been talking about this for many, many years. I mean, frankly, 
going back 20 years, you can find documentation of the same 
discussions.
    Senator Sullivan. So, you are confident that that, if it 
were implemented across the board in a very broad fashion, that 
working the kinks out of that system is not going to be 
something that you are worried about that could overwhelm its 
intended benefits?
    Ms. Eskenazi. I am very confident that this is the best 
design that I have seen in all the years that I have been 
working on this. And again, I do not think any one person can 
claim ownership in this design. It was a team effort, which is 
what makes it all the more strong. And I think that it really 
will offer a wonderful experience for veterans into the future.
    The current system is broken. It is never ending. And we 
are just going to--it is going to continue to get worse if we 
do not take action.
    Senator Sullivan. Thank you, Mr. Chairman.
    Chairman Isakson. Well, thank you, Senator Sullivan, and I 
appreciate your chiming in because your recommendation in the 
Veterans First bill, which we incorporated in that legislation 
the pilot program, was designed particularly to do exactly what 
you outlined, and that is develop a program, get the bugs out 
of it, and implement it across the system and have a better 
response.
    I might also add that it did not come up during the 
hearing, but we have 450,000 pending appeals that are still 
backlogged in the system, which is untenable for an 
organization of veterans like we have. So, we want to--not only 
do we want to put in a system that works, we do not ever want 
to be in a situation where we grow to a 450,000-person backlog 
before we do it. It is my understanding that the recommended 
changes that are going to be recommended to us at some point in 
time will not deal with the 450,000 backlog. It will just deal 
with appeals in the future. Is that correct?
    Ms. Eskenazi. That is correct. We have two separate issues. 
We have changing the system for the future, and that is the 
reform that is in Senator Blumenthal's draft bill. And then we 
have a plan that we have been developing with the VSOs on 
managing the current inventory of appeals that were filed under 
the current legal framework.
    Chairman Isakson. Are you not glad I did not let you get 
away without asking the question? [Laughter.]
    Well, tell them back home we are still concentrating on the 
veterans' appeal process and we are going to do everything we 
can to facilitate improving that.
    I want to thank all of you for coming today and being a 
part of the hearing, and unless there is any further input, we 
stand adjourned.
    [Whereupon, at 4 p.m., the Committee was adjourned.]
                                ------                                

Response to Posthearing Questions Submitted by Hon. Richard Blumenthal 
    to Hon. David Shulkin, M.D., U.S. Department of Veterans Affairs
    Question 1.  On June 20, 2016, the Department of Veterans Affairs, 
Office of Inspector General, issued the report, Review of VHA's Alleged 
Manipulation of Appointment Cancellations at VAMC Houston, Texas 
(Report No. 15-03073-275). In it, the Inspector General states ``VHA's 
current scheduling software is antiquated and cumbersome to use and as 
we have recently reported, it is time for VA to commit to make its 
replacement or modernization a priority.'' Dr. Shulkin, in his written 
testimony for the hearing on June 22, 2016, wrote ``VA recognizes the 
urgent need for improvement in VA's appointment scheduling system.'' 
However, two years after the initial wait list and scheduling scandals 
broke, the VistA Scheduling Enhancement program is still in the pilot 
phase and being tested in only 10 locations.
    a. How does this slow pace of improvement translate into addressing 
what Dr. Shulkin referred to as an ``urgent need?
    Response. The VA Scheduling System project is in the implementation 
phase. VistA Scheduling Enhancements (VSE) has been developed, tested, 
and deployed for initial use in VA medical centers or clinics at 
Tucson, Salt Lake City, Asheville, Chillicothe, Cleveland and Hudson 
Valley. Based on initial user acceptance testing and feedback, VHA is 
making adjustments to the software and scheduling best practices 
guidelines before VSE is deployed to additional facilities. In addition 
to VSE, the Office of Information and Technology (OIT) Mobile team has 
been working with VHA on the development of the Veteran Appointment 
Request (VAR). The VAR mobile application allows Veterans, who are 
enrolled in VA's health care system, to request and view primary care 
and mental health appointments at VA facilities. The mobile application 
also allows Veterans to schedule and cancel selected primary care 
appointments at facilities where they have a Patient Aligned Care Team 
(PACT). Additionally, another web application, Schedule Manager (SM), 
will enable VA staff to process the VAR incoming requests for 
appointments and/or enable Clinical staff to schedule appointments for 
patients. Veterans surveyed indicated that 91 percent felt that once 
completed, the VAR would improve Veterans' sense of access to care.

    b. When will we see a true modernization or replacement of the 
scheduling system available in all VA locations?
    Response. VHA is implementing scheduling system improvements 
through the use of VHA's VSE, which provides a graphical, point-and-
click interface for schedulers to make appointments. VSE version 1.0 
has been developed, tested, and deployed for initial use at six sites. 
Based on initial user acceptance, adjustments to the software and 
scheduling processes are being made before VSE is further expanded to 
other VA facilities. It is important to clarify that VSE is an 
improvement, but not a full replacement for a VHA scheduling system.
    The comprehensive strategy moving forward is the Digital Health 
Platform (DHP). The DHP will support a better overall experience for 
Veterans throughout the continuum of care. VA is in the early planning 
stage for the DHP, and will develop a business case and cost model to 
shape the strategy. That strategy is includes a commercial-off--the-
shelf (COTS) EHR component with comprehensive scheduling capabilities. 
VA is also in the early stages of assessing business process 
reengineering and other related planning for moving from VistA to a 
Commercial off-the-shelf (COTS) Electronic Heath Record (EHR). A 
decision regarding VA's plans and next steps for the COTS EHR component 
of the DHP is expected by the end of calendar year 2016.

    Question 2.  VA delivered a report to the Senate Committee on 
Veterans' Affairs on December 1, 2014 describing how VA intended to use 
the funding allocated under the Veterans Access Choice and 
Accountability Act. In that report, VA outlined its needs for IT 
development, maintenance, and staffing and estimated it would need 
$376.6 million to support IT development and infrastructure through 
October of this year. However, according to data VA provided to my 
staff of June 6, 2016 VA has spent less than a third of that amount--
just under $107 million--through May 2016. Congress allocated these 
funds so that critical IT investments would be made to expeditiously 
improve the care of veterans. Please explain why we see such a large 
discrepancy between what VA estimated it needed for IT and what it has 
spent to date. Is this an indication that the needs have changed?
    Response. VA's needs have not changed. The approximately $270M 
remaining funds is broken into three funding accounts: Development, 
Modernization, and Enhancements (DME); Infrastructure Sustainment; and 
Pay and Administration.

     Within DME, approximately $46M of the $151M originally 
allocated for fiscal years (FYs) 2015 and 2016 have been obligated, 
leaving $105M remaining. Of the $105M remaining funds, $71M, or 68 
percent, is unobligated for the Medical Appointment Scheduling System 
(MASS) program, while VA assesses the implementation of VSE, currently 
in pilot. VA is determining whether VSE will immediately improve 
scheduling operations without the complexity of integrating a 
completely new scheduling system into our environment. As VA explores 
the direction that we will take for a 21st Century Digital Health 
Platform, an integrated scheduling capability will be included as one 
of our top priority requirements. The additional $35M unobligated 
balance is being used to implement mobile applications, expand 
telehealth initiatives, and improve Veteran's access to VA care and 
services. For example, VA recently released the VAR mobile application, 
which allows Veterans to request and view primary care and mental 
health appointments at VA facilities. Expansion of this application and 
the creation of new mobile solutions will help VA meet the Veteran 
access demands. Additionally, VA has implemented Vets.gov to create a 
single, on-line access point for Veteran benefits and information.
     Approximately $54M of the $186M for Infrastructure 
Sustainment has been obligated. The funding provides information 
technology (IT) equipment for the more than 10,000 new VHA staff. The 
balance of the funding is used to build-out the IT requirements of new 
VA facilities. Although the construction and leasing of these 
facilities has taken longer than expected, the funding needed to 
procure, install, and maintain the IT equipment necessary to open these 
new VHA locations is critical to the success of these facilities.
     To date, VA has obligated approximately $10M of the $39M 
set aside for Pay and Administration. The hiring of new IT staff to 
support VHA's staffing increase took longer than expected, but we are 
currently staffed at 93 percent of those positions, with only 13 
current vacancies that we expect to have filled by the end of the 
fiscal year. The remaining $29M unobligated balance will be used to 
fully fund the 192 positions in FY 2017.
                                 ______
                                 
  Response to Posthearing Questions Submitted by Hon. Jerry Moran to 
     Hon. David Shulkin, M.D., U.S. Department of Veterans Affairs
    Question 3.  What new technologies, such as the use of commercial 
cloud service providers, does VA plan to incorporate into the new EHR 
platform to ensure that it is future proofed? Who is the IT POC 
managing the initiative?
    Response. For the Digital Health Platform for Next Generation of 
Care, VA will adopt a cloud-first approach that looks at commercial 
offerings that are architected to operate on a cloud infrastructure. 
Pending final decision, the core of this platform would be a COTS 
Electronic Health Record (EHR) system. COTS EHR vendors would be key 
partners to assist VHA with their needs by optimizing available 
solutions that operate in a cloud infrastructure. The core principles 
for creating and operating the platform include:

     Adopting a Software-as-a-Service (SaaS) platform paradigm 
for ``future proofing'' VHA's technologies. The essential elements of a 
SaaS product model would incorporate the following concepts:

        - One Logical Data base system: The EHR system needs to have an 
        underlying database that has one data model. This means:

                   VHA will always be on one version of the 
                data
                   VHA is using the same, up-to-date 
                nomenclature for clinical terms
                   There is no requirement of synchronization 
                of the data. This is unlike the current scenario with 
                over 130 instances of VistA at the application level 
                (i.e., a transaction made in the system is available 
                immediately VHA-wide and enabled by the internal 
                architecture). An update (i.e., Medication updates from 
                RxNorm database), will instantly be available to 
                everyone.

        - One Application Codebase: To ensure that all VHA providers 
        have access to the same software capability and are able to use 
        common and consistent processes, the application will be on 
        only one live version of running code. Upgrades to the code 
        will be simultaneously accessible to all providers. The 
        architecture would allow for scale-out of the application tier 
        to provide a high performance user experience.
        - One Set of Workflows: In order to have consistent business 
        processes, VHA-specific workflows would be established to allow 
        for best practices to be disseminated across VHA consistently. 
        Setup of one set of workflows in one logical instance will 
        ensure that policy compliance is simplified.
        - One Gateway for Data: Given the critical need of data 
        exchange between multiple care settings, within and outside 
        VHA, there will be a single, authoritative gateway for the 
        exchange of data between the EHR and non-VA systems. The data 
        exchange will need to support semantic interoperability.

     Leveraging the innovation of multiple partners by 
replacing legacy and homegrown systems with best-fit, class-leading 
COTS solutions for all key components to create and sustain the 
platform. For all the foundational components, we will look first at 
the commercial products that have the best cloud-based architecture 
within their solution, (i.e., solutions that are either already on the 
cloud or have a robust architecture and roadmap that will allow VA to 
deploy the solution using commercial and government cloud providers).
     Retaining the flexibility to use VA's negotiating position 
and encouraging competition among cloud infrastructure vendors who 
provide similar capabilities to manage Total Cost of Operations.
     Enabling interoperability and rapid innovation through 
Application Programming Interfaces (APIs) to create value from shared 
resources and promote an entrepreneurial ecosystem. Working with 
multiple partners on standards for APIs. The ONE API framework will 
allow VA to use new and innovative solutions, directly from the cloud, 
without having to install or develop such solutions in-house. These 
principles will provide the capability of swapping in or out solutions 
with a great deal of flexibility that will allow VA to future-proof its 
platform by adapting to change in the commercial technology 
environment. VA is currently working on a Public-Private partnership 
with the Interoperability Integration Innovation Lab of Georgia 
Institute of Technology where a rapid proof of concept will be 
developed to validate several of the Digital Health Platform concepts, 
through working demonstration of clinical scenarios that are applicable 
to our Veteran population.
                                 ______
                                 
  Response to Posthearing Questions Submitted by Hon. John Boozman to 
     Hon. David Shulkin, M.D., U.S. Department of Veterans Affairs
    Question 4.  In February 2016, we met in my office and discussed 
third-party collections and possible IT solutions for non-VA care. VA-
OIG specifically has reported that as of 2011 over $110M annually was 
left uncollected from third party payments. With the rise of non-VA 
care those dollars left uncollected have most likely increased. 
Language in the FY 2016 Omnibus Appropriations conference report 
instructed the Department of Veterans Affairs to ``conduct a pilot 
similar to the one described in the Senate report.''
    Specifically, the report language ``instructs VA to initiate within 
90 days after the enactment of the act a pilot program in one Veteran 
Integrated Service Network [VISN] that shall last 18 months. The 
Department shall choose through a fair and open competition a non-
government entity with substantial private sector revenue cycle 
management experience to conduct the pilot.'' The purpose of seeking 
best of breed with commercial experience is to provide best value to VA 
by leveraging the best the private sector has to offer.
    As we discussed in our February meeting, the language is specific 
that the entity conducting the Pilot be a ``non-government entity.'' 
This language was written so that VA could not send this pilot to a 
federally funded research development center (FFRDC). This pilot is 
designed to improve and reengineer the processes at the front end, 
middle, and backend at the CPACs so that these dollars collected are 
maximized and can be put back into VA health care system.
    Please provide me with an update on the status of this important 
pilot as well as if there has been any publication of a procurement or 
RFP for the pilot utilizing full and open competition.
    Response. In May 2016, VA submitted its report to Congress on 
Veterans Access, Choice, and Accountability Act (Act): Third Party Fee 
Collections, as requested in the Senate Appropriations Report, page 53, 
Public Law 114-57. The Senate Appropriations Committee's recommendation 
to contract with a private-sector entity that supports the initiation 
of a pilot within 90 days after enactment of the Act is not feasible. 
VA could begin developing an acquisition package within 90 days of 
enactment of the Act, but it is not feasible to secure a contract and 
establish a pilot within the required timeframe. On average, it takes 
six months to develop an acquisition package and award the contract.
    VHA currently works with several non-governmental entities with 
substantial private sector revenue cycle management experience. In 
addition, VHA works with Third-party vendors experienced in VA and 
commercial revenue cycle management. These vendors provide expertise on 
several activities, including:

     Developing standard operating policies
     Performance monitoring
     Developing annual collections forecasts for VA and Care in 
the Community collections.

    These vendors have supported VHA's Non-VA Revenue Team and ongoing 
efforts to monitor performance and project collections at individual VA 
medical centers and across the Nation. VHA also utilizes industry 
expertise to develop and distribute the annual collection targets for 
VA and Non-VA Care collections and reviews the potential impact of the 
Veterans Choice Act on Medical Care Collections Fund collections. 
Additionally, VA has taken several steps to address the initiatives 
requested through the pilot program. This collaboration continues 
today.
    VA has taken important steps to implement a business case that is 
focused on process standardization, staff education and training, and 
consistent system applications to increase reimbursement to VA from 
Non-VA fee care. VHA has implemented process improvements that have 
positively impacted Non-VA Medical Care/Revenue results, including:

    1. Reengineered standardized business processes, policies, and 
procedures
    2. Developed the standardized reports for first and Third-Party 
revenue billing and Third-Party revenue precertification
    3. Developed Non-VA Care/Revenue metrics and monitoring process
    4. Developed and delivered standardized training to revenue staff
    5. Developed Internal Controls for testing, which started in FY 
2014

      

                                  [all]