[Senate Hearing 114-299]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-299

                     GAO'S HIGH-RISK LIST AND THE 
                     VETERANS HEALTH ADMINISTRATION

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 29, 2015

                               __________

       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

                              ----------                              

                             April 29, 2015
                                
                                
                                SENATORS

                                                                   Page
Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia........     1
Blumenthal, Hon. Richard, Ranking Member, U.S. Senator from 
  Connecticut....................................................     2
Hirono, Hon. Mazie, U.S. Senator from Hawaii.....................    44
Sullivan, Hon. Dan, U.S. Senator from Alaska.....................    46
Manchin, Hon. Joe, U.S. Senator from West Virginia...............    48
Tillis, Hon. Thom, U.S. Senator from North Carolina..............    51
Tester, Hon. Jon, U.S. Senator from Montana......................    54
Rounds, Hon. Mike, U.S. Senator from South Dakota................    56
Boozman, Hon. John, U.S. Senator from Arkansas...................    58

                               WITNESSES

Draper, Debra A., Ph.D., Director, Health Care, U.S. Government 
  Accountability Office..........................................     3
    Prepared statement...........................................     5
    Response to posthearing questions submitted by:
      Hon. Johnny Isakson........................................    63
      Hon. Dan Sullivan..........................................    64
Daigh, John D., Jr., M.D., C.P.A., Assistant Inspector General, 
  Office of Healthcare Inspections, Office of Inspector General, 
  U.S. Department of Veterans Affairs; accompanied by Gary Abe, 
  Deputy Assistant Inspector General for Audits and Evaluations, 
  Office of Inspector General....................................    23
    Prepared statement...........................................    24
    Interim report on the Phoenix inspection.....................    40
Clancy, Carolyn M., M.D., Interim Under Secretary for Health, 
  Veterans Health Administration, U.S. Department of Veterans 
  Affairs; accompanied by Stephen W. Warren, Executive in Charge 
  and Chief Information Officer, Office of Information Technology    32
    Prepared statement...........................................    34
    Response to posthearing questions submitted by:
      Hon. Richard Blumenthal....................................    65
      Hon. John Boozman..........................................    66
      Hon. Dan Sullivan..........................................    66

 
                     GAO'S HIGH-RISK LIST AND THE 
                     VETERANS HEALTH ADMINISTRATION

                              ----------                              


                       WEDNESDAY, APRIL 29, 2015

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:35 p.m., in 
room 418, Russell Senate Office Building, Hon. Johnny Isakson, 
Chairman of the Committee, presiding.
    Present: Senators Isakson, Boozman, Rounds, Tillis, 
Sullivan, Blumenthal, Brown, Tester, Hirono, and Manchin.

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

    Chairman Isakson. I call this hearing of the Senate 
Veterans' Affairs Committee to order.
    We appreciate our witnesses being here today. We are here 
to talk about the GAO's High-Risk List, something the VA enjoys 
a prestigious place on in many areas. I appreciate the 
testimony we are about to hear. I read a lot of the testimony 
last night before the hearing today and I think this will be a 
meaningful and important hearing.
    As of April 1, 2015, more than 100, approximately 68 
percent, of GAO's recommendations are still open, and 40 
percent of the recommendations are more than 3 years old. These 
are VA recommendations. GAO meets regularly with the VA to 
discuss what is needed to get off of the list. It should not 
take a public scolding like a hearing of this type for the VA 
to implement both GAO and IG recommendations.
    It is unclear from VA's testimony if they even understand 
the importance of being on the list or off the list, for that 
matter. Nowhere in VA's testimony do they address the specific 
concerns raised over the years by GAO or the IG. The testimony 
only outlines the programs VA has said it put in place for a 
long time. If those programs had worked, VHA would not have 
been placed on the list to begin with. VA should not simply 
focus on the number of recommendations they can close. They 
should focus on all the recommendations. Much like the scandal 
that erupted in Phoenix this time of year, the problem was not 
isolated to Phoenix but it was systemic in nature.
    Historically, the government as a whole performs very 
poorly in the area of information technology and VA is no 
exception. Federal IT has been the area of concern for GAO. 
Protecting our veterans' personal health care information is a 
fundamental trust of the VA, yet it continues to be a security 
issue, most recently highlighted by the IG, whose report and 
testimony today, I might add, is outstanding. Allowing 
contractors to access VA's network from foreign countries, 
particularly China, raises enormous red flags. The IG's 
testimony outlines the fact that the VA has over six thousand--
six thousand--outstanding systems security risks that have not 
been remediated.
    It is time we raised the visibility of this problem to a 
public hearing, and I am delighted to turn it over to Ranking 
Member Richard Blumenthal.

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

    Senator Blumenthal. Thanks, Mr. Chairman, and thank you 
once again for your leadership on these issues we have found in 
the VA.
    This week, I received an update from the GAO on the VA's 
progress in addressing some of the recommendations since the 
announcement of VHA's inclusion on the High-Risk List. I also 
understand that the VA and GAO are meeting periodically in an 
effort to address some of the outstanding recommendations. 
These recommendations deal with deep seated, systematic 
problems in Veterans Health Administration, including 
inadequate oversight and accountability, ambiguous policies and 
inconsistent processes, information technology challenges, 
inadequate training for VA staff, and unclear resource needs 
and allocation priorities.
    The services that you provide are to people who are 
accustomed to a chain of command and to people being held 
accountable in that chain of command. When someone fails to do 
his or her job, they are fired. I would like to see the same 
accountability in the VA and in the Federal Government that we 
see in the United States military most of the time--not all of 
the time, but at least where men's and women's lives are at 
stake. They are in our health care system every bit as they are 
in combat. I would like to see the same expectation of 
accountability, and I hope that the GAO's report and its list 
will indicate that the time for accountability is now.
    I share the Chairman's concerns and I expect a very 
productive and informative hearing today. Thank you.
    Chairman Isakson. Thank you, Senator Blumenthal.
    We will go directly to our testimony. I welcome Senator 
Brown to our hearing today. Thank you for being here.
    We have three witnesses to testify, Debra Draper, Ph.D., 
Doctor, Director of Health Care Team, the Government 
Accountability Office; John Daigh, Doctor, Assistant Inspector 
General for Healthcare Inspections, Office of the Inspector 
General, and Mr. Gary Abe, Deputy Assistant Inspector General 
for Audits and Evaluations, Office of Inspector General; and we 
all know Carolyn Clancy, Dr. Carolyn Clancy, Interim Under 
Secretary for Health, Department of Veterans Affairs, 
accompanied by Stephen Warren, the Executive in Charge for the 
Office of Information Technology and the Chief Information 
Officer.
    We will begin with Dr. Draper.

  STATEMENT OF DEBRA A. DRAPER, Ph.D., DIRECTOR, HEALTH CARE, 
             U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Draper. Chairman Isakson, Ranking Member Blumenthal, 
and Members of the Committee, I appreciate the opportunity to 
be here today to discuss the addition of veterans' health care 
to GAO's High-Risk List for the first time in 2015.
    Since 1990, GAO has regularly reported on government 
operations that we have identified as high risk due to their 
vulnerability to fraud, waste, abuse, and mismanagement, or the 
need for transformation to address economic, efficiency, or 
effectiveness challenges. In my testimony today, I will address 
the specific areas of concern that led to VA health care being 
added to GAO's High-Risk List and actions needed for its 
removal.
    In designating VA health care as high risk, we categorize 
our specific concerns into five broad areas. The first area of 
concern is VA's ambiguous policies and inconsistent processes. 
This has led to inconsistencies in how facilities interpret 
policies and carry out processes at the local level. In 2012, 
for example, we reported that unclear policies led staff at VA 
facilities to inaccurately record the required days for 
outpatient medical appointments and to inconsistently track new 
patients waiting for medical care.
    The second area of concerns is inadequate oversight and 
accountability. Specifically, we found that certain aspects of 
facilities implementation of VA policies are not routinely 
assessed, oversight activities are often impeded by VA's 
reliance on facilities' self-reported data, and oversight 
activities are not always sufficiently focused on compliance 
with requirements. The facilities' self-reported data lack 
independent validation and often are inaccurate or incomplete.
    The third area of concern is VA's information technology 
challenges. In various reports, we identified extensive 
limitations in the capacity of existing technology systems, 
information technology systems, including systems that are 
outdated and inefficient. For example, we have reported on VA's 
failed attempts to modernize its appointment scheduling system, 
which is prone to user error and manipulation.
    The fourth area of concern is inadequate staff training. In 
a number of reports, we identified gaps in VA training that 
places the quality and safety of veterans' health at risk. For 
example, in our October 2014 report on VA's implementation of 
its new nurse staffing methodology, staff reported that the 
training was time consuming to complete and difficult to 
understand. They also said it was difficult finding the time to 
complete the training while also carrying out their patient 
care responsibilities.
    The fifth area of concern is unclear resource needs and 
allocation priorities. In various reports, we discussed gaps in 
the data VA needs to efficiently identify resource needs and 
ensure that resources are effectively allocated across its 
health care system. In May 2013, for example, we reported that 
VA lacked critical data needed to efficiently assess whether 
the use of non-VA providers was more cost effective than 
augmenting its own capacity to deliver some services.
    VA has taken actions to address some of our recommendations 
related to its health care system, including those related to 
the five broad areas of concern just discussed. However, there 
are more than 100 recommendations that have yet to be fully 
resolved.
    It is critical that VA leaders act on the findings of its 
Office of the Inspector General, GAO, and others to develop and 
implement solutions that mitigate risk for the timeliness, cost 
effectiveness, quality, and safety of veterans' health care. 
The Veterans Access, Choice, and Accountability Act included a 
number of provisions intended to help VA address systemic 
weaknesses. Effective implementation, coupled with sustained 
Congressional intention, will help ensure that VA continues to 
make progress in improving veterans' health care.
    We plan to continue monitoring VA's efforts to improve its 
health care system. We currently have work underway focusing on 
areas such as veterans' access to primary care and mental 
health care services, primary care productivity, non-VA care, 
and mechanisms VA uses to monitor quality of care.
    An assessment of the status of VA health care's high-risk 
designation will be done during our next update in 2017 using 
the five criteria for removal from the High-Risk List. These 
include leadership commitment, capacity, development of an 
action plan, monitoring, and demonstrated progress.
    Mr. Chairman, this concludes my opening remarks. I am happy 
to answer any questions.
    [The prepared statement of Ms. Draper follows:]
 Prepared Statement of Debra A. Draper, Ph.D., Director, Health Care, 
                 U.S. Government Accountability Office

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    Chairman Isakson. Thank you, Dr. Draper.
    Dr. Daigh.

   STATEMENT OF JOHN D. DAIGH, JR., M.D., C.P.A., ASSISTANT 
INSPECTOR GENERAL, OFFICE OF HEALTHCARE INSPECTIONS, OFFICE OF 
    INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
ACCOMPANIED BY GARY ABE, DEPUTY ASSISTANT INSPECTOR GENERAL FOR 
      AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL

    Dr. Daigh. Chairman Isakson, Ranking Member Blumenthal, 
Members of the Committee, I am honored to attend this hearing. 
The Office of the Inspector General's work through its Office 
of Healthcare Inspections, Office of Audit and Evaluations, and 
Office of Investigations supports the decision of GAO to place 
Veterans Health Administration on its High-Risk List.
    There have been a number of recent hearings which have 
identified many of the issues that VA must address, from 
business processes, IT capabilities, organizational structure, 
to personnel practices. VA leadership has committed to make 
these changes.
    The Choice Act recognizes that VA cannot provide all the 
medical care that veterans require. The decisions to make or 
buy health care must be done carefully and with broad community 
input. I hope that stakeholders will test the decisions VA 
makes over the coming months primarily by assessing the impact 
that decisions have upon the quality of health care provided.
    With that, Mr. Abe from the OIG Office of Audits and 
Evaluations and I will be pleased to answer your questions.
    [The prepared statement of Dr. Daigh follows:]
    Prepared Statement of John D. Daigh, Jr., M.D., CPA, Assistant 
    Inspector General, Office of Healthcare Inspections, Office of 
         Inspector General, U.S. Department of Veterans Affairs
    Mr. Chairman and Members of the Committee, Thank you for the 
opportunity to discuss the Office of Inspector General's (OIG) health 
care reviews and audits of programs and performance of the Veterans' 
Health Administration (VHA). I am accompanied by Gary Abe, Deputy 
Assistant Inspector General for Audits and Evaluations, Office of 
Inspector General.
    VHA is at risk of not performing its mission as the result of 
several intersecting factors. VHA has several missions, and too often 
management decisions compromise the most important mission of providing 
veterans with quality health care. Leadership has too often compromised 
national VHA standards to meet short term goals. The Veterans 
Integrated Service Networks (VISN) do not consistently support local VA 
medical centers (VAMC) to encourage success and proactively address 
areas of risk. Resource management data gaps make the cost-effective 
delivery of a national benefit challenging. VHA's internal processes 
are inefficient and make the conduct of routine business unnecessarily 
burdensome.
                 primary mission is quality health care
    VHA has many missions, the first of which should be the delivery of 
high quality health care. The first test of a management decision 
should be an assessment of its impact upon the delivery of quality 
health care. For example, veterans who receive their medical care 
through the VA need timely access to emergency care. The management of 
a possible myocardial infarction, stroke, or appendicitis requires not 
only a sophisticated emergency room and readily available imaging, but 
hospital specialty treatment rooms and dedicated teams to provide 
timely critical care. Many smaller hospitals cannot provide timely 
expert care for patients with these conditions. VHA's decision to 
operate an emergency room or urgent care center should have the quality 
delivery of this care as its most important standard. Arguments that 
veterans prefer to receive their care at VA or that this care creates 
contracting difficulties are secondary to the imperative that high 
quality care be provided. All medical care provided at each facility 
should be considered against this test.
      vha leaders must set high standards and support subordinates
    The many OIG reports on the Phoenix VA Health Care System and 
problems with the VA appointment system highlight the challenges 
leaders must overcome if quality health care is to be provided.
    Since May 28, 2014, we have issued four reports on the Phoenix VA 
Health Care System (PVAHCS).\1\ The initial two reports (May 2014 and 
August 2014) were the result of work by a multidisciplinary staff from 
the OIG's Office of Audits and Evaluations and Office of Healthcare 
Inspections. The OIG found patients at the PVAHCS experienced access 
barriers that adversely affected the quality of primary and specialty 
care provided for them. Patients frequently encountered obstacles when 
they or their providers attempted to establish care, when they needed 
outpatient appointments after hospitalizations or emergency department 
visits, and when seeking care while traveling or temporarily living in 
Phoenix. The problems in Phoenix were due to a failure by management to 
recognize the increased demands on the facility and to request and 
apply the resources to address those demands either through increased 
staffing or increased use of non-VA fee care.
---------------------------------------------------------------------------
    \1\ Healthcare Inspection--Radiology Scheduling and Other 
Administrative Issues, Phoenix VA Health Care System, Phoenix, Arizona, 
February 26, 2015; Interim Report--Review of Phoenix VA Health Care 
System's Urology Department, Phoenix, Arizona, January 28, 2015; Review 
of Alleged Patient Deaths, Patient Wait Times, and Scheduling Practices 
at the Phoenix VA Health Care System, August 26, 2014; Interim Report: 
Review of VHA's Patient Wait Times, Scheduling Practices, and Alleged 
Patient Deaths at the Phoenix Health Care System, May 28, 2014.
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    Also, senior headquarters and facility leadership were not held 
accountable for implementing action plans that addressed compliance 
with scheduling procedures. The use of inappropriate scheduling 
practices caused reported wait times to be unreliable. The 
underreporting of wait times resulted from many causes, to include the 
lack of available staff and appointments, increased patient demand for 
services, and an antiquated scheduling system. The ethical lapses 
within VHA and PVAHCS's senior leadership ranks and mid-level managers 
also contributed to the unreliability of reported access and wait time 
issues, which went unaddressed by those responsible.
    In our first two reports, we made 24 recommendations to VA to 
implement immediate and substantive changes to their policies and 
procedures. The VA Secretary concurred with all 24 recommendations and 
submitted acceptable corrective action plans. As of March 3, 2015, 18 
recommendations from these reports remain open. In response to our 
work, VA reported it took immediate action to ensure that 3,400 
veterans who we identified needed health care services received medical 
appointments. Our review identified that use of unofficial wait lists 
and manipulation of wait time data were pervasive practices in VA. As a 
result, VA reported it took immediate actions to reach out to over 
266,000 veterans to get them off wait lists and into clinics, made 
nearly 912,000 referrals to private health care providers for needed 
care, and scheduled approximately 200,000 new VA appointments 
nationwide for veterans. These reports brought much needed 
accountability over serious access issues, led to changes in the 
highest level of VA leadership, and enactment of the Veterans Access, 
Choice, and Accountability Act of 2014 (also known as The Choice Act), 
which expanded veterans' access to care outside the VA system and 
included a $16 billion increase in VA's funding.
    The most recent reports issued by the OIG's Office of Healthcare 
Inspections were the results of information received during the work 
conducted at the PVAHCS during the spring and summer of 2014. Our 
January 28, 2015, interim report on PVAHCS's Urology Services requires 
VA's immediate attention. It is also indicative of the challenges that 
VA faces in staffing and coordinating non-VA care. After experiencing a 
staffing shortage within the PVAHCS Urology Department, some patients 
were referred to non-VA urologists via voucher or fee basis 
authorization. In 23 percent of cases reviewed, we found approved 
authorizations for care, notations that authorizations were sent to 
contracted providers, and scheduled dates and times of appointment with 
non-VA urologists but no scanned documents verifying that patients were 
seen for evaluations and, if seen, what the evaluations might have 
revealed. This finding suggests that PVAHCS has no accurate data on the 
clinical status of the patients who were referred for urologic care 
outside of the facility.
           vha organizational entities must be more effective
    The current VISN structure has not worked effectively to support 
and solve problems facing hospitals. A VISN contains medical facilities 
of varying size and capability. For example, one requirement for all 
medical facilities is that their providers be properly credentialed and 
privileged. One aspect of privileging providers is the presentation of 
physician performance data to the hospital privileging committee. In a 
forthcoming report on solo physicians' professional practice 
evaluations, we found that in hospitals where there are specialty units 
with small numbers of providers, it is difficult to obtain unbiased 
peer reviews of clinical cases and appropriate assessments of clinical 
performance by peers. The VISN structure has been inconsistently 
effective in addressing this issue.
    Each VISN has a different internal organization and each medical 
facility has a different internal structure. This lack of 
standardization makes the dissemination of information and policy to 
facilities challenging and the acquisition of critical data from 
facilities more difficult. When we tested facility compliance with 
directives regarding the proper treatment of reusable medical 
equipment, we found significant non-compliance with initial policy 
statements.\2\ When we looked at VA data on compliance with 
instructions to address shortcomings in the consult management process, 
there was wide variance across the VISNs in compliance with 
instructions.\3\
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    \2\ Use and Reprocessing of Flexible Fiberoptic Endoscopes at VA 
Medical Facilities, June 16, 2009; Follow-Up Colonoscope Reprocessing 
at VA Medical Facilities, September 17, 2009.
    \3\ Healthcare Inspection--Evaluation of the Veterans Health 
Administration's National Consult Delay Review and Associated Fact 
Sheet, December 15, 2014.
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                          resource management
    VHA's budget and execution data across the system does not permit 
ready analysis at the Department or clinic level across VHA. The cost 
of providers and support staff is often a relevant cost in health care 
financial analysis. VHA does not have an adequate system to build the 
human requirements to provide health care appropriate for financial 
analysis. In recognition of this issue, Congress passed The Choice Act 
which requires the OIG for the next 5 years to report on the staffing 
needs of VHA and to audit the accuracy and timeliness of payments made 
under this law within 30 days after VHA has spent 75 percent of the 
$9.7 billion in funding authorized for patient care. Our first report 
was issued on January 30, 2015, in which we noted that the five 
occupations with the largest staffing shortages were Medical Officer, 
Nurse, Physician Assistant, Physical Therapist, and Psychologist.\4\ 
The data presented is VHA's ``wish'' list for talent, not a requirement 
driven list. The requirement for VHA to develop a staffing methodology 
is not new. OIG assessed whether VHA has an effective methodology for 
determining physician staffing levels for 33 of VHA's specialty care 
services.\5\ Audits and inspections continue to identify the need for 
VHA to improve its staffing methodology by implementing productivity 
standards. Public law mandates VA establish a nationwide policy to 
ensure medical facilities have adequate staff to provide appropriate, 
high-quality care and services. We found VHA did not have an effective 
staffing methodology to ensure appropriate staffing levels for 
specialty care services. Specifically, VHA did not establish 
productivity standards for all specialties and VA medical facility 
management did not develop staffing plans. This occurred because there 
is a lack of agreement within VHA on how to develop a methodology to 
measure productivity, and current VHA policy does not provide 
sufficient guidance on developing medical facility staffing plans. 
Other essential personnel in a hospital, to include pharmacists, 
dieticians, physical therapists, also do not have staffing standards.
---------------------------------------------------------------------------
    \4\ OIG Determination of Veterans Health Administration's 
Occupational Staffing Shortages, January 30, 2015.
    \5\ Audit of Physician Staffing Levels for Specialty Care Services, 
December 27, 2012.
---------------------------------------------------------------------------
    Each VISN and hospital has its own unique organizational chart. The 
combination of a lack of a robust capability to determine requirements 
and a lack of organizational standardization impedes the ability of 
managers to make effective financial decisions.
                  operational efficiency must improve
    A number of VHA's internal operations and systems, which should be 
seamless to providers, do not function well. The appointment system 
inefficiencies have contributed to wait time problems. Medical 
consultation software was permitted to devolve such that information 
within the system was not standard and in many cases not reliable. This 
has resulted in patients who were lost to appropriate colon cancer 
screening. The process of hiring a new employee is extremely cumbersome 
and is but one element of the human resources management program that 
must improve. The work-arounds and lost productivity attributed to 
these ``systems'' makes the delivery of quality care much more 
difficult.
      the veterans access, choice, and accountability act of 2014
    Implementation of the Veterans Access, Choice, and Accountability 
Act of 2014 is a considerable challenge for VA. In addition to 
coordinating care for patients outside the VA system, VA also has to 
ensure that payments are made timely and accurately and that results of 
medical appointments are shared between VA and non-VA providers. These 
issues have been problematic in the past for VA. The OIG has provided 
significant oversight of billing issues in the non-VA Fee Care program 
over the last several years.\6\
---------------------------------------------------------------------------
    \6\ Audit of Veterans Health Administration's Non-VA Outpatient Fee 
Care Program, August 3, 2009; Veterans Health Administration--Review of 
Outpatient Fee Payments at the VA Pacific Islands Health Care System, 
March 17, 2010; Review of Veterans Health Administration's Fraud 
Management for the Non-VA Fee Care Program, June 8, 2010; Audit of Non-
VA Inpatient Fee Care Program, August 18, 2010; Review of Alleged 
Mismanagement of Non-VA Fee Care Funds at the Phoenix VA Health Care 
System, November 8, 2011; Administrative Investigation, Improper 
Contracts, Conflict of Interest, Failure to Follow Policy, and Lack of 
Candor, Health Administration Center, Denver, Colorado, April 12, 2012; 
Review of Enterprise Technology Solutions, LLC, Compliance with 
Service-Disabled Veteran-Owned Small Business Program Subcontracting 
Limitations, August 20, 2012; Veterans Health Administration--Review of 
South Texas Veterans Health Care System's Management of Fee Care Funds, 
January 10, 2013.
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                              non-va care
    Non-VA medical care is care provided to eligible veterans outside 
of VA when VA facilities are not feasibly available. It consists of two 
major programs, Non-VA Care Inpatient and Outpatient programs and 
Patient-Centered Community Care (PC3).
    The OIG has continued to report that VHA faces significant 
challenges to address serious nationwide weaknesses in its Non-VA Care 
Inpatient and Outpatient programs. Total annual Non-VA Care Program 
disbursements have grown from about $4.4 billion in fiscal year (FY) 
2009 to about $5.6 billion in FY 2014.
    As early as 2009, we reported that VHA improperly paid 37 percent 
of outpatient fee claims resulting in $225 million in overpayments and 
$52 million in underpayments. We estimated $1.1 billion in overpayments 
and $260 million in underpayments over the next 5-year period if VHA 
did not strengthen its processes for authorizing fee care services. In 
FY 2010, we reported that VHA improperly paid 28 percent of inpatient 
fee claims resulting in net overpayments of $120 million and estimated 
$600 million in improper payments could be processed over the next 5-
year period.
    In response to our August 2010 audit of Non-VA Inpatient Fee Care 
Program, VHA agreed there will be general cost savings and efficiencies 
realized with consolidating the fee program's claims processing system 
to achieve better economies of scale. Although specific cost savings 
depend on the actual consolidated strategy VA selects and on how well 
VA implements the chosen strategy, we conservatively estimated that 
current program inefficiencies cost VHA about $26.8 million in FY 2009, 
and could cost about $134 million through FY 2015. Today, we do not see 
VHA moving forward with an actual consolidation strategy for payment 
processing in the fee care program.
    In September 2013, VA awarded Health Net Federal Services, LLC, and 
TriWest Healthcare Alliance Corporation PC3 contracts totaling $5 
billion and $4.4 billion, respectively. The expected life of the 
contracts is a base year plus 4 option years. VHA established the PC3 
contracts to provide veterans timely access to high-quality care from a 
comprehensive network of non-VA community providers.
    This week we plan to publish the first of five projects that are 
reviewing various aspects of VA's PC3 contract and the effectiveness of 
its implementation. All five focus on the operational risk areas that 
directly affect veterans' waiting times, access to services, and 
continuity of care. The remaining four projects are reviewing whether 
PC3 contracted care issues are causing delays in patient care; whether 
PC3 networks are providing adequate veteran access to care; whether PC3 
contractors are providing VHA with timely medical documentation; and 
the effectiveness of PC3 contract pricing. We plan to issue the 
remaining four reports in FY 2015.
    The report published this week was requested by the House 
Appropriations Committee to review VA's FY 2014 PC3 costs and VA's FY 
2014 budget submission that stated PC3 contracts would save $13 million 
in FY 2014. Our analysis of available PC3 data determined that 
inadequate price analysis, high up-front contract implementation fees, 
and low PC3 utilization rates impeded VA from achieving its $13 million 
PC3 cost saving estimate in FY 2014. VA paid the PC3 contractors 
approximately $18.9 million in FY 2014:

     $15.1 million (80 percent) for implementation and 
administrative fees
     $3.8 million (20 percent) for health care services

These same health care services would have cost about $4.0 million if 
they had been purchased under the non-VA care program. Thus, PC3 cost 
about $14.9 million more than if VA had used the non-VA care program to 
purchase the same health care services. This occurred because VA did 
not conduct adequate price analyses to support its cost-savings 
estimate. Further, VA lacked an implementation plan to ensure the 
utilization of PC3. Thus, VA could not ensure it achieved the estimated 
cost savings and recouped the fees paid to the PC3 contractors. VA 
simply assumed that the PC3 contractors would develop adequate provider 
networks; VA medical facilities would achieve the desired 25 to 50 
percent contract utilization rates; and the accrued PC3 cost savings 
for health care services would more than offset the contractors' fees. 
These flawed assumptions contributed to significant PC3 contract 
performance problems and a 9 percent utilization rate in FY 2014.
                   opioid management at va facilities
    Of increasing concern in VA and in the Nation is the use of opioids 
to treat chronic pain and other conditions. In May 2014, we issued a 
national review, Healthcare Inspections--VA Patterns of Dispensing 
Take-Home Opioids and Monitoring Patients on Opioid Therapy, that 
described some of the issues facing patients on high dosages of 
opioids. In addition to this national review, we have issued nine 
reports detailing opioid prescription issues within VA since 2011.\7\ 
Patients prescribed opioids frequently have complex co-morbid 
conditions, making them more likely to be given multiple medications 
that can interact dangerously with opioid medications even leading to 
death. These patients remain a high risk population.
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    \7\ Healthcare Inspections--Alleged Inappropriate Opioid 
Prescribing Practices Chillicothe VA Medical Center, Chillicothe, Ohio, 
December 9, 2014; Healthcare Inspections--Quality of Care and Staff 
Safety Concerns at the Huntsville Community Based Outpatient Clinic, 
Huntsville, Alabama, July 17, 2014; Healthcare Inspection--Medication 
Management Issues in a High Risk Patient Tuscaloosa VA Medical Center, 
Tuscaloosa, Alabama, June 25, 2014; Healthcare Inspection--Quality of 
Care Concerns Hospice/Palliative Care Program Western New York 
Healthcare System, Buffalo, New York, June 9, 2014; Healthcare 
Inspections--Alleged Improper Opioid Prescription Renewal Practices San 
Francisco VA Medical Center, San Francisco, California, November 7, 
2013; Healthcare Inspection--Management of Chronic Opioid Therapy at a 
VA Maine Healthcare System Community Based Outpatient Clinic, 
August 21, 2012; Healthcare Inspection--Alleged Improper Care and 
Prescribing Practices for a Veteran Tyler VA Primary Care Clinic, 
Tyler, Texas, August 19, 2011; Healthcare Inspection--Patient's 
Medication Management Lincoln Community Based Outpatient Clinic, 
Lincoln, Nebraska, August 10, 2012; Healthcare Inspection--Prescribing 
Practices in the Pain Management Clinic at John D. Dingell VA Medical 
Center, Detroit, Michigan, June 15, 2011.
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                         vha's homeless program
    In FY 2015 we reported that VHA missed 40,500 opportunities where 
the National Call Center for Homeless Vet Center either did not refer 
the homeless veterans' calls to medical facilities or it closed 
referrals without ensuring homeless veterans had received needed 
services from VA medical facilities. We assessed the effectiveness of 
VHA's National Call Center for homeless veterans in helping veterans 
obtain needed homeless services.\8\ The call center is VA's primary 
vehicle for communicating the availability of VA homeless programs and 
services to veterans and community providers. Our oversight identified 
serious problems in the Call Center's intake and referral processes 
that were seriously hampering the Call Center's effectiveness and 
services to homeless veterans. Of the approximately 51,500 referrals 
made in FY 2013, the Call Center provided no feedback or improvements 
to VAMCs to ensure the quality of the homeless services and closed 47 
percent of referrals even though the VA medical facilities had not 
provided the homeless veterans any support services.
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    \8\ Veterans Health Administration--Audit of the National Call 
Center for Homeless Veterans, December 3, 2014.
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                        va procurement practices
    We have continually reported in VA's Performance and Accountability 
Report the challenges VA faces in the area of procurement, to include 
planning, solicitation, negotiation, award, and administration. Many of 
our reports have identified weaknesses in procurement actions that did 
not provide assurance that VHA obtained fair and reasonable prices or 
that competition requirements were met.\9\ Today VHA still needs a 
modern inventory system. In FY 2012, we reported VHA needs to 
strengthen VAMC management of prosthetic supply inventories to avoid 
spending funds on excess supplies and to minimize risks related to 
supply shortages. VAMCs spent about $35.5 million to buy prosthetic 
supplies in excess of current needs. Also, VAMCs increased the risks of 
supply expiration and disruptions to patient care due to supply 
shortages.\10\ We recommended VHA implement a modern inventory system 
and strengthen management of prosthetic supply inventories. As an 
interim measure to address recommendation from our 2012 report, VHA 
implemented system patches while a new system is in development.
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    \9\ Audit of VHA's Support Service Contracts, November 19, 2014; 
Audit of VHA Acquisition and Management of Prosthetic Limbs, March 30, 
2012.
    \10\ Audit of VHA's Prosthetics Supply Inventory Management, 
March 30, 2012.
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    In FY 2012, the Office of Management and Budget stated Government 
spending for support service functions quadrupled over the past decade. 
Previous OIG audits identified recurring systemic deficiencies in 
virtually all phases of VHA's contracting processes. In our 
November 2014 audit report, we noted that VHA's support service 
contract costs increased 60 percent from approximately $503 million for 
about 5,100 contracts in FY 2012 to just over $805 million for about 
4,700 support service contracts in FY 2014. VHA did not have effective 
internal controls or follow existing controls to ensure adequate 
development, award, monitoring, and documentation of support service 
contracts. The contract deficiencies included insufficient 
documentation of key contract development and award decisions, 
assurance that paid invoice amounts were correct and funds were de-
obligated following the contract completion, and a complete history of 
contract actions in VA's mandatory Electronic Contract Management 
System.
    During FYs 2012 and 2013, we estimated VA made about 15,600 
potential unauthorized commitments valued at approximately $85.6 
million, which require ratification actions. Unauthorized commitments 
are agreements that are not binding solely because the Government 
representative who made them lacked the authority to enter into that 
agreement on behalf of the Government. Unauthorized commitments include 
commitments made by individuals who do not have valid warrants or 
exceed the limitations of their warrant authority. The significant 
number of unauthorized commitments we identified exemplifies persistent 
weaknesses in VA procurement practices and especially using purchase 
cards. Further, the practice of institutional ratifications does not 
hold individuals accountable for this serious offense.
                        va construction program
    In FY 2014, we issued a report on VA's management of several health 
care center leases that found that VA's process was not effective and 
did not fully account for expenditures.\11\ Among our recommendations 
was to establish adequate guidance for management of the procurement 
process of large-scale build-to-lease facilities and establish central 
cost tracking to ensure transparency and accurate reporting on health 
care center expenditures.
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    \11\ Review of VA's Management of Health Care Center Leases, 
October 22, 2013.
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    We also reviewed VHA's non-recurring maintenance program where 
expenditures increased from $824 million in FY 2008 to $1.8 billion in 
FY 2013.\12\ We reported that VHA did not have an adequate process to 
track how much of the over $1.8 billion in non-recurring maintenance 
funds medical facilities spent to address its nearly $10.7 billion 
facility maintenance backlog.
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    \12\ Audit of Non-Recurring Maintenance Program, May 7, 2014.
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    In FY 2013 we reported VHA did not adequately review individual 
projects to ensure proper use of minor construction funds.\13\ 
Specifically, VA medical facilities integrated design and construction 
work for 7 of 30 minor construction projects into 3 combined projects 
that exceeded the $10 million minor construction spending limit. This 
occurred because VHA did not effectively oversee project execution 
after funding was distributed to individual project accounts. As a 
result, VHA violated the Antideficiency Act by integrating design and 
construction work for five minor construction projects into two 
combined projects by exceeding the $10 million minor construction 
threshold. VHA would have likely committed a third Antideficiency Act 
violation if we had not identified two other minor construction 
projects that integrated design and construction work into a single 
contract solicitation, which VHA suspended while in the award process.
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    \13\ Review of Minor Construction Program, December 17, 2012.
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                   information technology management
    VA launched the Project Management Accountability System (PMAS) in 
June 2009. We followed-up to assess whether the Office of Information 
and Technology (OIT) took effective actions to address recommendations 
we made to strengthen PMAS in two prior audit reports.\14\ We reported 
in 2015 that OIT has taken steps to improve PMAS, but more than 5 years 
after its launch, OIT has not fully infused PMAS with the discipline 
and accountability necessary for effective oversight of IT development 
projects. Two OIT offices did not adequately perform planning and 
compliance reviews. The PMAS Business Office (PBO) still had Federal 
employee vacancies and the PMAS Dashboard lacked a complete audit trail 
of baseline data. Project managers continued to struggle with capturing 
increment costs and project teams were not reporting costs related to 
enhancements on the PMAS Dashboard.
---------------------------------------------------------------------------
    \14\ Follow-Up Audit of the Information Technology Project 
Management Accountability System, January 22, 2015; Audit of the 
Project Management and Accountability System Implementation, August 29, 
2011.
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    These conditions occurred because OIT did not provide adequate 
oversight to ensure our prior recommendations were sufficiently 
addressed and that controls were operating as intended. OIT also did 
not adequately define enhancements in the PMAS Guide. As a result, VA's 
portfolio of IT development projects was potentially being managed at 
an unnecessarily high risk.
    Since approximately 2000, VA has made a number of unsuccessful 
efforts to replace VHA's Veterans Health Information Systems and 
Technology Architecture. VA canceled the Replacement Scheduling 
Application (RSA) project.\15\ A March 2009 memo from the Under 
Secretary for Health to the Acting Assistant Secretary for Information 
and Technology stated that the RSA project had not developed a single 
scheduling capability it could provide to the field nor was there any 
expectation of delivering a capability in the near future. The memo 
also stated that after more than 5 years and a cost of more than $75 
million, the RSA failed to deliver a useable product because of 
ineffective planning and oversight.
---------------------------------------------------------------------------
    \15\ Review of the Award and Administration of Task Orders Issued 
by the Department of Veterans Affairs for the Replacement Scheduling 
Application Development Program, August 26, 2009
---------------------------------------------------------------------------
    We reported that because the RSA project lacked defined 
requirements, an information technology architecture, and a properly 
executed acquisition plan, RSA was at significant risk of failure from 
the start. We suggested that VA needed experienced personnel to plan 
and manage the development and implementation of complex information 
technology projects effectively. We also suggested that a system to 
monitor and identify problems affecting the progress of projects could 
support VA's leadership in making effective and timely decisions to 
either redirect or terminate troubled projects. Since the cancelation 
of the RSA project, VA has continued to seek solutions to replace its 
current scheduling system.
    In another OIG audit we assessed OIT's management of VHA's Pharmacy 
Reengineering program (PRE), and reported that OIT needed stronger 
accountability over cost, schedule, and scope.\16\ We also reviewed 
allegations that VHA's Chief Business Office (CBO) violated 
appropriations law by improperly obligating a total of $96 million of 
medical support and compliance funds to finance the development of the 
Health Care Claims Processing System (HCCPS).\17\ We substantiated that 
$92.5 million was improperly obligated, The CBO spent approximately 
$73.8 million and $18.7 million remains obligated. Medical support and 
care appropriations are only authorized for administering medical, 
construction, supply, and research activities. By using MS&C 
appropriations, VHA avoided competing with other VA projects for IT 
appropriations.
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    \16\ Audit of Pharmacy Reengineering Software Development Project, 
December 23, 2013.
    \17\ Review of Alleged Misuse of VA Funds To Develop the Health 
Care Claims Processing System, March 2, 2015.
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                    information technology security
    In May 2014, we published our annual assessment of VA compliance 
with the Federal Information Security Management Act (FISMA) and 
applicable National Institute of Standards and Technology 
guidelines.\18\ We contracted with the independent accounting firm 
CliftonLarsonAllen LLP to perform this audit. We found that VA had made 
progress developing policies and procedures but still faced challenges 
implementing components of its agency-wide information security risk 
management program to meet FISMA requirements. While some improvements 
were noted, FISMA audits continued to identify significant deficiencies 
related to access controls, configuration management controls, 
continuous monitoring controls, and service continuity practices 
designed to protect mission-critical systems.
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    \18\ VA's Federal Information Security Management Act Audit for 
Fiscal Year 2013, May 29, 2014.
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    Weaknesses in access and configuration management controls resulted 
from VA not fully implementing security control standards on all 
servers and network devices. VA has not effectively implemented 
procedures to identify and remediate system security vulnerabilities on 
network devices, database and server platforms, and Web applications 
VA-wide. Further, VA has not remediated approximately 6,000 outstanding 
system security risks in its corresponding Plans of Action and 
Milestones to improve its overall information security posture.
    As a result of the FY 2014 consolidated financial statement audit, 
CliftonLarsonAllen LLP concluded a material weakness still exists in 
VA's information security program. We recommended the Executive in 
Charge for Information and Technology implement comprehensive measures 
to mitigate security vulnerabilities affecting VA's mission-critical 
systems. We plan to issue the FY 2014 FISMA audit results shortly.
                           criminal activity
    Threats and Assaults--Since October 1, 2013, we conducted more than 
1,000 preliminary inquiries and full investigations relating to threats 
made against or by VA employees and against facilities resulting in 44 
arrests and/or involuntary commitments. Although most threat-related 
investigations do not result in judicial action, we take all threats 
seriously. We also conducted 17 assault investigations resulting in 24 
arrests, and 9 sexual assault investigations resulting in 4 arrests. 
These investigations involved veterans assaulting VA employees and 
other veterans, as well as VA employees assaulting veterans and other 
VA employees. In one investigation, a veteran was sentenced to 2 years' 
incarceration after pleading guilty to threatening to kill Atlanta, 
Georgia, VAMC medical staff by going to his residence to get a weapon, 
return, and shoot them in the head if he was not granted a 100 percent 
disability pension rating. The veteran left the VAMC and before he 
could return he became engaged in a shootout with local police at his 
residence after the officers responded to a domestic disturbance call.
    Drug Diversion--Since October 1, 2013, we have arrested 184 
individuals who diverted and/or sold controlled and non-controlled 
substances from and at VA facilities. Among them were VA health care 
providers who stole pain medications intended for specific patients and 
consumed them while on-duty and delivering patient care; patients who 
sold their prescribed drugs to other VA patients; individuals who sold 
contraband drugs such as heroin at VA facilities; and employees of 
delivery services, including the U.S. Postal Service, who stole 
prescription drugs intended for VA patients. As a result of one such 
investigation, a Long Beach, California, VAMC pharmacist, three 
pharmacy technicians, and a distribution supervisor pled guilty to 
stealing more than 16,000 tablets of prescription medications.
    Identity Theft, Procurement Fraud, and Improper Payments--We have 
recently added headquarters staff to focus our national efforts to 
combat identity theft, procurement fraud, and improper payments 
resulting from criminal conspiracy. During this time period, we 
arrested 16 individuals who stole veterans' personally identifiable 
information (PII) for a variety of criminal schemes, but primarily to 
facilitate Federal income tax refund fraud exceeding $6 million. In one 
investigation, a former VAMC clerk and a VA volunteer were sentenced to 
72 months' and 48 months' respectively for exchanging VA patients' PII 
for money and illicit drugs.
    As a result of an OIG investigation, 14 individuals were prosecuted 
on bribery charges, including an engineer at the East Orange, New 
Jersey, VAMC who was convicted of conspiring with a contractor to 
defraud VA of more than $6 million. In another investigation, a former 
VA contracting officer in Palo Alto, California, VAMC, was convicted 
for accepting more than $100,000 in cash, vacations, and other items of 
value in exchange for her influence in awarding contracts. To date, 
this investigation has resulted in criminal charges against two other 
VA employees and one contractor. In a third investigation, we convicted 
the former Director of the Cleveland, Ohio, and Dayton, Ohio, VAMCs on 
64 corruption-related charges related to the sale of confidential 
information about VA contracts and projects to multiple contractors; 
one of the contractors used the inside information to obtain an 
advantage in securing a contract valued at approximately $20 million.
    We have recently initiated efforts to identify and thwart national 
criminal schemes to redirect VA benefits by defrauding the multi-agency 
eBenefits system, as well as to detect billing fraud in non-VA fee care 
and overseas medical care programs. One of our investigations, resulted 
in the conviction of a Department of Defense employee living in Germany 
for defrauding VA and the Office of Personnel Management of more than 
$2.2 million in medical reimbursements, which exposed considerable 
vulnerabilities in VA's overseas medical care program.
    Eligibility Fraud in Service-Disabled Veteran-Owned Small Business 
(SDVOSB) Program--We continue to aggressively pursue allegations of 
eligibility fraud involving companies and individuals taking advantage 
of set-aside contracting in VA's SDVOSB program supporting VHA 
healthcare delivery requirements. To date, our investigations have 
resulted in the indictment of 45 individuals and 5 companies. 
Defendants have been sentenced to a cumulative total of imprisonment 
exceeding 26 years and fines and restitution exceeding $14 million. 
Sixty individuals and companies deemed culpable of committing this type 
of fraud have been referred to VA for suspension and debarment action 
to exclude them from receiving future contracts.
    Beneficiary Travel Fraud--We have worked closely with VA to 
identify, investigate, prosecute, and deter fraud associated with VA's 
beneficiary travel reimbursement program, whose expenditures approached 
$797 million in FY 2014. We believe our efforts with VA to enhance VA's 
data mining efforts and develop more effective warning posters to be 
placed where veterans submit claims for these beneficiary travel 
benefits, coupled with increased media attention resulting from DOJ 
press releases, have played a significant role in deterring such crime. 
VA reports expending nearly $43 million fewer dollars in this program 
in FY 2014 than in FY 2012.
                               conclusion
    The issues confronting VHA are issues that the OIG has long 
reported as serious and in need of attention at the VA Central Office, 
at the Veteran Integrated Service Network, and at the facility levels. 
The rededication by senior leadership and renewed commitment by 
employees to meet the expectations of veterans and the Nation is a step 
in the right direction. The OIG will continue to report on these issues 
until we see that change has occurred and that it is not just a 
temporary adjustment.

    Mr. Chairman and Members of the Committee, Mr. Abe and I will be 
pleased to answer your questions.

    Chairman Isakson. Thank you, Dr. Daigh.
    Dr. Clancy.

 STATEMENT OF CAROLYN M. CLANCY, M.D., INTERIM UNDER SECRETARY 
FOR HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF 
 VETERANS AFFAIRS; ACCOMPANIED BY STEPHEN W. WARREN, EXECUTIVE 
IN CHARGE AND CHIEF INFORMATION OFFICER, OFFICE OF INFORMATION 
                           TECHNOLOGY

    Dr. Clancy. Good afternoon, Chairman Isakson, Ranking 
Member Blumenthal, and Members of the Committee. Thank you for 
the opportunity to participate in this hearing and discuss 
VHA's inclusion on the GAO's 2015 High-Risk Series Report. I am 
accompanied by Mr. Stephen Warren, the Department's Chief 
Information Officer.
    The Secretary and I, along with all of our senior 
leadership, are strongly committed to developing long-term 
solutions that mitigate risks to the timeliness, cost 
effectiveness, quality, and safety of the VA health care 
system. In 2014, we established a Blueprint for Excellence, a 
detailed road map for the evolution of health services provided 
by VHA. It provides guidance for the alignment of resources to 
transform VA health services from being provider-centric to 
veteran-centric and begins to offer a pathway for addressing 
GAO's five high-risk areas.
    VHA has the capacity to address the problems GAO clearly 
identified in the report. I have directed all senior leaders in 
VHA to identify resource needs in their areas of control to 
ensure that our strategic plans support resolution of GAO's 
high-risk areas. Our budget cycle is built to fund the actions 
necessary to support these strategic goals.
    In the coming months, we will be refining our corrective 
actions plans for each high-risk area and will be using input 
from the GAO, the Inspector General, and our other advisory 
groups to identify root causes and develop critical actions.
    With regard to national policies and processes, VHA is 
integrating our policy and operations together, our leaders 
together across major business lines, such as primary care, 
surgical care, mental health, and so forth, so that policy and 
implementation are much more closely linked. Importantly, 
health care is a pretty dynamic enterprise, so our policies 
have to be flexible enough to accommodate evolving standards 
for clinical care as well as requisite clinical judgment. We 
will continue to improve our processes and their implementation 
to address GAO and IG findings and ensure we provide timely, 
high-quality care to all veterans.
    With respect to oversight and accountability, we recently 
restructured the Office of the Medical Inspector into an 
integral element of our oversight and compliance programs and 
that office's policies and procedures were revised to place a 
higher premium on quality and safety. Now, the Medical 
Inspector reports directly to the Under Secretary for Health, 
and this is a first foundational block in our developing a 
robust internal audit process.
    Concerning information technology, we are modernizing VA's 
Electronic Health Record, which is the most widely used 
electronic health record in this country. We are developing a 
new web-based enterprise health management platform which will 
allow us to continue to share data on millions of 
servicemembers and veterans, both with the Department of 
Defense as well as community partners.
    Human capital training is critical to ensure veterans 
receive safe care, and our front-line providers need to have 
effective training on national policies and procedures. The 
bottom line is, our training has to empower employees and make 
it easy for every employee to do the right thing every time.
    Concerning resource needs and allocation priorities, we are 
implementing an enterprise-wide planning, programming, budget, 
and execution program to make sure that planning and 
prioritization are tightly linked with budget and execution. 
That has not been the case, I would have to say. This approach 
does include training in human capital requirements.
    Monitoring of corrective action plans and progress will be 
reported on a regular basis. As we implement corrective 
measures, we will be providing GAO with documentation of our 
progress and we will be seeking input from the GAO and the 
Office of the Inspector General to ensure that our actions are 
meeting the intent of their recommendations. We are committed 
to long-term durable solutions and sustained improvement in the 
high-risk areas.
    By way of positive news, from the first quarter of fiscal 
year 2014 to the first quarter of fiscal year 2015, 71 percent 
of our facilities have made meaningful improvement as judged by 
our comprehensive system of measures, which is called SAIL. I 
look forward to showing you other improvements we have made.
    In addition to the five high-risk areas, GAO's report 
mentioned that VA has many recommendations that have yet to be 
fully resolved, and VHA and GAO have established a new process 
to enhance our collaboration for reviewing open recommendations 
and documentation that GAO needs to assess those completed 
actions.
    In conclusion, I want to say that the review and assessment 
of our programs is something that we welcome as part of our 
commitment to providing the best health care to veterans. VHA 
must operate with accountability, with integrity, reliability, 
and transparency to earn and maintain the trust of veterans, 
stewards of the system, and the public. We need to build for 
success but at the same time be ever vigilant for weaknesses, 
failure, and opportunities to eliminate waste. We look forward 
to building a better and stronger system for our Nation's 
veterans and demonstrating substantial progress in the five 
high-risk areas. This transformation we are undertaking 
represents probably the greatest enhancement in health care for 
veterans that will be made in a generation and we are taking 
this very seriously.
    This concludes my testimony. We would be happy to answer 
your questions.
    [The prepared statement of Dr. Clancy follows:]
 Prepared Statement of Dr. Carolyn M. Clancy, Interim Under Secretary 
for Health, Veterans Health Administration, U.S. Department of Veterans 
                                Affairs
    Good afternoon, Chairman Isakson, Ranking Member Blumenthal, and 
Members of the Committee. Thank you for the opportunity to participate 
in this hearing and to discuss the Veterans Health Administration's 
(VHA) inclusion on the Government Accountability Office's (GAO) 2015 
High Risk Series report. I am accompanied today by Stephen Warren, 
Executive in Charge for the Office of Information Technology and Chief 
Information Officer for the Department of Veterans Affairs (VA).
    We welcome VHA's inclusion in the 2015 High Risk Series report. The 
report comes at a critical time for VHA and highlights issues that are 
important to Veterans and the public. In many ways, VHA is on the 
cutting-edge of the health care industry. We recognize that we need to 
make significant improvements. VA recently implemented important 
changes to remedy many of the issues and concerns identified by GAO. In 
September 2014, VA began the MyVA initiative, which focuses VA's 
efforts to view customer service from a Veteran's perspective. With 
this initiative, VHA's future goals are to ensure that:

    1. Veterans have a clear understanding of VA and where to go for 
what they need within any of VHA's facilities;
    2. VA employees are empowered with the authority, knowledge, and 
tools they need to solve problems and take action, and;
    3. The products and services that VHA delivers to Veterans are 
integrated within the organization.

    VA will continue to identify and rectify issues within our 
Department. We respect GAO's work and take their recommendations 
regarding VA programs and policies very seriously. Therefore, we share 
GAO's goal of ensuring Veterans are provided with the high quality 
health care they have earned and deserve.
    GAO categorized its concerns about VA's ability to ensure the 
timeliness, cost-effectiveness, quality, and safety of the health care 
the department provides into five broad areas: (1) policies and 
processes: (2) oversight and accountability: (3) information 
technology: (4) training for VA staff; and (5) resource needs and 
allocation priorities. VHA is taking the following steps to address 
these high risk areas GAO has identified.
Policies and Processes
    VHA has subject matter experts in all program areas responsible for 
developing and maintaining national policies. The subjects of these 
national policies can range from something as extremely complex as 
organ procurement for transplants, to something as fundamental as the 
handbook on employee uniforms. Before VHA issues a national policy, the 
policy undergoes thorough review and approval to ensure it is compliant 
with law and regulation. During policy development, subject matter 
experts obtain input from relevant VA stakeholders. All national 
policies undergo labor and management review. In addition, all policies 
undergo an extensive concurrence process before they are published for 
national implementation.
    Importantly, health care is a dynamic industry, and our policies 
must be flexible enough to accommodate evolving standards for clinical 
care. In addition, VHA policies strive to accommodate clinical care 
standards that can vary across the country. We will continue to improve 
our processes and implementation of policies to address the GAO and 
Office of the Inspector General (OIG) findings.
Oversight and Accountability
    The Office of the Medical Inspector (OMI) is an integral element of 
VHA's oversight and compliance program. Responsible for assessing the 
quality of VA health care through site-specific investigations and 
system-wide assessments, OMI reports directly to the Under Secretary 
for Health. OMI's policies and procedures were restructured in 2014 to 
ensure that health care quality and patient safety remain a primary and 
constant focus.
    OMI exercises its traditional oversight role by investigating 
concerns about the quality of health care that VHA provides to 
Veterans. These concerns may come to our attention via VHA's internal 
monitoring of activities, complaints from individual Veterans, issues 
raised by Members of Congress, or whistleblower allegations referred by 
the Office of Special Counsel (OSC). In carrying out these 
investigations, OMI conducts record reviews, site visits, interviews, 
and surveys. In each instance, OMI produces comprehensive reports 
containing recommendations for quality improvements to VA medical 
centers, Veterans Integrated Service Networks (VISN), and VHA Program 
Offices, and then works with them to ensure that corrective actions are 
completed. OMI's analyses have changed local and national health care 
policy and procedures.
    OMI meets monthly with the Assistant Inspector General, Office of 
Health Care Inspections, to review cases and health care issues that 
each are addressing to share information about ongoing and planned 
inspections, and to avoid duplication of effort. In addition, OMI meets 
regularly with OSC to review the status of whistleblower 
investigations, and to discuss schedules for reports and other 
deliverables. These meetings have improved communication between OSC 
and VA on investigative findings, ensuring complaints are thoroughly 
examined and that whistleblowers receive the protections they are 
entitled to under the law.
    As part of VHA's ``Blueprint for Excellence,'' OMI is expanding 
beyond its traditional investigative functions to create an internal 
audit capability within VHA, based on the core elements of risk 
assessment, testing of critical control measures, and for-cause 
investigation. The information and data gathered through audit and 
assessment activities helps VHA to better identify system 
vulnerabilities and manage risks across VHA.
    Last summer, VA established the Office of Accountability Review 
(OAR) to ensure that appropriate leadership accountability actions are 
taken when facility leaders are implicated in findings by the OIG, OMI, 
or other oversight bodies. OAR reports directly to the Secretary and 
thus functions independently of VHA.
    VHA also has other offices that have roles in VHA's integrity, 
oversight, and compliance activities. Taken collectively, these 
activities help ensure integrity and accountability across VA's health 
care system. The improved cooperation we are fostering will help 
overcome some of VHA's current challenges in providing effective health 
care oversight, and support efforts to restore Veterans' and the 
public's trust.
Information Technology
    VHA runs the largest health care system in the country; delivering 
the quality care Veterans deserve is not possible without innovative 
information technology and data sharing. VA's Electronic Health Record 
(EHR), VistA,\1\ is the most widely used EHR in the United States, and 
VA is working rapidly to modernize it. VA is developing a new web 
application and services platform called the Enterprise Health 
Management Platform (eHMP). eHMP is the VistA application clinicians 
will use during their clinical interactions with Veterans. eHMP brings 
exciting new features to the clinician, including Google-like search 
capabilities and information buttons that help clinicians find needed 
information much faster than current systems. VA is already piloting 
eHMP, and expects to deploy it to 30 sites by the end of the calendar 
year, with full rollout--including regular updates--over the next three 
years.
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    \1\ Veterans Health Information Systems and Technology Architecture
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    VA continues to work with the Department of Defense (DOD) on health 
data interoperability, but it is important to note that the two 
Departments already share health care data on millions of 
Servicemembers and Veterans. In fact, the two Departments share more 
health data than any other health care entities in the Nation. In 
addition to sharing health care data, VA and DOD have also paved the 
way for standardizing health care data, so that regardless of what 
system a clinician uses, the data is available in the right place and 
in the right way; for example, Tylenol and acetaminophen appear in the 
same place in the record because the system understands, through our 
data standardization, that they are the same medication. Today, VA and 
DOD clinicians can use the Joint Legacy Viewer (JLV) to see VA and DOD 
data on a single screen in a Servicemember or Veteran's record. 
Eventually, eHMP will replace JLV and will allow clinicians to see VA, 
DOD, and third-party provider data in their regular clinical care tool.
Training for VA Staff
    VHA understands that training is a critical element of development 
and we are committed to offering innovative training that utilizes 
clinical simulation, medical modeling, and other emerging technologies 
for our clinical, administrative and technical staff. VHA's Employee 
Education System holds 13 national and two state system-wide 
accreditations supporting VHA's clinical/professional continuing 
education requirements. With its interagency shared training, VHA 
continues to expand capacity by leveraging learning content offered 
through other Federal agencies. VHA is also partnering with the VA 
Learning University to improve our training materials and 
methodologies. Our priority is to continue to assess target audience 
satisfaction, appropriate content level, and various methods of 
delivery to improve training outcomes.
Resource Needs and Allocation Priorities
    In order to meet the VA's health care mission most effectively, VHA 
must share a customer service perspective that places Veterans' needs--
and VHA's ability to meet those needs--as paramount. Staff offices must 
leverage all possible authorities and streamline processes to promote 
agility compared with the efficiency of the best private sector health 
systems. VA and VHA are moving forward with implementing a planning, 
programming, budget and execution program that will ensure our medical 
care planning and prioritization drives the budget request and 
execution.
                               conclusion
    Mr. Chairman, VA welcomes the review and assessment of its programs 
as part of its commitment to providing the best health care to 
Veterans. We look forward to building a better and stronger Federal 
agency for our Nation's Veterans. This concludes my testimony. My 
colleague and I are prepared to answer any questions you or other 
Members of the Committee may have.

    Chairman Isakson. Thank you, Dr. Clancy.
    Mr. Warren, did you have any comments you wanted to make?
    Mr. Warren. No, sir, I am here just in a supportive role.
    Chairman Isakson. Just in case she needs some help?
    Mr. Warren. Yes, sir.
    Chairman Isakson. I think she will probably do fine.
    Dr. Clancy, did you read Dr. Daigh's report?
    Dr. Clancy. I did, yes.
    Chairman Isakson. Dr. Daigh, I want to compliment you on 
your testimony.
    Dr. Daigh. Thank you, sir.
    Chairman Isakson. On page 5--I want Dr. Clancy to listen to 
this very closely--as early as 2009, we were--``we'' being Dr. 
Daigh's office--reported that VHA improperly paid 37 percent of 
outpatient fee claims, resulting in $225 million in 
overpayments and $52 million in underpayments. We estimate that 
$1.1 billion in overpayments and $260 million in underpayments 
over the next 5 years if VA does not change their policy. Is 
that correct, Dr. Daigh?
    Dr. Daigh. Yes, sir.
    Chairman Isakson. Dr. Clancy, this last Friday, on a day 
off, I was joined by the Ranking Member Richard Blumenthal, 
some of the Colorado delegation, and some House members. We 
went to Denver, CO, where the hospital being built in Denver 
for the veterans is 427.5 percent over budget. The planning 
started in 2004 and is about 50 percent finished. It is just 
ironic to me that if the 2009 recommendations to the VHA by Dr. 
Daigh's office had been followed and resulted, we would save 
$1.1 billion over 5 years. That is exactly the amount of cost 
overrun in the hospital in Denver.
    The point I want to make is this. The High-Risk List is 
important because it demonstrates to you where you have got a 
high risk for failure or problems in your system. VA is bereft, 
to me, of any response mechanism within it to respond to crises 
other than kicking the ball down the field.
    Dr. Daigh's recommendations were clear and succinct. VA's 
problems are clear and succinct. It would seem to me if I had a 
$1.1 billion cost overrun in Denver and I had a $1.1 billion 
recommendation that I could save over 5 years by just changing 
my policy in fee-based care, that I would follow. Why do you 
think nothing was done over that 5-year period of time with 
non-VA care?
    Dr. Clancy. I think what has happened historically, and Dr. 
Daigh, I think, has been consistently very clear about this, is 
that every single one of our facilities was doing the non-VA 
care on their own, and as you know, we have now got multiple 
pathways for helping veterans to get care in the community, and 
moreover, every year, we were doing a higher and higher volume.
    We have an internal Compliance and Business Integrity Unit. 
These are certified auditors that help with some of this. I 
think there were so many different approaches that there were 
not sufficient eyes on making sure that it was done 
consistently and reliably. Those processes have been 
consolidated as a result of the new law into one central 
business office, and I am going to be honest and say that we 
need a lot of work to get this right.
    I have all my senior leaders in D.C. this week so that they 
have got a very, very clear idea of what needs to happen, and 
it has got to happen consistently at every facility. There is 
no excuse for that.
    Chairman Isakson. Dr. Daigh, following up on the non-VA 
care, and I read your testimony, did you make specific 
recommendations as to what VHA needed to do to correct the 
problem?
    Dr. Daigh. I will ask Mr. Abe to answer that.
    Chairman Isakson. That is fine.
    Mr. Abe. Yes, we did----
    Chairman Isakson. Before you go any further, did you ever 
get a response after you made those recommendations from VA?
    Mr. Abe. Yes. Yes, we did.
    Chairman Isakson. And that response was, this is the way we 
have always done it?
    Mr. Abe. Not quite, but----
    Chairman Isakson. Almost.
    Mr. Abe. But, we did make recommendations that, the biggest 
problem has to do with how they are organized in regards to 
that for every medical facility at the time, they are doing 
their own fee basis claims processing. When you try to 
establish policies and procedures and make sure all 150 
facilities understand that, it is very difficult.
    When they process claims, we found, like you say, many 
improper payments, and a lot of it just had to do with the 
understanding of the Medicare rate or the rates that they are 
being billed and what rates they should be paying.
    One of our recommendations that has been implemented and, I 
think, is a good first start is that the major thing that we 
asked is that they get closer to Medicare rates. By 
legislation, they had to ask that they could use Medicare 
rates. So far, I would say about 80 percent, 90 percent of the 
procedures, the services that they are providing from non-VA 
care is Medicare rates, which makes it a lot easier for them to 
process, although they still have a lot of problems.
    Since 2009, when we did that first audit, VA put themselves 
on the Improper Payments Act through their Performance and 
Accounting Report, and ever since 2009, they have--that 
program, being the non-VA care, has been on the Improper 
Payments List, under par. The inaccuracies have improved, but 
they are still making a lot of improper payments.
    Chairman Isakson. I thought that was a crystal clear 
example of why being put on this list can have a solution that 
can end up benefiting the VA and solving another problem, but 
my time is up. We are going to do a second round of questions 
because I want to follow up on this.
    Ranking Member Blumenthal.
    Senator Blumenthal. Thanks, Mr. Chairman. Thank you all for 
being here. I thank each of you for your service in the ways 
that you have provided invaluable help to this Committee, to 
veterans, and to the VA.
    Let me begin with Dr. Draper. Your testimony is that more 
than 100 recommendations from the GAO have not been 
implemented, is that correct?
    Ms. Draper. That is correct.
    Senator Blumenthal. Some of those recommendations have to 
do with accountability, do they not?
    Ms. Draper. That is correct.
    Senator Blumenthal. Some have to do with training?
    Ms. Draper. Mm-hmm.
    Senator Blumenthal. These recommendations that have not 
been implemented with respect to training have real life 
consequences, do they not?
    Ms. Draper. Well, many of our recommendations, whether they 
are training or for oversight and accountability, have some 
real life consequences.
    Senator Blumenthal. For example, I noted that in your May 
2011 report, you found that training of staff responsible for 
cleaning and reprocessing reusable medical equipment, such as 
endoscopes and some surgical instruments, was lacking. The 
failure to properly clean and reprocess these kinds of 
instruments can cause very severe infections, can they not?
    Ms. Draper. That is correct.
    Senator Blumenthal. In fact, one of the major problems in 
health care in America today is infections that occur within 
hospitals, is that correct?
    Ms. Draper. That is correct.
    Senator Blumenthal. Yet, the VA has failed to implement a 
number of recommendations having to do with that basic training 
requirement, correct?
    Ms. Draper. That is correct, and there have been incidents 
in some VA facilities where that has been a problem.
    Senator Blumenthal. In terms of accountability and 
oversight, has the VA exercised sufficient discipline, taken 
sufficient measures to hold accountable individuals that fail 
to act properly?
    Ms. Draper. One of the things we talk about and one of the 
areas of putting VHA on the High-Risk List relates to oversight 
and accountability. We found several concerns there. One was 
that VA tends to rely on facility self-reported data. There is 
no validation of that data and it is often incomplete or 
inaccurate. We will go into the facilities and find something 
totally different.
    They do not always audit or provide oversight activities 
for making sure that facilities are in compliance with 
particular requirements. It is not a very rigorous oversight 
and accountability process.
    Senator Blumenthal. Has that improved?
    Ms. Draper. We are still seeing some of the same things.
    Senator Blumenthal. In answer to my question, the oversight 
accountability process within the VA is still extremely 
lacking?
    Ms. Draper. We have not seen improvements to the 
recommendations we made related to those categories, a lot of 
those recommendations still remain open.
    Senator Blumenthal. Those kinds of failures have real life 
consequences, too, do they not?
    Ms. Draper. They do. I can give you a perfect example. When 
we found the oversight and accountability related to outpatient 
appointment scheduling you hear this a lot. You see in one VA 
facility, the way the processes and policies play out at the 
local level, and there is so much variation from each of the 
many VA facilities. In that particular instance, we found 
facilities documenting their outpatient appointment times very 
differently, so the wait times data are unreliable. You cannot 
really provide oversight on something that is unreliable.
    Senator Blumenthal. You cannot hold accountable people for 
failing to meet schedules if the scheduling data is unreliable.
    Ms. Draper. Another thing, the information technology 
system, the appointments scheduling system, it is prone to user 
error. If someone wanted to go in and manipulate the data, it 
would not be hard to do.
    Senator Blumenthal. I am going to come back. Thank you for 
your answers. On the second round, I hope I will be able to 
come back to you.
    Dr. Daigh, I have read the Veterans Health Administration 
VA Office of Inspector General review of alleged patient 
deaths, et cetera, in the Phoenix Health Care System. It is 
dated August 26, 2014. Your office prepared it, did they not?
    Dr. Daigh. That is correct, yes.
    Senator Blumenthal. Is that your final report on Phoenix?
    Dr. Daigh. There is one aspect of Phoenix that we have not 
reported on and that is the urology care there. We issued an 
interim report on that. Shortly, we will be able to publish a 
urology care piece.
    Senator Blumenthal. That is dated January 28, 2015?
    Dr. Daigh. That sounds right, sir.
    Senator Blumenthal. I am going to ask that they be made 
part of the record.
    [The information referred to follows:]
    Response to Request Arising During the Hearing by Hon. Richard 
  Blumenthal to John D. Daigh, Jr., M.D., C.P.A., Assistant Inspector 
General, Office of Healthcare Inspections, Office of Inspector General, 
                  U.S. Department of Veterans Affairs

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman Isakson. Without objection.
    Senator Blumenthal. Thank you.
    Have you finished your oversight and investigation of other 
facilities around the country? There are, I think, 93 of them 
that exhibited similar deficiencies; is that correct?
    Dr. Daigh. If you are speaking, sir, of the scheduling 
issue that the Office of Investigations was undertaking, I 
believe that they are still in the process of working with 
Assistant United States Attorneys (AUSAs) around the country, 
where appropriate, to process that and----
    Senator Blumenthal. Did you find prosecutable offenses in 
the Phoenix report?
    Dr. Daigh. I am not from the Office of Investigations. If 
you can ask that question for the record, we can respond, or I 
am sure we would be willing to come up and brief you on that.
    Senator Blumenthal. If you could, I would appreciate it, 
both on the record and in a briefing.
    Dr. Daigh. Yes, sir.
    Senator Blumenthal. Did your report lead to disciplinary 
action against individuals?
    Dr. Daigh. I believe that VA has taken disciplinary action 
against a number of individuals. Sir, I mostly focused on the 
health care issues that are involved in Phoenix. When you get 
to the actual discipline of the leadership or you get to the 
actual criminal nature of it, that turns out to be an Office of 
Investigations feature, so I would need to talk with them or--
--
    Senator Blumenthal. I will be submitting questions for the 
record that I hope the VA will provide responses in addressing 
to this Committee.
    Thank you, Mr. Chairman.
    Chairman Isakson. Senator Hirono.

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

    Senator Hirono. I thought you were going to go to one of 
the gentlemen.
    Chairman Isakson. Ladies first.
    Senator Hirono. Oh, thank you. [Laughter.]
    Thank you very much.
    There are 100 or so recommendations that have not been 
implemented, so this is for Dr. Clancy. Have you all 
prioritized the recommendations as to which ones you would want 
to tackle first?
    Dr. Clancy. Yes. I think there was a suggestion or 
inference made that we are ignoring them and I really would 
like to state for the record that we are not ignoring them.
    Senator Hirono. Yes.
    Dr. Clancy. I do not know if that has been that way in the 
past. I can only say what we are doing right now.
    Some of the recommendations that are very, very thoughtful 
reflect systemic improvements we would need to make to make 
durable changes, which is why, frankly, many of these, or most 
of these recommendations are so valuable to us, but they do 
take time to implement.
    Senator Hirono. Yes, I understand that. My question was, 
again, of these 100 recommendations, have you established 
priorities or----
    Dr. Clancy. Yes, we have.
    Senator Hirono. What were the factors that went into 
establishing those priorities? Let us say, of the 100 
recommendations, what would your top ten priorities be and what 
were the factors that led to those being the top ten?
    Dr. Clancy. These are prioritized by how quickly can the 
problem be fixed and what are the highest risks to patients, 
and then coming after that are things that are also important 
but take time to implement across a very large health care 
system.
    Senator Hirono. Is that list of priorities something you 
can share with the Committee?
    Dr. Clancy. We can get you that for the record, yes.
    Senator Hirono. Getting back to the Chairman's question, 
though, with regard to the testimony that he referred to where 
there are these huge overpayments as well as underpayments, 
that sounds like something that should be addressed pretty 
fast.
    Dr. Clancy. That is something that we have been working on 
for a while, and the consolidation of our payments for care in 
the community that came about as a result of this law has made 
this visible in a far more transparent way and we are working 
through those business processes right now. Some of this has to 
do with the fact that individual facilities, as Dr. Daigh 
noted, were doing it their own way.
    Senator Hirono. Yes.
    Dr. Clancy. We have found, for example, that some 
facilities actually do not know how to estimate or how to use 
the tools that have been provided to estimate what a test or 
appointment or service in the community is likely to cost, and 
we are right in the midst of working through that right now.
    Senator Hirono. So, clarifying your processes so that all 
your individual VA health centers, et cetera, are not doing 
their own thing, is that high on your list of priorities so 
that----
    Dr. Clancy. Very, very high. Yes.
    Senator Hirono. OK.
    Dr. Clancy. That is both a governance as well as a business 
process issue.
    Senator Hirono. Good. I think part of it was that there was 
a desire that it should not be a one-size-fits-all, that there 
is a desire that different communities may want to approach the 
health care needs of their veterans in ways that would be best 
for them. But, this led to a very piecemeal, hard to account 
kind of a system.
    Dr. Clancy. I think it is fair to say that when the 
networks were set up about 20 years ago, they were designed as 
laboratories of innovation.
    Senator Hirono. Yes.
    Dr. Clancy. I think that was the phrase that was used a 
lot, and----
    Senator Hirono. It sounded good.
    Dr. Clancy [continuing]. That is exactly what we got.
    Senator Hirono. Yes.
    Dr. Clancy. The flip side of that was a lot of 
inconsistency. I think we all recognize that health care in 
your State is different than health care in Georgia or 
Connecticut or other States for a whole lot of reasons. We need 
to have most of our core processes be consistent wherever 
veterans seek our assistance.
    Senator Hirono. I realize that this is a vast, vast health 
care system and it is going to take a while to address the 
various changes, and this is why I am so interested in what 
kind of priorities you have established. Is the homeless 
veterans issue a high priority?
    Dr. Clancy. That is a high priority for us. We have three 
overarching priorities this year. One is homelessness, because 
we are hoping to get as close as possible to functional zero by 
the end of this year.
    Second is access, whether that is access within our system 
or access to care in the community and getting that in a timely 
way.
    The third is veteran experience, that it is easy for 
veterans to navigate.
    Senator Hirono. Getting back to the homeless situation, you 
have a national call center for homeless veterans and the OIG 
identified there were systemic problems with the call center 
leading to some 40,000 missed opportunities where the center 
did not refer calls to VA medical facilities or closed 
referrals without ensuring that the homeless veterans were 
receiving the services. Is this on your list of----
    Dr. Clancy. Yes.
    Senator Hirono [continuing]. Priorities to change?
    Dr. Clancy. Yes. In fact, we have separated the homeless 
call center from the veterans' crisis line. Do you have your 
board? I just wanted to make a very brief Public Service 
Announcement about the crisis line because it is so important. 
I do not think a week goes by when I am not referring veterans 
directly to that line, and I am astonished by how rapidly they 
reach out and find the veterans and get them the help that they 
need.
    For a variety of reasons, both to make sure that the 
homeless calls were answered, but also to make sure that the 
crisis line was not getting overloaded with other calls----
    Senator Hirono. OK.
    Dr. Clancy [continuing]. Forgive my brief Public Service 
Announcement.
    Senator Hirono. I would be happy to put that information in 
my own veterans' newsletter.
    Dr. Clancy. We will get you a link. We will be happy to do 
that.
    Senator Hirono. Thank you.
    Thank you, Mr. Chairman.
    Chairman Isakson. You are going to get enough criticism. 
You ought to be allowed to brag a little bit in the hearing. We 
appreciate what you are doing. The hotline is a great service 
to our veterans and it does a great job.
    Dr. Clancy. Thank you.
    Chairman Isakson. Senator Sullivan.

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

    Senator Sullivan. Thank you, Mr. Chairman, and I want to 
start by just commenting on the work of the Committee. I want 
to compliment Chairman Isakson and Ranking Member Blumenthal. 
You know, one of the things that, at least in my short time in 
the Congress, this is a committee that is very bipartisan in 
terms of its approach, in terms of what we are trying to 
achieve. I think that that stems from the leadership on both 
sides of the aisle, certainly, but also stems from the mission 
that we all recognize is so important, to take care of our 
veterans and that I know all of you recognize.
    Sometimes these committees, you can have an opportunity for 
people to come here and kind of pound you on something like 
this. I think the better approach is probably to just figure 
out what the heck is going on.
    Dr. Clancy, when I looked at your testimony, I was a bit 
troubled. The Secretary mentioned that he is fine to be on the 
list. He certainly wants to improve. But, your testimony seems 
to lack a focus. It is four pages, double spaced. It talks a 
lot about MyVA, which is a promising initiative, but I do not 
think that is the road to getting off the list.
    Let me just ask a couple of questions, and in some ways, 
they are a follow-up of Senator Hirono's questions, which is 
how seriously is the VA, VHA, taking the issue that you are on 
this list? It is not a good list to be on. More importantly, 
she asked about priorities. You gave kind of broad priorities. 
What are the priorities to actually address the issues that got 
you on the list?
    Dr. Clancy. We are taking this very, very seriously. 
Frankly, what I find personally most valuable, as do my 
colleagues, about being on the High-Risk List is getting at the 
root causes of how did we get here.
    Senator Sullivan. Right.
    Dr. Clancy. There are two ways to look at problems. One is 
very specific problems that have been very clearly laid out for 
us in the past, and that is ongoing work.
    The second is to say, what is wrong with this picture and 
how did we get here, and that is a key part of realignment that 
we are doing internally within VHA. I would agree with you, I 
do not think the written statement was as well written as it 
could have been, and for that, I offer apologies. We would be 
happy, actually, to amend it for the record if that were an 
opportunity.
    Senator Sullivan. I think it is important. When you were 
just asked on priorities, you talked about homelessness, 
access, veterans' experience. I think I, certainly, am one who 
is going to be very focused on helping work with the VA to 
achieve those. But, it does not go back to the more specific 
issues----
    Dr. Clancy. Correct.
    Senator Sullivan [continuing]. That put you on the list in 
the first place. What are the priorities that you are going to 
undertake to address the issues that were laid out in the GAO 
listing of your agency?
    Dr. Clancy. Our priorities are a serious leadership 
commitment that we are moving beyond, if you have seen one VA, 
you have seen one VA. Yes, there are local differences. The 
buildings look a little bit different. But, the core processes 
have to be very consistent and standardized. It is very easy 
for me to say this. Making it happen and executing to that is 
going to take some time.
    Capacity and the resources and, frankly, being clear to the 
Congress about what we need to build the capacity to meet 
veterans' needs is very high on our list. That is why you have 
heard from the Secretary----
    Senator Sullivan. Yes.
    Dr. Clancy [continuing]. From me and others about what we 
need for hiring, what we need for space, and so forth. We 
recognize that there is also a backlog.
    Oversight and accountability is critically important. We 
have a lot of the pieces in place and I would submit that they 
have been too fragmented and need to be better integrated to 
rise to the challenges before us.
    Frankly, being transparent with the public and trying to 
get to a place where we are reliable, so we are posting how we 
are doing on wait times every 2 weeks for the public to see. We 
are also posting our results on a comprehensive system of 
metrics, which is how it is done in hospitals, outpatient care, 
efficiency, and so forth. But, that is available for the public 
to see every quarter.
    Senator Sullivan. Right.
    Dr. Clancy. I will take Ms. Draper's comment about self-
reported data very, very seriously. We have also built some 
trigger tools so that when our people who work with the data 
centrally are seeing very funny signals, they actually let the 
facility know in real time. They do not wait for them to go 
look for this report. They actually send them an e-mail to say, 
we are seeing some funky things going on here and you need to 
investigate what is going on with the scheduling.
    These are early, and, I would argue, fundamental and 
important steps, but that is the building block on which we are 
moving forward.
    Senator Sullivan. Thank you.
    Thank you, Mr. Chairman, and I will have some additional 
questions for the record the panel can----
    Dr. Clancy. That would be great. I do need to tell you, 
Little Rock has actually made tremendous progress and I am very 
proud of that, so, since we are your homestate.
    Senator Sullivan. Well, I am actually from Alaska, so--
    Dr. Clancy. Oh, I apologize. I got you confused. 
[Laughter.]
    Senator Sullivan. Maybe I will----
    Dr. Clancy. I will save that for Senator Boozman.
    Senator Sullivan. At least you did not confuse me for 
Senator Tillis, which happens a lot. [Laughter.]
    Thank you very much for your kind words.
    Dr. Clancy. Well, if you see me hiding under the table, you 
know why.
    Senator Sullivan. That is OK.
    Chairman Isakson. Thank you, Senator Sullivan.
    Senator Manchin.

       HON. JOE MANCHIN, U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you, Mr. Chairman, and thank you all 
for being here.
    It seems like we are just piling on now. All of us have 
problems. I will give you a specific one and it is in Beckley, 
WV. I think you all just heard about that. This has been going 
on for quite some time and I will go through the specifics.
    It seems like that we are all having problems understanding 
why no one is being held accountable or actions have not been 
taken against the responsible parties. It is just ongoing with 
the one in Beckley, as I said. The Office of Special Counsel 
substantiated allegations of switching antipsychotic drugs 
based solely on cost. They know they are doing it. The doctors 
are saying, prescribe the drug. They make a decision at the 
executive level. It is pushed down to the pharmacist. They 
dispense an alternate drug that is much cheaper because they 
say they do not have the money to pay. This has been going on, 
and it the only one we have had this report, but for so long.
    I guess I would just ask, Dr. Clancy, what does VA have in 
place to resolve these problems or make sure they do not 
continue, and why would anyone let it go on?
    Dr. Clancy. As you know, and I think your staff spoke with 
staff from our Office of Medical Inspector earlier today----
    Senator Manchin. Right.
    Dr. Clancy [continuing]. What you have just described is 
exactly correct. It turns out that some of the proven therapies 
for psychosis actually are sometimes better than the newer, 
more expensive ones, but what was absolutely not supposed to 
happen was a mandate, and veterans who were doing well on one 
of the newer treatments were not supposed to be switched 
arbitrarily----
    Senator Manchin. They never got it----
    Dr. Clancy. Right. No, that is exactly right----
    Senator Manchin [continuing]. Because it was all based on 
cost.
    Dr. Clancy. Right, and that was the wrong thing to do and 
we are going to be taking corrective actions to make sure that 
that does not happen and that there is a physician on the 
Pharmacy and Therapy Committee at Beckley, which has not been 
the case.
    Senator Manchin. We seem to jump out of the fire into the 
frying pan. It keeps going on, back and forth, the problems 
that we are running into. We had another clinic, a satellite of 
the Beckley clinic, that was closed, and we are trying to make 
sure we get services down in the rural part of the State in 
Greenbrier County.
    Dr. Clancy. Yes.
    Senator Manchin. I think we have worked with you on that, 
or are trying to work with you to try to get some help down in 
there.
    But, we, you know, if there is incompetency at any level, 
it seems like VA has a hard time getting rid of that, and I do 
not know why your system is so protective versus the military. 
Heck, they can get rid of people easier than you all can, I 
think.
    Dr. Clancy. I do not actually know how that works. What I 
know in health care is that many people believe that you want 
to be careful about keeping punitive disciplinary actions 
separate from people reporting problems that they see, because 
if people are afraid that if they report problems, they might 
be punished, they will not report them.
    Senator Manchin. Let me go to the----
    Dr. Clancy. I do not know if I am being clear.
    Senator Manchin. I----
    Dr. Clancy. We will be taking appropriate disciplinary 
action.
    Senator Manchin. We will get together, I guess. We have a 
problem there. You and I will talk, maybe personally, on this.
    Dr. Clancy. Great.
    Senator Manchin. Dr. Daigh, on prescription drug concerns, 
in West Virginia, it is the number 1 killer in my State. These 
are drugs out of the medicine cabinet and they are just being 
abused. That is an important issue for not just me, but for, I 
think, every Senator here in every part of America that is 
plagued by the epidemic of drug abuse and addiction. Of course, 
you know the VA patients are no different. We have a lot of our 
veterans returning and they are getting over-drugged as soon as 
they get there. They complain to us and they cannot get the 
proper treatments or the proper evaluation to get the proper 
treatment they need. They are having problems with that.
    I guess I would just ask, is this one of your most pressing 
issues, that you are getting a lot of complaints on this? Do 
you see this in your investigation?
    Dr. Daigh. I would say that the management of patients who 
require or take narcotics in excess of what seems reasonable is 
probably one of the most important issues the VA struggles with 
right now. They are not the Lone Ranger. I think the country 
struggles with that problem.
    Senator Manchin. If we had a piece of legislation that said 
you had to use an alternative before you could prescribe 
opiates----
    Dr. Daigh. I think about things in this way, sir. I think 
there are people who have pain. You have a toothache. You need 
treatment.
    Senator Manchin. Sure.
    Dr. Daigh. I think, though, that we need to come up with a 
way to prevent that patient who starts taking narcotic for a 
good reason but then ends up abusing it for some reason. I 
think that for the population----
    Senator Manchin. We know they are very addictive and people 
are getting hooked overnight. It seems like we are giving 
oxycontin for anything. You have got a headache, take an 
oxycontin.
    Dr. Daigh. I agree entirely with what you are saying. I 
think that there are several ways to get there. One way to 
think about it is to try to make sure that more people do not 
become addicted to a narcotic and focus your effort on trying 
to keep that from happening through the many things that I know 
you said before that are----
    Senator Manchin. I would like to get with you on this 
issue.
    Dr. Daigh. Yes, sir.
    Senator Manchin. Mr. Chairman, if I may indulge, just one 
second, if I could. Could you all, any of you want to just 
answer very quickly, do you believe that we can give veterans 
better care through the private providers than what we are 
giving now through the VA, or just as good, if not better?
    Dr. Daigh. My personal view is it depends on what the 
situation is. For example----
    Senator Manchin. I am just saying, we know all the problems 
we are having. No, no. I am just saying within the VA system. 
The culture, whether it is procurement, whether it is building 
a hospital, whether it is doing whatever, do you not think the 
taxpayers' dollars would be spent better if we got our veterans 
channeled for thequickest amount ofcare and thebest 
care,whereverthat may be?
    Dr. Daigh. Yes.
    Senator Manchin. Thank you.
    Dr. Daigh. My answer is yes, and I think sometimes that 
will be the VA.
    Senator Manchin. Thank you.
    Chairman Isakson. Thanks, Senator Manchin.
    Senator Tillis.

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

    Senator Tillis. Thank you, Mr. Chairman, and I want to 
thank all the panelists for being here.
    I have to give a shout out for one of my VAs again. I was 
down at the VA on Saturday back in Salisbury, and once again, 
they were doing great stuff, a lot of them on their personal 
time hosting an event for a Purple Heart recipient. We left 
there and went over to the town hall, which is a best practice 
for providing care to many seniors.
    To expand, Dr. Daigh, on your point, there is no doubt that 
many of the veterans who need care want care in a VA facility. 
The question is, can we provision it properly and can we make 
sure that it is done in the most efficient and effective way 
possible?
    I am not going to ask you any questions on all the shiny 
objects, reported by the GAO. I am glad to know that the VA has 
hit a list that really raises attention and, hopefully, 
marshaling of resources to fix problems. I think it is good. It 
is no different than a 300,000-person national company running 
in the United States where all of the sudden the bond raters or 
the stock investors put you on a watch list and get ready to 
tell people to sell your stock short because you are a failing 
entity. That is the reality. We have a lot of problems with the 
VA.
    We should not lose sight of the fact that most of the 
solutions to the VA are good things that are going on in the 
VA, and a part of what we have to do on this Committee is 
recognize we are sort of a board of directors and we need to 
perform our fiduciary responsibility to the veterans who need 
the care by making sure that we do not become a disabler, which 
we could potentially do, by not really focusing on how do we 
get to a systematic process that identifies the high priority 
items, the short-term, as Dr. Clancy said, the short-term 
things you can fix because they are relatively straightforward 
and relatively low cost and high impact.
    Then, the intermediate and long-term initiatives that we 
have to get implemented. We need an enterprise transformation 
strategy for the VA, which Secretary McDonald and I spoke about 
and I am thrilled to know, although I hope they have not fully 
read the GAO report--Dr. Shulkin and Laverne Council--because 
if they did, they may be scared to death and not want to be 
confirmed. I am looking forward to the confirmation hearing. 
They are very talented people who, I think, if they come in, 
they can be a part of the solution.
    We have to step back, and instead of having these 
hearings--and I know that it takes a lot of time for you all to 
prepare for this, and I know it takes your eye off the ball of 
the things that you want to do in your enterprise. What we need 
to do is get to a point where we have a hearing where we are 
talking about an inventory of the problems.
    I had a lengthy discussion with Laverne Council on IT 
issues. There is gold on the floor for improving the IT shop in 
the VA, for improving performance, and freeing up resources for 
other things to do in the VA. We have to get that done. It is 
not hard. It gets done every day in the private sector though 
seldom in the U.S. Government.
    We have to get away from this mentality that variation--
variation is oftentimes rationalized and almost never 
justified. There is a standard best practice and process for IT 
and provisioning of care. I am not talking about the care 
provided to patients. There may need to be some variations at 
that atomic level. All these other things, anybody who is in 
the VA who is responsible for it should not have a job. They 
should know that that was an irresponsible management decision. 
They should have had programs in place or recommended to their 
top management programs that make sense, which they have not 
done.
    I believe you all are part of the solution, and I think the 
GAO and other people that are looking at this are a very 
important part of the solution. But, we have to get to a point 
to where the Secretary and the senior executives develop a 
plan, so instead of us coming and chasing the shiny objects and 
then having people run down and report on progress of that 
shiny object, potentially at the expense of more important, 
higher-priority things, we have to start looking at this on a 
holistic basis and then decompose it into very specific action 
threats where we can actually start producing results.
    One thing I would urge the Secretary to consider is a 
different way of going about these programs. I think that some 
of the Members on this Committee, with the Chairman's 
indulgence, need to be embedded in that enterprise planning 
strategy. We need to have people here who are not just coming 
here because it is interesting. On the one hand, we are boards 
of director members, and then on the other hand, we are the 
general managers of our little VA plants in each of our States. 
We hear things that are going on in the State, so all of the 
sudden, we are hammering you on the specific things in our 
State. That is not a sustainable approach to addressing these 
enterprise problems.
    We need to get to a point where we are talking about the 
strategy and less about all of these examples that need to be 
fixed; and if they do get fixed, that may satisfy us for this 
Committee meeting, but they are not going to satisfy us for the 
long term and do what we need to do for the veterans.
    That was probably more of a speech than questions, but, Mr. 
Chairman, the only thing I would really ask the Secretary to 
consider, and some of these nominees that are coming in is, let 
us sit down and come up with a different approach, something 
that really has not been done on an enterprise basis, and in my 
estimation, in any area of government. Prioritize this, set 
specific--and capital improvement is another one. We talked 
about Denver.
    Let us talk about this enterprise and let us look at each 
one of these enterprises, put them on a heat map, find out 
which ones we should be tackling and how we prioritize the 
others ones, so what we are doing in future Committee meetings 
is talking about time to benefit and whether or not you made 
your goals, and hold people accountable--reward them for having 
achieved success and hold them accountable for having failed 
to.
    I think, if we do that, we will get away from this 
discussion that has been going on for years without substantial 
improvement and get to a truly transformed organization that 
will include VA facilities, hard working people in 
Fayetteville, Durham, Salisbury, Asheville, and all over this 
country, will include the best practices that are already 
embedded at a lot of those facilities.
    I am sorry I went over.
    Chairman Isakson. We will go to Senator Tester in just a 
second. I want to make two comments.
    First of all, I appreciate calling our attention to the 
confirmations. For the record, Dr. Clancy, those confirmations 
will be on May 5. The reason they were not last week is because 
we did not have the answers to all the questions that had been 
submitted and we cannot do a final markup until we do, so I 
appreciate your attention to that.
    Second, Sen. Tillis, I thought it was one of your better 
speeches. [Laughter.]
    I always do this. I may forward good ideas, but Dr. Clancy, 
do you have someone in the veterans health services that is the 
operational point person for responses to things like GAO and 
IG reports?
    Dr. Clancy. Yes, we do.
    Chairman Isakson. Who is that person?
    Dr. Clancy. A physician named Dr. Karen Rasmussen. She is 
here with me today.
    Chairman Isakson. Where is Karen Rasmussen? Hi, Dr. 
Rasmussen. How are you? I want to volunteer Senator Tillis and 
you to do a little project for me, if you would. I thought what 
you just said was an outstanding template to begin to get a 
game plan for responding and dealing with the recommendations 
of the IG and the Department. If you would work with Karen to 
see if there is a way that your idea can mesh with what they 
are doing in the VA, because I have got a feeling the VA does 
things the way they think they are supposed to do them because 
that is the way it has always been done. What you talked about 
is a different way of doing things, and maybe there is a 
combination between those two that would serve well. I do not 
want to force you to honor your speeches, but if you would be 
willing to do that and Karen would be willing, I think.
    Senator Tillis. Mr. Chair, I would ask, with your 
indulgence, that you consider maybe having a Member from the 
other side join in, because I honestly would like for this to 
become a point where people on this body have confidence in 
your overarching enterprise transformation strategy so we 
remove ourselves from chasing the latest issue of the day, 
which is important, but we become advocates for building 
credibility around a strategy that has specific timeline goals 
and measurable results. I think it would be worthwhile to have 
a couple of us take a look at that and I would be honored to 
help.
    Chairman Isakson. I am going to ask Ranking Member 
Blumenthal if he will supply us with a volunteer and let us 
know who that volunteer is. It does not have to be right this 
minute, because I pulled this totally off the top of my head, 
but----
    Senator Blumenthal. We will definitely provide you with a 
volunteer.
    Chairman Isakson. I want to thank Senator Tillis in advance 
for doing so and thank Dr. Rasmussen for being willing to take 
on that task, too. Thank you very much.
    Senator Tester, I apologize for taking some of your time. I 
apologize for interrupting.

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

    Senator Tester. No problem, Mr. Chairman. Thank you very 
much; and not for the record, I think that is the best speech 
you ever gave, Senator Sullivan. The best. [Laughter.]
    Senator Tillis. I will tell Senator Sullivan you said that. 
[Laughter.]
    Senator Tester. We had a recent hearing in front of the VA 
Appropriations Mil Con, VA Appropriations Subcommittee, and I 
believe, if I heard it correctly, the Secretary said that he 
requested that the VA be put on the High-Risk List. I may be 
wrong on that, but I thought that was the case.
    Dr. Clancy. He did say that, yes.
    Senator Tester. In the midst of all this, we had $1.4 
billion cut out of the House VA appropriations bill, which I 
know we will deal with it in our own way over here that would 
result in less veterans getting care, more specifically, about 
$690 million cut to medical care means 70,000 fewer veterans 
would receive the health care they need. Veto threats have been 
made. The National Commander said the VA cannot fulfill its 
mission without proper funding, but the House, for whatever 
reason, now wants to ration care, eliminate infrastructure 
projects, stop improving upon the programs and services the VA 
was created to provide.
    Dr. Clancy, is it fair to say that if the Senate took up 
the VA funding bill as it has now been voted out of 
subcommittee that it would be very difficult to get removed 
from the High-Risk List?
    Dr. Clancy. Yes, I think that is fair to say. It would 
certainly slow our progress. The Secretary has been strongly 
committed to being as open and transparent with all of you in 
terms of what are our requirements to meet veterans' needs and 
that is actually what we submitted in the administration's 
request. I will leave it at that.
    Senator Tester. Thank you. I think the facts are that we 
have got Iraq and Afghanistan going on, but the Vietnam 
veterans are the ones who need the attention right now, and 
rightfully so, and we thank them for their service, too. Part 
of that thank you is making sure they get the health care they 
need when they need that health care.
    I want to talk about some of those facilities. It is 
absolutely clear that we need to bolster our medical workforce. 
It is just not debatable. But, with that comes an increase in 
facilities and space to accommodate that. It is kind of the 
chicken and the egg kind of a thing. It has to happen almost 
simultaneously or you are not going to get the bang for the 
buck nor the services you expect.
    When I took the Secretary to Missoula, Montana here last 
month, he saw some of that local demand. We saw a clinic that 
has exceeded its capacity. The veterans in that region are 
growing 24 percent just in the next 6 months. He had said that 
there would be a green light to expand that facility. I do not 
know if you know or not. Is that true?
    Dr. Clancy. I would have to check on that and get back with 
you.
    Senator Tester. OK. Well----
    Dr. Clancy. I think you had also talked about potential 
partnerships with the--I just forgot the name----
    Senator Tester. We talked about partnerships with the 
Billings clinic----
    Dr. Clancy. Thank you. Yes----
    Senator Tester [continuing]. For mental health care 
professionals, too----
    Dr. Clancy. Yes. Yes.
    Senator Tester [continuing]. That is also very, very 
important. But, what----
    Dr. Clancy. I know Dr. Walter [phonetic] would be happy to 
pursue that.
    Senator Tester. Here is what I would point out to you. We 
are going to expand a facility that is probably going to have 
to be replaced in a year or two----
    Dr. Clancy. Yes.
    Senator Tester [continuing]. I understand you have got to 
walk before you can run, but the truth is that I appreciate the 
expansion, but ultimately, they are going to have a new 
building, and, boy, the quicker we could do that, we could 
maybe do away with some of the other expenditures, if you know 
what I mean.
    Dr. Clancy. We will get back to you on that.
    Senator Tester. All right. Thank you.
    The Chairman talked about VA leadership, which is 
critically important. I want to talk about that partnership 
with the Billings clinic for psychiatry at the University of 
Washington. Are you guys in the process of formalizing that 
partnership? Has any more been done than just talk?
    Dr. Clancy. Not yet, but Dr. Walter is on my list. I have 
worked with him in a number of national medical organizations 
and would be happy to follow up with him.
    Senator Tester. He is very, very good, but even more 
importantly--and I do not think there is a Senator that sits 
around this table or maybe even serves in the U.S. Senate that 
will not tell you that we need more mental health care 
professionals----
    Dr. Clancy. Right.
    Senator Tester. Whether you are in New York State, in the 
busiest part of New York City, or whether you are in Saco, MT, 
we need them. Quite frankly, I think this is an opportunity to 
address the rural aspect.
    Dr. Clancy. Yes.
    Senator Tester. If you can follow up on that, that would be 
good. I will tell you that I am sure that folks on this 
Committee, myself included, will do what we can do to help you 
meet mental health care needs out there, that also the whole 
country is short of.
    Dr. Clancy. Right. I should just note our appreciation for 
the resources in the Choice Act and also in the Clay Hunt Act 
for attracting and helping with debt reduction and so forth. I 
think that we also need to move upstream to encourage more 
students to go into these fields and that that is clearly going 
to be the next frontier for us.
    Senator Tester. I appreciate the Senator's proactivity on 
trying to recruit early.
    Chairman Isakson. Thank you, Senator Tester.
    Senator Rounds, followed by Senator Boozman.
    Senator Rounds.

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

    Senator Rounds. Thank you, Mr. Chairman.
    Earlier today, Chairman Isakson and I sent a letter to the 
Secretary of the VA with concerns on reimbursement changes to 
home health care and hospice care providers. I have also heard 
from a number of other groups on untimely payments from the VA. 
Late payments hurt veterans because providers are reluctant to 
take on VA patients if they do not get paid in a timely basis. 
How does the VA plan to address this particular issue? Are you 
aware of the issue? Possibility that maybe flexibility within 
your budgeting process could help provide for some more timely 
payments, and has the GAO made more than one mention or just 
the one mention in 2014 in terms of any recommendations on this 
particular issue?
    Dr. Clancy. I am acutely aware of this issue. I get a lot 
of e-mails and correspondence, as does the Secretary. And, I 
would guess that we have never been the swiftest payer. I think 
that is putting a lot of providers in a bind right now because 
they are feeling a lot of pressure from both the Federal 
Government as well as private payers trying to get to value-
based payments and so forth. They have less flexibility and 
they are now feeling like they are really in a box.
    Because of the consolidation of our central business office 
and our payments, our biggest challenge right now is making 
sure that we get the business processes right. We are in the 
midst of doing that. A number of our networks have shown some 
improvements. VISN 23, which your State is part of, is one of 
our better networks, which is not to say flawless, in terms of 
payments. Others are further behind.
    We are keeping, literally, a weekly eye on this and will 
not rest until more providers are getting paid in a timely 
fashion, because you are completely right. Some veterans say 
they go to providers on the outside and are told, I will see 
you this time, but next time, Ido not know.That is very,very 
high onour list of priorities right now.
    Senator Rounds. I think maybe that goes back, as the 
Chairman had suggested, back to what Senator Tillis had 
proposed here in terms of the operations side of things.
    I am just curious. It looks to me like in a lot of cases we 
find some very good people that are working within a system 
which, for lack of a better term, is simply archaic. It is a 
very large organization, and what I am curious about is if we 
talked about an organizational chart, one in which ideas can 
flow up and down and direction and focus moves in both 
directions, do you have an accurate organizational chart that 
is available to you that you have had a chance to look through 
to see where it gets from you down to a doctor, let us say, at 
the VA in Sioux Falls, South Dakota?
    Dr. Clancy. I think you have just articulated one of our 
biggest challenges, for sure. I have organizational charts. I 
think our bigger challenge is less the boxes on the chart--
although we are taking a very hard look at that and will look 
forward to doing more of that with Dr. Shulkin and so forth--
but it is more what I would say is the physiology. How do the 
processes work?
    I know that there is phenomenal work going on at a lot of 
our local VAs. Salisbury would be one. They are everywhere. We 
do not actually get to learn enough from them, and I do not 
think that we have created the space in the past where if a 
policy is issued from headquarters and people do not have the 
resources or capacity to do it that they have got the space to 
say: great idea, except it will not work here. That is the 
alignment that we are working very, very hard on now, which, 
frankly, is why the recommendations in the High-Risk Report are 
useful to us, because they very clearly articulate root causes 
that we can use as sort of a compass moving forward.
    Senator Rounds. One of the employees in the Sioux Falls 
location tried to chart it, and as near as they could 
determine, from a physician trying to get to the top would have 
13 layers to literally work their way through. It seems to me 
that that may be part of the challenge that you face. You can 
have a lot of very hard working individuals, but they are 
working in a system which today you would not find in most 
business proposals. Is that a fair statement?
    Dr. Clancy. That is a very fair statement, and I will say, 
literally, from day one, when Secretary McDonald was confirmed, 
you know, I think it took him probably a few weeks to put his 
personal cell phone online and on CNN and so forth, and has 
modeled for all of us trying to break up that kind of 
hierarchial filtering, if you will, of information, both up and 
down the chain. I communicate with the field every week. I get 
a lot of e-mails back, which is symbolically important. It is 
not the same thing as having clearer processes for it, which is 
what we are working on now.
    Senator Rounds. Mr. Chairman, there is just one thought, 
and that is this. I think when the Chairman and the Ranking 
Member both indicated at the very first meeting that while we 
are going to ask some really tough questions, our goal is to 
see that you succeed.
    Dr. Clancy. I appreciate that immensely. Thank you.
    Senator Rounds. We still feel that way and we want to see 
it happen. But, based on what we saw just in Denver and the 
challenges you have got there----
    Dr. Clancy. Huge.
    Senator Rounds [continuing]. The issues are very 
significant, and perhaps part of what we need to do, as some of 
you who have walked into some pretty deep water with lots of 
gators, maybe it is time that we not only start draining the 
swamp, but maybe we pull a few of those gators out and move 
them in a different direction, as well. Thank you.
    Dr. Clancy. Thank you.
    Senator Rounds. Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Rounds. Good analogy, 
by the way.
    Senator Boozman.

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

    Senator Boozman. Thank you, Mr. Chairman, and thank you all 
so much for being here. We are glad that things are going 
better in Little Rock.
    Dr. Clancy. I will never make that mistake again.
    Senator Boozman. I bet. [Laughter.]
    Dr. Clancy. I am going to send Senator Sullivan a note, 
but----
    Senator Boozman. No----
    Dr. Clancy [continuing]. But things are better in Little 
Rock.
    Senator Blumenthal. You have helped to lighten our meeting 
significantly. Thank you for----
    [Laughter.]
    Senator Boozman. Thank you very much. In the GAO report, 
one of the reasons that VHA ended up on the High-Risk List is 
because of ambiguous policies and inconsistent processes, which 
is interesting. I think all of us feel like we need to bring to 
all of you the things that we are hearing out in the field; and 
one of the complaints that I hear most often is that VA has no 
standardized processes for reimbursing claims. You are kind of 
hearing the same thing over and over.
    It is really difficult if you are in an area where you are 
across borders and across VISNs or however we designate things 
now, but you will have one method of handling things in 
Memphis. You will have another in Jackson, MS. You will have 
another in Little Rock. It really does get confusing. So, that 
is something I think we really need to look at and I would 
appreciate it if you would look at standardizing those kind of 
things.
    Again, these are things that do not cost money. These are 
things that will save you time and save the practitioners.
    The other problem is that, I think, practitioners get hung 
up. I am sure it is true in the VA, with VA practitioners, like 
if you are on the phone for 2 hours trying to figure out what 
is going on, trying to figure out where a claim is at. Is there 
a way to, perhaps using some sort of identification, taxpayer 
number or whatever, to do that electronically, where you could 
get in a situation where you could go online and figure out 
where you are at as far as----
    Dr. Clancy. First, we are trying----
    Senator Boozman [continuing]. Medical claims?
    Dr. Clancy [continuing]. We are working very hard now to 
standardize these processes, and I think you are all aware that 
we have about five different paths to helping veterans get care 
in the community, which is a little bit part of the problem. It 
is not the sole problem. Some of the original problem is not 
having standard processes at every facility.
    It is further complicated by the fact that we have got the 
resources offered by Choice, which is terrific, the PC3 
contract, Project ARCH in some areas, traditional non-VA care, 
and some other agreements with our affiliates and so forth. It 
is a pretty messy puzzle, not a script you would write from 
scratch.
    I think that we are going to look forward to working with 
all of you to look for opportunities to streamline that, 
because in the end, if you have got five different ways to do 
something built into the process before you even start getting 
with claims, you are more likely to increase the probability of 
error. It is almost a law.
    We are working very hard on standardizing how we pay those 
claims right now. That is not going to be fixed immediately, 
but I have got some of our very best people on this, and as I 
noted earlier, we have our senior leaders in D.C. this week. We 
were working about this into the evening last night. It is a 
huge challenge with us.
    We embrace the opportunities to do the best by veterans 
when we see them in our system, but also to take advantage of 
local capabilities. We need to have business processes that 
support it and that is not what we have had. So, I will leave 
it at that.
    Senator Boozman. No, and I appreciate that, and it is 
difficult. Another thing that we hear is that, and I think 
Senator Rounds mentioned it in the sense of you have policies, 
you have directives, and sometimes you have situations where 
perhaps employees feel like that that is not appropriate there 
and kind of go around. And, the other side of that is we want 
people to have local control, which I understand is really 
difficult.
    With whistleblowers we have a situation now that reports of 
retaliation and things like that. Can you all address that and 
talk to us a little bit about what is going on in that regard. 
Certainly, you want people to come forward without the problem 
of retaliation.
    Dr. Clancy. Yes. I will say that the Secretary has been 
incredibly crystal clear from day one, and Sloan Gibson before 
him, when he was Acting Secretary, that retaliation will not be 
tolerated.
    I will go further and say there is no health care 
organization in this country or anywhere in the world that can 
actually provide safe care without whistleblowers. Now, I am 
using a small ``w'' here, OK. But, if people are not coming 
forward and saying, we have a problem, I am seeing a problem, 
there is a leak over here. In fact, if people are not actively 
looking for error all the time, you will never get to care that 
is reliable and safe.
    Nuclear industries run like this, right. They are 
constantly looking for, where are we going to have a problem 
and anticipating them ahead of time. That is where we have got 
to get to.
    In that context, whistleblowers are heroes, which is why 
some of our executives have actually gone to ceremonies 
celebrating them and so forth.
    I think we are not retaliating and we are cooperating fully 
with investigations of those who have been accused of 
retaliating. I know that Senator Blumenthal had a lot of 
questions about this. Some of these investigations are still 
ongoing. But, appropriate discipline can be taken, I can assure 
you.
    Senator Boozman. Can I, with your permission, just to 
follow up with that.
    Dr. Clancy. Sure.
    Senator Boozman. In the bill that we passed, we gave you 
the ability to retaliate against people that were not acting 
appropriately, in the sense of giving you the ability to get 
rid of people that were not working out. Do we need to--that 
was at the top. I know Senator Rubio and Congressman Miller 
have introduced bills to make it such that a lower level, that 
you have more flexibility in that regard, again, those people 
that are not working out. Do you support that, so that we can 
deal with some of the problems like retaliation?
    Dr. Clancy. We have discussed this with the Secretary and 
so forth. We are very uncomfortable with anything that would 
single out VA as opposed to other Federal departments because 
it might impair our ability to recruit.
    I think that we welcome the flexibility that you gave us 
when you passed the Choice Act because it does not eliminate 
due process but encourages to speed up the process. Due process 
does take some time. Again, that balance between if people feel 
like if they wave their hands and raise their hands, excuse me, 
and say, we have got a problem, that they do not need to fear 
being punished. That is the balance that we are--it is very 
dynamic and that is what we are struggling for.
    So, I know that some people who work in VHA do not feel 
that safe right now at the senior leader level. I am not sure 
that making that more widely available would necessarily be 
helpful.
    Senator Boozman. Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Boozman.
    Senator Blumenthal had a follow-up question.
    Senator Blumenthal. You just mentioned, Dr. Clancy, that 
there will be disciplinary measures. When will there be----
    Dr. Clancy. We are waiting for the results of 
investigations to conclude. I know, for example, in Phoenix 
that there are multiple investigations going on right now. By 
design, many of these are being done by the Office of 
the Inspector General. We are waiting to hear from them. I 
cannot give you a specific timeline except to say that when we 
get those results, we will act as swiftly as we can.
    Senator Blumenthal. Dr. Daigh, when will the investigations 
be done?
    Dr. Daigh. I think the best answer I can give you, sir, is 
that there is a process in place to work through AUSAs and to 
move forward according to the rules that we normally deal with 
for criminal complaint.
    Senator Blumenthal. By AUSAs, you mean----
    Dr. Daigh. Assistant U.S.----
    Senator Blumenthal [continuing]. Assistant U.S. Attorneys.
    Dr. Daigh. That is correct, sir. But, I----
    Senator Blumenthal. But, they do not prepare reports.
    Dr. Daigh. I believe that we take our reports to them to 
seek whether or not they will attempt to prosecute an 
individual.
    I think it best that the investigators get back to you in a 
written response.
    Senator Blumenthal. Have those reports been submitted to 
the AUSAs?
    Dr. Daigh. I cannot speak to all of them, but I know that 
some have. I am aware that some have, yes.
    Senator Blumenthal. Well, let me again ask you what the 
timeline is for their consideration. How long have those 
investigations been ongoing?
    Dr. Daigh. Sir, I will have to get back with you for the 
record. I simply do not work in that area non-stop. I will say 
that at every staff meeting we have within the Inspector 
General's office, we get an update on numbers of how many 
reports are where, and I know that there are a number of them 
with AUSAs.
    Senator Blumenthal. I really do appreciate your offer to 
provide me with information, but, quite bluntly, the American 
people deserve this information, not just Members of Congress 
in a private briefing setting or in a written response. The 
American people deserve to know who will be held accountable, 
why the investigations have not been completed, what is going 
to be done to expedite them. Justice needs to be sure, swift 
and sure, especially when it comes to danger of people's lives. 
Both you and Dr. Draper have indicated that lives were at risk 
and maybe even lost as a result of potential wrongdoing in 
Phoenix and in 1992 or 1993, other situations around the United 
States.
    So far, we have been discussing only Phoenix, and the 
reports, investigations there are not even complete yet. Am I 
correct?
    Dr. Daigh. I am uncertain exactly about the 
investigations----
    Senator Blumenthal. Dr. Clancy is nodding her head, which, 
I think, is----
    Dr. Daigh. I believe her, but I am not certain on that 
fact. But, sir, I believe that all of us want this to be done 
as far as we can. There is no----
    Senator Blumenthal. I am sure you do want it to be done as 
quickly as possible. We all want it to be done as quickly as 
possible. The question is when it will be done.
    Let me just ask one last question. There have been various 
proposals to take a billion dollars from money that was 
allocated to the accessibility and Choice program in order to 
pay for completion of the Denver medical facility. My belief is 
that taking this billion dollars from the Choice program would 
make it far more difficult and unlikely for the VA to be 
removed from the High-Risk List. Does anybody disagree?
    Let me interrupt myself to call on Dr. Daigh.
    Dr. Daigh. Sir, the only thing I can say is I am not sure 
that we have studied that question, so I----
    Senator Blumenthal. You are not disagreeing, then.
    Dr. Daigh. I am not disagreeing.
    Senator Blumenthal. Does anyone disagree? Dr. Draper.
    Ms. Draper. Well, I will say we have specific criteria for 
removal from the High-Risk List; and we do have, in response to 
Senator Tillis, I think, a good framework for how agencies 
address getting off the High-Risk List.
    Senator Blumenthal. Well, let me put the question a 
different way. Detracting from the objectives of the Choice 
program by diverting a billion dollars will make it far more 
difficult and unlikely that the VA will meet those criteria, is 
that correct? Dr. Clancy.
    Dr. Clancy. If I could just provide some specific details. 
The Choice resources are sort of two big buckets, right. One is 
the $10 billion for the actual purchasing care in the community 
and the other is $5 billion really focused on enhancing our 
capacity.
    Most of our facilities, when asked about their acute needs, 
actually front-loaded their requests from that $5 billion for 
construction. Most were not for new facilities, but mostly for 
non-recurring maintenance, renovation, and so forth, which goes 
on all the time in the hospital and health care industry, 
right. The proposal is that a portion of that would be slowed 
down. It would not inherently affect our capacity in terms of 
increasing space and hiring people who need to see patients.
    I take your point, but I want to say that----
    Senator Blumenthal. Dr. Clancy----
    Dr. Clancy [continuing]. We have a very strong commitment 
to get off this High-Risk List, but at the same time, I think 
Denver, the facility there, and what is the right thing to do 
for veterans and the public is also pretty imperative.
    Senator Blumenthal. Would it not affect the quality of 
care?
    Dr. Clancy. In most instances, slowing down the 
construction, renovation, and so forth would not necessarily 
impact the quality of care.
    Senator Blumenthal. Not necessarily, but I can tell you in 
the instances where I know and I have talked to my colleagues--
--
    Dr. Clancy. Yes.
    Senator Blumenthal [continuing]. It would have an impact on 
quality of care. We are talking about in the Westhaven facility 
in New Haven----
    Dr. Clancy. Yes. Mm-hmm.
    Senator Blumenthal [continuing]. Primary care.
    Dr. Clancy. Yes.
    Senator Blumenthal. I would like to know from you, and you 
do not have to do it now----
    Dr. Clancy. OK.
    Senator Blumenthal [continuing]. You can provide it in 
written form----
    Dr. Clancy. I will give you an informed, thoughtful 
response.
    Senator Blumenthal. Thank you.
    I want to thank all the witnesses for your very informative 
and helpful comments today.
    Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Ranking Member Blumenthal.
    I would just end by saying this, that I think within these 
recommendations and findings of GAO and the Inspector General, 
there are savings and there are funds that could be used to pay 
for things that the VA needs to pay for without us just adding 
onto the burden. I think Senator Blumenthal makes an 
outstanding point, and I told Sloan Gibson in Denver that when 
the recommendation comes to the Committee as to how we pay for 
the billion-dollar overrun, if there is not contribution from 
within the operational budget of the VA itself, I do not know 
how we are ever going to get any money done to do it 
whatsoever. I hope as they look to build that, they will find 
those funds internally to the extent possible without damaging 
the VA.
    With that said, I want to thank all our people for 
testifying. Thank you for being here, and I thank Senator 
Tillis for volunteering to be my Committee Chairman, and Karen, 
thank you for being so willing to be voluntarily volunteered 
for a task.
    This meeting stands adjourned.
    [Whereupon, at 3:58 p.m., the Committee was adjourned.]
 Response to Posthearing Questions Submitted by Hon. Johnny Isakson to 
Debra A. Draper, Director, Health Care, U.S. Government Accountability 
                                 Office
    Question 1.  A number of factors are considered in evaluating 
whether any Federal department, agency, or program should be placed on 
the High Risk List. Please describe the procedures, process, and people 
involved in the Government Accountability Office to determine whether a 
Federal program is placed on the List.
    Response. Many individuals within GAO with expertise in various 
Federal policy areas, including the Comptroller General, are involved 
in the process of evaluating whether specific programs or functions 
should be included on the High Risk List. Affected agencies and 
departments are not solicited for their agreement to be placed on the 
list, nor do they ask to be placed on the list. Rather, the decision to 
add areas to the High Risk List is a determination made solely by GAO 
based on comprehensive analyses and quality assurance reviews.
    To determine which Federal Government programs and functions should 
be included on the High Risk list, we use our guidance document, 
Determining Performance and Accountability Challenges and High 
Risks.\1\ In making this determination, we consider:
---------------------------------------------------------------------------
    \1\ GAO, Determining Performance and Accountability Challenges and 
High Risks, GAO-01-159SP (Washington, DC: November 2000).

     whether the program or function is of national 
significance or is key to performance and accountability;
     qualitative factors, such as whether the risk involves 
public health or safety, service delivery, national security, national 
defense, economic growth, or privacy or citizens' rights; or, could 
result in significantly impaired service, program failure, injury or 
loss of life, or significantly reduced economy, efficiency, or 
effectiveness;
     the exposure to loss in monetary or other quantitative 
terms--at a minimum, $1 billion must be at risk in areas such as the 
value of major assets being impaired; revenue sources not being 
realized; major agency assets being lost, stolen, damaged, wasted, or 
underutilized; potential for, or evidence of improper payments; and 
presence of contingencies or potential liabilities; and,
     corrective measures planned or under way to resolve a 
material control weakness and the status and potential effectiveness of 
these actions--if effective solutions will not be completed in the near 
term and resolve the root causes of the problem, we determine that the 
program or function is high risk.

    The process for determining whether VA health care should be 
designated high risk began months before GAO issued its 2015 high risk 
series update. In making the determination to add VA health care to the 
High Risk List in 2015, a number of specific factors were considered. 
In recent years, we have made numerous recommendations that aim to 
address weaknesses in VA's management of its health care system--more 
than 100 of which have yet to be fully implemented. After analyzing the 
findings of GAO's work on VA health care completed over the past five 
years, we categorized our concerns about VA's ability to ensure the 
timeliness, cost-effectiveness, quality, and safety of the health care 
the department provides into five broad areas: (1) ambiguous policies 
and inconsistent processes, (2) inadequate oversight and 
accountability, (3) information technology challenges, (4) inadequate 
training for VA staff, and (5) unclear resource needs and allocation 
priorities.
    Once the determination was made to add VA health care to its High 
Risk List, GAO briefed the relevant Congressional committees of 
jurisdiction. Just prior to the publication of the 2015 High Risk List, 
GAO officials met with and informed VA officials--including the VA 
Secretary and Under Secretary for Health--that VA health care was being 
added to the list.
                                 ______
                                 
  Response to Posthearing Questions Submitted by Hon. Dan Sullivan to 
Debra A. Draper, Director, Health Care, U.S. Government Accountability 
                                 Office
    Question 1.  Dr. Draper, the VA and the VHA are getting beaten up a 
lot in the media and in Congress. While a lot of aggressive oversight 
is justified, a group of people can only take so much of this type of 
oversight before they become timid and simply check the box to not get 
in trouble. This is not the type of culture we want at the VA. What 
suggestions do you have to improve the culture at the VHA and the VA as 
a whole?

    Question 2.  Dr. Draper, what suggestions do you have to actually 
encourage innovation and new ideas?

    Question 4.  Dr. Draper, how can we create excellence at the VA?
    Response. We provide a combined response to questions 1, 2 and 4, 
as all three questions deal with VA organization, performance, and 
opportunities for improvement.
    VHA's mission states, ``Honor America's veterans by providing 
exceptional health care that improves their health and well-being.'' 
However, risks to the timeliness, cost- effectiveness, quality, and 
safety of veterans' health care, along with other persistent weaknesses 
identified by GAO, VA's Office of the Inspector General, and others in 
recent years have not only raised concerns about VA's management and 
oversight of its health care system, but also increased awareness of 
the magnitude and pervasiveness of the issues. Over the past few years 
there have been numerous reports of VAMCs failing to provide timely 
care, including specialty care, and in some cases, the delays have 
reportedly resulted in harm to veterans.\2\
---------------------------------------------------------------------------
    \2\ See, for example, Department of Veterans Affairs, Office of 
Inspector General, Healthcare Inspection Gastroenterology Consult 
Delays William Jennings Bryan Dorn VA Medical Center Columbia, South 
Carolina, Report No. 12-04631-313. (Washington D.C.: September 6, 
2013), and Department of Veterans Affairs, Office of Inspector General, 
Healthcare Inspection Consultation Mismanagement and Care Delays 
Spokane VA Medical Center Spokane, Washington, Report No. 12-01731-284. 
(Washington D.C.: September 25, 2012).
---------------------------------------------------------------------------
    In addition to its responsibility to those veterans it serves, VA 
also has a fiduciary responsibility to the American people to ensure 
that taxpayer dollars are spent properly. Congress has provided steady 
increases in VA's annual health care budget with amounts increasing 
from $23.0 billion to $55.5 billion between fiscal years 2002 and 2013. 
Additionally, the Veterans Access, Choice, and Accountability Act of 
2014 provides $15 billion in new funding for, among other things, the 
use of non-VA clinicians to provide care for those veterans faced with 
access challenges, including those related to lengthy travel distances 
and long wait times.
    To address these issues and help improve the department's culture, 
encourage innovation, and create excellence, I suggest VA consider the 
following resources. First, GAO's five criteria for removal from the 
High Risk List provide an excellent framework for performance 
improvement, while also addressing the relevant high-risk issues for 
VA. The following are the five criteria for removal:

     Leadership commitment. Agency leadership has demonstrated 
strong commitment and support.
     Capacity. Agency has the capacity (i.e., people and 
resources) to resolve the risk(s).
     Action plan. Agency has developed a corrective action plan 
that defines the root cause(s), identifies solutions, and provides for 
substantially completing corrective measures, including steps necessary 
to implement solutions we recommended.
     Monitoring. Agency has instituted a program to monitor and 
independently validate the effectiveness and sustainability of 
corrective measures.
     Demonstrated progress. Agency has demonstrated progress in 
implementing corrective measures and in resolving the high-risk area.

    Second, VA could seek to learn from the experiences of other 
agencies and program areas that have been successfully removed from, or 
are making progress toward removal from GAO's High Risk List. For 
example, the National Academy of Public Administration recently 
sponsored a discussion on the opportunities and challenges of being on 
GAO's High Risk List, by a panel of participants representing agencies 
and programs that have been included on, or have been removed from the 
list. At the discussion, one official said the agency she represented 
used a portfolio management system to prioritize risks for leaders, 
which helped the program to be removed from the High Risk List. Another 
agency official with programs currently on the High Risk List said his 
office was planning to launch an exchange program to gather ideas by 
giving employees experiences in other offices.
    Third, VA could consult organizational performance literature and 
research, which commonly identify several key characteristics of highly 
effective, excellent, and innovative organizations. These include the 
following:

     Well defined and compelling mission, purpose, and expected 
results
     Clear and visible commitment to excellence
     Customer/client-centric
     Efficient and effective infrastructure, systems and 
processes
     Effective management of resources, including attracting 
and retaining a highly qualified workforce
     Empowered workforce, including open, trusting, and multi-
directional communications
     Flexible and adaptable in an ever changing environment
     Emphasis on continuous learning

    Finally, a number of programs are available to assist organizations 
in achieving performance excellence. One such program is the Baldrige 
Performance Excellence Program, which is administered by the Department 
of Commerce's National Institute of Standards and Technology, in 
conjunction with the private sector. The Baldrige Criteria for 
Performance Excellence--used by organizations around the country, 
including health care organizations--provide a framework and tool to 
assess organizational strengths and weaknesses, to identify 
opportunities for improvement, and to create a plan for moving 
forward.\3\ According to the Baldrige Program, ``performance excellence 
refers to an integrated approach to organizational performance 
management that results in: (1) delivery of ever-improving value to 
customers and stakeholders, contributing to organizational 
sustainability; (2) improvement in overall organizational effectiveness 
and capabilities; and, (3) organizational and personal learning.'' In 
addition to the Baldridge Program, other entities, such as the 
Institute for Healthcare Improvement and the Joint Commission, also 
offer programs that focus on health care organizations' performance 
improvement.
---------------------------------------------------------------------------
    \3\ See for example, http://www.nist.gov/baldrige/about/
performance--excellence.cfm.

    Question 3.  Dr. Draper, what authorities can Congress give you to 
help these innovations and ideas cut through the existing VA and VHA 
bureaucracies?
    Response. GAO has adequate audit authority to continue to provide 
robust oversight of VA. To help ensure VA takes the necessary actions 
to improve health care for the Nation's veterans, congressional 
attention and oversight is critical. In the spring and summer of 2014, 
congressional committees held more than 20 hearings to address 
identified weaknesses in the VA health care system. Sustained 
congressional attention to these issues will help ensure that VA 
continues to make progress in improving the delivery of health care 
services to veterans. This includes continued congressional oversight 
of VA's progress made on implementing recommendations made by GAO, VA's 
Office of the Inspector General, and others. As part of this ongoing 
oversight, it would also be beneficial for Congress, as well as GAO, to 
receive periodic updates (e.g., quarterly) from VA on its progress in 
addressing the five areas of concern that led to its health care system 
being placed on the High Risk List.
                                 ______
                                 
Response to Posthearing Questions Submitted by Hon. Richard Blumenthal 
    to Carolyn M. Clancy, M.D., Interim Under Secretary for Health, 
  Veterans Health Administration, U.S. Department of Veterans Affairs
    Question 1.  Dr. Clancy, during your testimony we discussed the 
issue of delayed construction and maintenance projects and their 
potential negative effects on quality of care. While you stated that 
delaying improvement projects would not necessarily have an impact on 
quality of care, I am concerned that delaying necessary improvement and 
maintenance for Veterans Health Administration facilities would have 
long-term effects on the level of care that is delivered to veterans, 
and the ultimate costs to maintain the facility. For instance, the 
Administration has recently suggested delaying an improvement project 
for the primary care clinic at the West Haven VAMC. I have visited that 
facility many times and I am convinced that veterans, and particularly 
women veterans, need a new primary care clinic that meets their health 
care needs.

    a. Can you please tell me how VA plans to ensure that delays in 
construction and maintenance projects do not negatively affect patient 
care?
    Response. The West Haven project was submitted and approved through 
VA's FY 2014 Strategic Capital Investment Planning (SCIP) process. This 
project was delayed due to scope changes. The design contract for the 
project is scheduled to be awarded this month.
    VA will ensure that delays in construction and maintenance projects 
do not adversely affect patient care by utilizing the many capabilities 
at our disposal, such as; expanded hours, telehealth, and care in the 
community. These capabilities will allow us the flexibility we need to 
ensure that Veterans receive the quality and timely care that they 
rightfully deserve.

    b. Are there any specific actions VA will take to alleviate any 
identified gaps in care?
    Response. VA continually looks for gaps in care by tracking and 
closely monitoring facility and network capacity. In response to the 
recent crisis of Veteran access, senior leaders from across the 
department gather daily to focus on improving Veterans' access to care, 
thereby alleviating gaps in care. We have concentrated on key drivers 
of access, including increasing medical center staffing by 11,000, 
adding space, boosting care during extended hours and weekends by 10 
percent and increasing staff productivity. This focus on capacity 
creates organizational opportunities to leverage choice and virtual 
care. We currently have ongoing pilots and programs, such as My 
HealtheVet, to operationalize these plans and create opportunities to 
identify potential gaps in a Veterans care.

    c. Please tell me what steps VA plans to take to minimize the 
impact of delayed minor construction and nonrecurring maintenance on 
the condition of its facilities?
    Response. If any minor construction or NRM projects that were 
originally to be funded through Section 801 of the Choice Act are 
delayed, VA will work to restore funds for the delayed project(s) in 
either fiscal year (FY) 2016 or FY 2017. In an effort to mitigate the 
impact to Veterans due to the potentially delayed projects, VA will 
work to ensure that access is provided through other avenues within VA 
and also within the community.
                                 ______
                                 
  Response to Posthearing Questions Submitted by Hon. John Boozman to 
 Stephen W. Warren, Executive in Charge and Chief Information Officer, 
 Office of Information Technology, U.S. Department of Veterans Affairs
    Question 1.  Does the VA currently have an interoperable pharmacy 
data transaction system that is interoperable with the Department of 
Defense?
    Response. DOD and VA do have interoperability for pharmacy data and 
currently exchange pharmacy data on Veterans. Both departments store or 
map the data to nationally accepted standards. This enables each to 
interpret and compute the other's data without risk of ambiguity.
    VA does not yet have the capability to send prescriptions to DOD 
for dispensing or to receive prescriptions from DOD.
                                 ______
                                 
  Response to Posthearing Questions Submitted by Hon. Dan Sullivan to 
 Carolyn M. Clancy, M.D., Interim Under Secretary for Health, Veterans 
       Health Administration, U.S. Department of Veterans Affairs
  seriousness of the list and it's not just about getting off the list
    Question 1.  How seriously is the VA and VHA taking being on the 
GAO's High Risk List?
    Response. VA takes its inclusion on the GAO High Risk List 
extremely seriously and recognizes that we have a distinct opportunity 
to address these challenges across the system. This will require us to 
seek collaboration opportunities throughout the Department and in the 
community. We are committed to instituting long term durable solutions 
and sustained improvement in the high risk areas identified. As we 
implement corrective measures, we will provide GAO with documentation 
of our progress. Additionally, we will seek input from GAO and OIG to 
ensure that our actions are meeting the intent of their 
recommendations. We look forward to substantial improvement and 
completing the recommendations which they have identified.

    Question 2.  What specifically should the VHA do to not just get 
off this list, but to make the VHA a healthcare solution that Veterans 
want?
    Response. VHA has established a Blueprint for Excellence that 
offers a detailed vision for the evolution of health care services 
provided by VHA. The Blueprint provides guidance for the alignment of 
resources to transform VHA from being provider-centric to Veteran-
centric; with specific strategies that offer a pathway to address GAO's 
five high risk areas. Addressing these strategies is a fundamental part 
of VHA Senior Leaders performance plans. The Blueprint for Excellence 
will allow for Health Care that simultaneously address improving the 
performance of VHA healthcare, developing a positive service culture, 
transitioning from ``sick care'' to ``health care'' in the broadest 
sense, and developing agile business systems and management processes 
that are efficient, transparent and accountable.
    The Blueprint for Excellence aligns with several of the GAO high 
risk areas by emphasizing what VHA must do to become the system that 
Veterans deserve, and secondarily helping VA get off the GAO High Risk 
list:

     Improving performance,
     promoting a positive culture of service,
     Advancing healthcare innovation for Veterans and the 
country, and
     Increasing operational effectiveness and accountability.

    VHA has developed specific actions to get off the High Risk List, 
using the Blueprint for Excellence as the vehicle. Regarding national 
policy and processes, VHA is integrating our policy and operational 
leaders across business lines, such as primary care, surgical care and 
mental health, which will align policy development with implementation. 
Health care is a dynamic industry, and our policies must be flexible 
enough to accommodate evolving standards for clinical care and clinical 
judgment. We will continue to improve our processes and implementation 
of policies to address GAO and OIG findings, and ensure VHA provides 
timely high quality care to all Veterans.
    With respect to oversight and accountability, VHA restructured the 
Office of the Medical Inspector (OMI) into an integral element of VHA's 
oversight and compliance program. Responsible for assessing the quality 
of VA health care through site-specific investigations and system-wide 
assessments, OMI reports directly to the Under Secretary for Health. 
OMI's policies and procedures were revised to ensure that health care 
quality and patient safety remain a primary and constant focus.
    Concerning information technology, VA is modernizing our Electronic 
Health Record (EHR), VistA, which is the most widely used EHR in the 
United States. VA is also developing a new web based Enterprise Health 
Management Platform, or eHMP. We will continue to share health care 
data on millions of Servicemembers and Veterans with the Department of 
Defense and our community partners in compliance with all relevant 
privacy laws.
    Human capital training is critical to ensure Veterans receive safe 
care. Our frontline providers need to have effective training on VHA's 
national policies and procedures. They must also be capable of using 
VHA's tools for monitoring health care delivery. We need our training 
to empower employees and make it easy for every employee to do the 
right thing every time.
    Concerning resource needs and allocation priorities, VHA is moving 
forward with implementing an enterprise-wide planning, programming, 
budget and execution program that will ensure our medical care planning 
and prioritization drives our budget request and execution. Using this 
program, we will be able to prioritize resource needs and budget for 
effective implementation of national policies and procedures, including 
budgeting for training and human capital.
              export telemedicine from alaska to the u.s.
    Question 3.  Dr. Clancy, Alaska is home to the highest per capita 
population of veterans in the country. As of August 2014, Alaska had 
nearly 75,000 veterans, nearly one-tenth of our population. Alaska also 
is about two and half times the size of Texas, with over 663,000 sq. 
miles of area. Because of the amount of area in Alaska, my state leads 
the Nation in telemedicine and telehealth delivery, ensuring that 
Alaskan, wherever they are, receive the best quality and most cost-
effective treatment possible. In fact, one area where Alaska is 
breaking the mold where many native veterans who live in bush Alaska no 
longer have to take multiple days off to fly into Anchorage to see 
their doctor and can instead VTC with their doctor from their local 
health clinic. While I troubled by GAO's Report which cite a 9-year, 
$127 million failed attempt to upgrade the VA's scheduling software and 
an longstanding failure to integrate Electronic Health Records for VA 
and the Department of Defense, I like to see the glass a half full. In 
this case, a half full glass is that there is a lot of room for 
improvement with the right investments and a culture that is willing to 
think outside the box. Alaska's exports many things to the U.S. are 
famous, including oil., salmon, and minerals. Dr. Clancy, how can the 
VHA take what is being done in Alaskan telemedicine and telehealth and 
export it to the Lower 48?
    Response. VHA strives to continually look across all systems for 
best practices. Fortunately the Alaska VA system has been a source of 
inspiration across the VHA system in regards to telehealth and 
telemedicine. We must use the examples from the Alaska VA system to 
focus on providing care when and how the Veteran needs it.
    VHA is recognized as a world leader in the development and use of 
telehealth. More than 717,000 Veterans accessed VHA care through 
telehealth in fiscal year (FY) 2014, 45 percent of these Veterans live 
in rural or highly rural areas. The FY 2014 total for Veterans using 
telehealth represented an 18% growth from the year before. Telehealth 
services provide access to health care in more than 45 different 
specialty areas, including areas in which VHA has particular expertise 
that may not be available from the local community health care 
provider.
    The Alaska VA Healthcare System based in Anchorage has progressive 
clinical and executive leadership who maximize the use of telehealth to 
meet the specialized needs of our Veterans in Alaska. For example, 
Alaska's Veterans access VHA care through Teledermatology, Teleretinal 
imaging for annual screening for diabetic retinopathy eye disease, Home 
Telehealth for monitoring and management of chronic conditions like 
diabetes, chronic obstructive pulmonary disease, and congestive heart 
failure. Veterans in Alaska use clinical video telehealth to access 
their Primary Care Providers based in Colorado and Florida, and Patient 
Aligned Care Teams (PACT) based in Idaho at the Boise Primary Care Hub. 
The PACT multidisciplinary teams include social workers, clinical 
pharmacists, mental health and primary care providers. All of the 
Alaska VA Healthcare System's Community-Based Outpatient Clinics 
(CBOC), located in in Kenai, Fairbanks, and the Mat-Su clinic in 
Wasilla, offer telehealth services. In some instances Veterans in the 
CBOC use telehealth to access care from providers at the main Medical 
Center, and sometimes they access care from providers at another CBOC. 
Last fiscal year in Alaska more than 1,800 Veterans accessed VHA care 
through telehealth, and more than 330 Veterans benefited from Home 
Telehealth. VA's Alaska Healthcare System is able to share its most 
successful telehealth strategies with the other 150 VA medical centers 
and 800 CBOCs across the country. These best practices are conveyed 
through the 15 year old VHA Telehealth Community which uses multiple 
methods to share information including weekly Program Manager 
conference calls, monthly National Forums, quarterly newsletters, and 
annual conferences.
    The ability to collaborate with the Native Healthcare Systems, 
local community resources, and DOD has led to success in providing 
access to Alaska's Veterans. The use of telemedicine within Alaska and 
with VA facilities in other states has provided access to Veterans in 
multiple communities located across the vast Alaskan terrain. These 
relationships are crucial to ensure the health care needs of Alaska's 
Veterans are met.
    In 2011, a policy decision from VA Central Office required the 
Alaska VA to provide healthcare services within the state whenever 
available rather than transferring Veterans to VA facilities in Seattle 
or Portland for care. Each Veteran was given the option for local care 
in the private sector, or referral to other VA facilities. Only rarely 
have Veterans chosen to travel to Seattle or Portland VA for care. The 
Alaska VA Healthcare System has a strong program in place to coordinate 
private sector care. Additional staff were added to ensure coordination 
of care and that Veterans' needs were being met. For example, with the 
increase in oncology care being provided in state, the Alaska VA 
established an oncology team to ensure the requirements for care 
purchased in the community was well defined and accomplished.
    In August 2013, the Alaska VA began purchasing primary care in the 
community. This was due to high turnover and the inability to hire new 
providers despite the use of recruitment incentives. The shortage of 
primary care providers led to increased wait times for Veterans. 
Working with community providers and Native Healthcare Organizations, 
the Alaska VA was able to obtain primary care services for those 
Veterans who had been waiting the longest for care. As new Veterans 
applied for care, the Alaska VA continued to use these community 
providers to obtain timely primary care. Also, through 26 sharing 
agreements, care for Native and Non-Native Alaska Veterans living in 
rural Alaska was purchased across the state. Tanana Chief Conference in 
Fairbanks and South Central Foundation in Mat Su Valley have the 
largest number of Veterans receiving primary care at their facilities. 
In addition, VA entered into contracts with multiple private sector 
healthcare organizations in order to meet the access requirements of 
Veterans. Staff members were assigned to function as liaisons with 
specific community providers. Positive feedback has been received from 
Veterans referred to these organizations. There is ongoing 
communication across multiple levels of the Alaska VA -from Executive 
leadership to frontline staff. Extensive care coordination between VA 
and these community healthcare organizations is required and a 
continual VA presence to ensure continuity of care and issue 
resolution. That continuity is provided through VHA's Integrated Care 
Service. Due to the large number of Veterans referred to South Central 
Foundation (SCF) in the Mat Su Valley, several VA employees are 
assigned to work with SCF to ensure consults are managed efficiently 
and appropriate medical record information is exchanged. To ensure 
ongoing communication, planning and conflict resolution is critical for 
the Alaska VA Chief of Staff and the Chief of the Chief of Integrated 
Care Services. These relationships have developed over several years of 
frequent interactions, face-to-face dialog and understanding of 
cultural sensitivities.
    Another important component of the Alaska VA Healthcare System's 
success is the establishment of a robust rural outreach team made up of 
administrative and clinical staff. This group has ongoing contact with 
rural communities including tribal leaders, healthcare organizations, 
community elders and Veterans. Over 200 volunteers have been trained as 
Tribal Veteran Representatives and function as liaisons between VA, 
Veterans, and rural health organizations.
    The Alaska VA also has a sharing agreement with the 673rd DOD/VA 
Joint Venture hospital in Anchorage for emergency care, urgent care, 
and inpatient care to include Intensive Care unit. By using the 
military resources as a right of first refusal for specialty care, the 
sharing of health care resources provides VA a cost effective resource 
for specialty care needs.
    In addition, teleprimary care providers located in Boise, ID; Bay 
Pines, Florida; and Denver, Colorado are used to provide care for 
Anchorage Veterans. This augments care and serves as a bridge during 
provider shortages. Veterans receiving teleprimary care have expressed 
high levels of satisfaction with the care received.
           alaskan wait time success and translating further
    Question 4.  Dr. Clancy, in figures recently compiled by the 
Associated Press showing a snapshot of in time wait time information 
for 940 VA hospitals and outpatient clinics nationwide, the shows that 
``an average of less than 1 percent of completed appointments at the 
Anchorage outpatient clinic--0.90 percent--involved delays of at least 
31 days from the veteran's preferred appointment date during that 
period. In fact, averages were lower at facilities in Wasilla, 
Fairbanks and Kenai.'' Nationally, about 2.8 percent of completed 
appointments involved delays of more than 30 days. In sum, Alaska has 
less than 1% of veterans waiting over 30 days when over 20% of the 
state's population lives in rural areas, many of which are hundreds of 
miles from VA facilities. Can the VHA use some of what is being done in 
the Alaska VA system and use it as a model to help other areas of the 
U.S.? What specific lessons can be learned from Alaska?
    Response. A primary strength of the Alaska VA Healthcare System is 
its success in establishing strong relationships with community 
providers. Through these relationships VA is able to provide 
accessible, timely, coordinated, and high quality care for Veterans. VA 
community providers include DOD and the Native Healthcare 
Organizations, as well as multiple community providers and smaller 
health care systems across the state. The ability of the Alaska VA 
System to use purchased care is based upon the knowledge that 
relationship-building and open communication are the key to instill a 
common mission and shared vision among all providers and stakeholders. 
To strengthen relationships in the community, the Alaska VA Healthcare 
System will assign specifically trained VA staff to work with the 
provider's health care facility, thereby encouraging frequent face-to-
face contact and close communication. Open dialog engenders mutual 
trust and empathy, promoting a shared mission with a focus on ICARE 
values, which then can be better actualized by community providers as 
well by the health care team at the VA facility. This ``one standard of 
care for all Veterans'' concept is an expectation of all community 
providers of the Alaska VA Healthcare System and promotes excellent 
access, continuity, and care coordination. Positive feedback has been 
received from Veterans, whether receiving care in the community or at 
their VA facility. Seamless integration of care between VA and 
community providers, facilitated by a strong foundation of trust and a 
sense of shared mission, enables the Alaska VA to provide the needed 
care for Veterans efficiently and effectively.
    The Alaska VA's approach has important implications for VA care at 
sites in other states. A close and transparent network between the VA 
and surrounding community health care providers can improve access, 
continuity, care coordination and overall quality of care. VA and 
community health care networks can be best created through proactive 
efforts to facilitate close communication and relationship building. 
VHA anticipates and welcomes a future of close cooperation between VA 
and community health care programs. The goal is to develop a network of 
coordinated, integrated health-related services that provide seamless 
care for all Veterans.

    Question 5.  Dr. Clancy, what suggestions do you have to help 
create a culture at the VA that rewards this type of achievement--even 
incentivizes it--so that the VA and VHA do not end on the GAO's high 
risk list AND more importantly, so that our veterans get the care they 
have earned?
    Response. In order for VHA to be successful we must ensure that 
Veteran outcomes are always our priority; In order to do this, we must 
look for a uniform platform with local components that celebrates 
innovation across the organization. This is accomplished through the 
Secretaries ``MyVA'' initiative. As a part of ``MyVA'' we have begun to 
actively solicit employees to provide process improvement ideas and to 
take an active role in improving the Veteran Experience. We already 
have begun to examine how to expand Lean Concepts system wide which 
will help foster idea formation across the organization.
                        culture change at the va
    Question 6. VA and the VHA are getting beaten up a lot in the media 
and in Congress. While a lot of this aggressive oversight is justified, 
a group of people can only take so much of this type of oversight 
before they become timid and simply check the box to not get in 
trouble. That is not the type of culture we want at the VA.
    What suggestions do you have to improve the culture at the VHA and 
the VA as a whole?
    Response. The Blueprint for Excellence lays the framework for 
improvement of the culture of VA, and provides a positive vision for 
employees. Recent shortcomings of VHA performance highlight the 
importance of reconnecting leadership and staff to VA's mission and the 
expressed values of the organization, as a basis for cultural 
transformation. In addition to creating a positive and ``Veterans-
first'' culture of service in VA, this vision seeks to improve Veteran 
services by building an environment of continuous learning, facilitated 
by responsible risk-taking and balanced by personal integrity and 
constructive, sustainable accountability. Such an environment 
reinforces a culture of doing right by the Veteran every time.

    Question 7.  What suggestions to do you have actually encourage 
innovation and new ideas?
    Response. The Secretary has emphasized that the best ideas come 
from those who are closest to the problem. This led to the development 
of the ``MyVA'' initiative. This initiative will reorient VA around 
Veterans' needs and empower employees to assist by delivering excellent 
customer service to improve the Veteran's experience. ``MyVA'' actually 
works to identify best practices to amplify issues and develop 
solutions. We must combat non-productive activity and waste, such as 
production defects, overproduction, waiting, underutilization of 
talent, excess motion, and extra processing. Supported by senior 
managers and leaders, front-line workers through mid-level management 
staff will be recruited to identify opportunities for innovation 
throughout their work areas. The ``MyVA'' brings together all members 
of the organization focused on continued learning and working to ensure 
state-of-the-art care for our nations Veterans.
    VA leadership has been instructed to continue to seek feedback and 
ideas from Veterans, employees, community partners and stakeholders 
through the use of town hall forums. In addition, we have instituted 
the ''MyVA Idea House;'' an intranet web tool, where employees from 
across VA can submit ideas online to improve services, streamline 
processes and solve issues for Veterans and their families.

    Question 8.  What authorities can Congress give you to help these 
innovations and ideas cut through the existing VA and VHA 
bureaucracies?
    Response. Congress has been extremely helpful as we continue to 
work to transform VA's organizational culture and become the VA that 
our Veterans want and deserve. We look forward to working with Congress 
to help us fill needed personnel shortages across our system. Also, by 
helping us to get the message out that VA has a laudable mission and is 
a great place to work.

    Question 9.  How can we create excellence at the VA?
    Response. We can create excellence in the VA by continually looking 
for ways to improve our system and by putting the Veterans Experience 
principal in all we do.
    We must recruit and retain the best and brightest and give them the 
tools necessary to provide the very best care possible to our nations 
Veterans who have earned it. We also must seek to learn from mistakes 
and prevent reoccurrence.

      

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