[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                ASSESSING VA'S RISKS FOR DRUG DIVERSION

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

                                 HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE
                                 
                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                       MONDAY, FEBRUARY 27, 2017

                               __________

                            Serial No. 115-4

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
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                     COMMITTEE ON VETERANS' AFFAIRS

                   DAVID P. ROE, Tennessee, Chairman

GUS M. BILIRAKIS, Florida, Vice-     TIM WALZ, Minnesota, Ranking 
    Chairman                             Member
MIKE COFFMAN, Colorado               MARK TAKANO, California
BRAD R. WENSTRUP, Ohio               JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American    ANN M. KUSTER, New Hampshire
    Samoa                            BETO O'ROURKE, Texas
MIKE BOST, Illinois                  KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine                J. LUIS CORREA, California
NEAL DUNN, Florida                   KILILI SABLAN, Northern Mariana 
JODEY ARRINGTON, Texas                   Islands
JOHN RUTHERFORD, Florida             ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana              SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto 
    Rico
                       Jon Towers, Staff Director
                 Ray Kelley, Democratic Staff Director

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                    JACK BERGMAN, Michigan, Chairman

MIKE BOST, Illinois                  ANN MCLANE KUSTER, New Hampshire, 
BRUCE POLIQUIN, Maine                    Ranking Member
NEAL DUNN, Florida                   KATHLEEN RICE, New York
JODEY ARRINGTON, Texas               SCOTT PETERS, California
JENNIFER GONZALEZ-COLON, Puerto      KILILI SABLAN, Northern Mariana 
    Rico                                 Islands

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
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unintentional errors or omissions. Such occurrences are inherent in the 
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                           C O N T E N T S

                              ----------                              

                        Monday, February 27 2017

                                                                   Page

Assessing VA's Risks For Drug Diversion..........................     1

                           OPENING STATEMENTS

Honorable Jack Bergman, Chairman.................................     1
Honorable Ann Kuster, Ranking Member.............................     2

                               WITNESSES

Carolyn Clancy, M.D., Deputy Under Secretary For Health For 
  Organizational Excellence, Veterans Health Administration, 
  Department Of Veterans Affairs.................................     4
    Prepared Statement...........................................    26

        Accompanied by:

    Michael A. Valentino, R.Ph., MHSA, Chief Consultant, Pharmacy 
        Benefits Management Services, Veterans Health 
        Administration, Department of Veterans Affairs

Mr. Nick Dahl, Deputy Assistant Inspector General for Audits and 
  Evaluations,VA Office of Inspector General.....................     6
    Prepared Statement...........................................    30

        Accompanied by:

    Emorfia Valkanos, R.Ph., Health Systems Specialist, Office of 
        Healthcare Inspections, VA Office of Inspector General

Mr. Randall B. Williamson, Director, Healthcare Team, U.S. 
  Government Accountability Office...............................     8
    Prepared Statement...........................................    33

Keith Berge, M.D., Consultant in Anesthesiology, Chair, Mayo 
  Clinic Enterprise-wide Medication, Diversion Prevention 
  Committee, Mayo Clinic.........................................     9
    Prepared Statement...........................................    38

                       STATEMENTS FOR THE RECORD

Jeffrey Plagenhoef, M.D., President, American Society of 
  Anesthesiologists..............................................    39
Letter From: Michael J. Missal - Reponse to Question.............    41

 
                ASSESSING VA'S RISKS FOR DRUG DIVERSION

                              ----------                              


                       Monday, February 27, 2017

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                      Subcommittee on Disability Assistance
                                      and Memorial Affairs,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to notice, at 3:30 p.m., in 
Room 334, Cannon House Office Building, Hon. Jack Bergman 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Bergman, Bost, Poliquin, Dunn, 
Arrington, and Kuster.
    Also Present: Representatives Roe and Walz.

          OPENING STATEMENT OF JACK BERGMAN, CHAIRMAN

    Mr. Bergman. Good afternoon. This hearing will come to 
order. I want to welcome everyone who has joined us today.
    Today, we will address the lack of oversight and internal 
controls regarding controlled substances within the Veterans 
Health Administration that leave facilities open to drug 
diversion and veteran harm.
    The diversion of drugs from VA health care facilities is an 
incredible patient safety issue that puts veterans, VA 
employees, and the public at tremendous risk. Unfortunately, 
the news has recently been filled with story after story of 
drug diversions within VA.
    In Little Rock, Arkansas, a VA pharmacy technician 
reportedly used his access to medical supplies Web sites to 
order and divert 4,000 oxycodone pills, over 3,000 hydrocodone 
pills, and more than 14,000 Viagra and Cialis pills, at the 
cost to the VA of more than $70,000. This technician was 
allegedly selling these drugs on the street, where they had a 
value of more than $160,000.
    At a VA facility in Florida, a registered nurse was 
apparently stealing oxycodone and hydromorphone from the 
hospital to feed her addiction. Keep in mind, these are 
medications that should have been going to veterans for their 
care.
    These issues are, in part, a result of VA having inadequate 
procedures in place to safeguard against theft and diversion of 
controlled substances. A recent Government Accountability 
Office audit requested by this Committee found that one VA 
medical center missed 43 percent of the required monthly 
inspections, mostly in critical care areas such as the 
operating room and the intensive care unit. In addition, three 
other facilities did not follow all of VHA's requirements for 
inspections of controlled substances.
    This is not the first instance where weaknesses were 
identified in VA's controlled substance inspection program. In 
2009 and 2014, the VA Office of Inspector General found that 
some medical facilities were not conducting monthly inspections 
and some inspections were incomplete. VA has been given 
multiple opportunities to address these concerns. This leaves 
me wondering what VA is doing to repair the lax oversight and 
apparent absence of accountability regarding these issues 
within VHA.
    To make matters worse, there are also issues with drug 
testing employees to ensure that they are suitable to provide 
care to our veterans. A 2015 Office of Inspector General report 
found that VA Medical Centers were not conducting preemployment 
and random drug tests for testing-designated positions in many 
instances across VHA, which amounted to tens of thousands of 
employees not receiving drug tests required by the Drug-Free 
Workplace Program.
    Most recently, in January 2017, the OIG found high backlogs 
in background checks, to include drug testing, for high-risk 
positions at the Atlanta VA Medical Center.
    It is precisely these tools that have been put into place 
to help protect patients and health care organizations from 
drug diversions and harm. However, VA does not seem to be 
taking them as seriously as it should.
    Based on the oversight reports and numerous diversion 
incidents we will discuss today, I am concerned that VA's 
controlled substance oversight program is not working and that 
staff who fail to follow proper procedures are not being held 
accountable for violations.
    In case after case, what we see are examples of drugs being 
diverted for personal use or personal gain, yet there does not 
seem to be much progress made by the VA to correct the glaring 
problems that allow it to happen.
    What is even more concerning is that the programs to help 
deter diversion or identify illegal employee drug use are not 
being implemented consistently within the VA health system. We 
are in the midst of an opioid epidemic, and it's time for VA to 
start making effective changes to avoid putting veterans and 
the employees who serve them at risk.
    With that, I recognize Ranking Member Kuster for her 
opening statement.

        OPENING STATEMENT OF ANN KUSTER, RANKING MEMBER

    Ms. Kuster. Thank you, Mr. Chairman.
    And thank you for choosing this topic. I am particularly 
interested, as the cochair, the founding cochair, of our 
congressional Task Force to Combat the Heroin Epidemic. I 
appreciate this testimony.
    This afternoon, we are again examining VA's role in 
ensuring that prescription drugs are safely controlled in VA 
medical facilities.
    Less than a year ago, former Chairman Kaufman and I held a 
hearing of the O&I Subcommittee on this very issue in Colorado 
because the Drug Enforcement Agency, DEA, found several 
violations in the Denver VAMC. We continue to hear disturbing 
reports in hospitals and clinics, in our communities, that some 
health care employees are stealing controlled substances for 
their own personal use or personal gain. We know that these 
cases are on the rise throughout the country.
    One health care employee diverting controlled substances 
can be a serious public health risk and can cause significant 
harm to many patients. We learned this lesson the hard way in 
New Hampshire with the technician who was injecting himself 
with fentanyl at a hospital in Exeter, New Hampshire. But it 
turned out this had started at the Baltimore VA Medical Center 
and continued in more than a dozen hospitals in other States, 
infecting up to 50 patients in our community with Hepatitis C, 
and some of these patients were veterans.
    From this example, it is clear that the nationwide trend of 
opiate diversion also impacts our VA. The VA health system is 
one of the Nation's leading prescribers of opioid medication. 
Diversion in the VA threatens the safety of veterans and 
hampers efforts to address the opioid epidemic in our 
communities. Preventing diversion of these substances should be 
a paramount concern.
    That's why I find the GAO and IG's findings particularly 
troublesome. It's unacceptable that some VA medical facilities 
are not conducting routine inspections to prevent and identify 
drug diversion. Background investigations that could 
potentially identify employees who have diverted drugs or who 
may have a drug/substance-use problem were backlogged in 
Atlanta. Healthcare employees at the Atlanta Medical Center 
were not subject to drug testing for 6 months, which could 
identify diversion of prescription drugs.
    We need to get to the bottom of why these safeguards and 
processes are not being followed. I want to know if the 
procedures when followed would work to prevent drug diversion. 
I want to know if VA has the resources it needs to conduct the 
inspections, the background checks, and to administer its Drug-
Free Workplace Program.
    I am also concerned about the VA hiring freeze that is 
currently in place and that VA HR employees are not exempt. The 
GAO and IG identified that staff need more personnel and more 
training to properly conduct these inspections. They also 
identified the need for more HR personnel to address the 
background-check backlog in Atlanta. Without adequate support 
staff in place, VA medical facilities will continue to struggle 
to comply with the procedures and programs that they must 
follow to ensure that our veterans receive safe care.
    Finally, I look forward to learning about progress at the 
VA with regard to the Opioid Safety Initiative that we passed 
within CARA, the Comprehensive Addiction and Recovery program, 
just last year to bring down the rate of opioid prescriptions 
for all of our veterans. We must do everything we can to help 
veterans suffering from chronic pain and to help veterans 
struggling with substance abuse and addiction.
    The opioid epidemic is destroying the lives of veterans and 
their families in communities across New Hampshire and all 
across the country, and we need to work together to find 
innovative solutions to end this epidemic. As I say to my 
colleagues, heroin does not choose R's and D's. We can work 
together. We are proud champions of the Comprehensive Addiction 
Recovery Act that we passed last Congress, and I look forward 
to hearing about VA compliance.
    Thank you, Chairman Bergman, and I yield back.
    Mr. Bergman. Thank you, Ranking Member Kuster.
    I ask that all Members waive their opening remarks, as per 
this Committee's custom.
    With that, I welcome our first and only panel, who is now 
seated at the witness table.
    On the panel, we have Dr. Carolyn Clancy, Deputy Under 
Secretary for Health for Organizational Excellence. She is 
accompanied by Dr. Michael Valentino, Chief Consultant for the 
Pharmacy Benefits Management Services of the Veterans Health 
Administration.
    We also have Mr. Nick Dahl, Deputy Assistant Inspector 
General for Audits and Evaluations. He is accompanied by Ms. 
Emorfia Valkanos, Health Systems Specialist for the Office of 
Healthcare Inspections in the Office of the Inspector General.
    Finally, we have Mr. Randall Williamson, the Director of 
the Healthcare Team for the Government Accountability Office; 
and Dr. Keith Berge, Consultant in Anesthesiology and Chairman 
of the Mayo Clinic Enterprise-Wide Medication Diversion 
Prevention Committee.
    I ask that the witnesses please stand and raise your right 
hand.
    Do you solemnly swear, under penalty of perjury, that the 
testimony you are about to provide is the truth, the whole 
truth, and nothing but the truth?
    Please be seated.
    Let the record reflect that all witnesses have answered in 
the affirmative.
    Dr. Clancy, you are now recognized for 5 minutes.

               STATEMENT OF CAROLYN CLANCY, M.D.

    Dr. Clancy. Good afternoon, Chairman Bergman, Ranking 
Member Kuster, and Members of the Subcommittee. Thank you for 
the opportunity to discuss oversight of controlled substances 
and the Drug-Free Workplace Program at VA facilities. I will 
address inspections to minimize diversion, drug testing for 
selected employees, and our commitment to accountability for 
employees who do not live up to our core values.
    I am accompanied today, as you mentioned, by Mike Valentino 
from Pharmacy Benefits.
    GAO's recently released report on medical facility 
controlled substance inspection programs in four of our 
facilities has prompted a swift response. We concurred with 
GAO's six recommendations and are now implementing them. Expect 
them to be fully implemented by October of this year. We 
conducted a conference call last week with over 450 field-based 
staff to launch the action plans and to provide tools that 
support that effort, followed by distribution of written 
instructions. Additional dissemination efforts are planned over 
the next 2 weeks.
    Although GAO and VA Inspector General identified selected 
instances of noncompliance with these robust controls, I 
believe the system is working as designed to make it difficult 
for VA staff to divert drugs and, most importantly, to give us 
the tools to be able to detect diversion rapidly and take 
action when it does occur.
    VHA implemented robust controlled substance internal 
controls in the early 1980s. In many cases, these measures 
exceed those required by the Controlled Substances Act, and we 
believe they align closely with Mayo Clinic's recommended best 
practices.
    Data from January 2nd of 2014 through March 11th of 2016 
show that VA's reported controlled substances loss rate is 
0.008 percent, or 8 per 100,000. And it is VA's very own 
internal controls that lead to the vast majority of diversion 
cases being identified.
    The use of illegal drugs by VA employees is inconsistent 
with the special trust placed in those who care for veterans.
    The Inspector General recently reviewed allegations at the 
Atlanta VA Medical Center of a backlog of unadjudicated 
backgrounds investigations and found that mandatory drug 
testing of new hires did not occur over a 6-month period, 
resulting in a backlog of about 200 background investigations. 
It was also found that the Drug-Free Workplace Program was not 
administered from November of 2014 to May of 2015.
    Atlanta VA leadership implemented a number of changes in 
2016 in response to these recommendations, such as moving the 
human resources department under the direct supervision of the 
Medical Center director and developing a secondary database for 
staffing and tracking all background investigations.
    We expect that that backlog will be cleared by the end of 
this March, and, if not, we'll keep you informed.
    In addition, VA has made great strides towards improving 
the Drug-Free Workplace Program. In October 2015, drug program 
coordinators began certifying on a monthly basis that employees 
selected for random drug testing were tested, when they were 
tested, or why they were not tested.
    The VA is also developing procedures to ensure the drug-
testing coding of employees in approximately 180,000 testing-
designated positions is accurate and complete. On March 1st of 
2016, the Assistant Secretary For Human Resources and 
Administration published a memorandum stating that 100 percent 
of all applicants tentatively selected for appointment to a 
testing-designated position be drug tested prior to 
appointment.
    VA works closely with local, State, and Federal law 
enforcement entities to identify specific geographic areas with 
reported mail losses, and VA's identification of loss clusters 
has led to successful arrests, prosecutions, and convictions. 
VA has developed a culture of controlled substance loss 
reporting and has adopted a practice of over- rather than 
underreporting suspected cases of diversion.
    Mr. Chairman, I am proud of the health care our facilities 
provide to our veterans, including prescription drug services. 
The issues we're discussing here today are closely related to 
our Nation's overarching struggle with opioid use. As a whole, 
our Nation needs to come up with a better alternative to pain 
management than opioids.
    VA is at the forefront of this challenge with our Opioid 
Safety Initiative, which we pioneered in August of 2013. We are 
actively reducing the number of opioids we prescribe and the 
number of veterans receiving these prescriptions. Instead, 
we're offering a variety of complementary and integrative 
medicine treatments for chronic pain, such as chiropractic and 
acupuncture, among many other options. Initiatives like these 
will reduce the number of controlled substances VA prescribes, 
making it easier to maintain their oversight.
    With support from Congress, we look forward to continuing 
to improve our oversight of controlled substances and Drug-Free 
Workplace Programs, which will further improve the care of our 
veterans and the care that they deserve.
    Thank you for the opportunity to testify, and I look 
forward to your questions.

    [The prepared statement of Carolyn Clancy appears in the 
Appendix]

    Mr. Bergman. Thank you, Dr. Clancy.
    Mr. Dahl, you are now recognized for 5 minutes.

                     STATEMENT OF NICK DAHL

    Mr. Dahl. Mr. Chairman, Ranking Member Kuster, and Members 
of the Subcommittee, thank you for the opportunity to testify 
today on the Office of Inspector General's work related to the 
Drug-Free Workplace Program and the oversight of controlled 
substances at VA facilities.
    I am accompanied by Emorfia Valkanos, who is a member of 
the OIG's Healthcare Inspection staff in Manchester, New 
Hampshire, and is also a former VA pharmacist.
    The Federal Drug-Free Workplace Program was initiated with 
the goal of establishing a drug-free Federal workplace. The 
program made it a condition of employment for all Federal 
employees to refrain from using illegal drugs on or off duty. 
VA has designated safety-sensitive occupational series as 
testing-designated positions, including positions such as 
physicians, nurses, police officers, and motor vehicle 
operators.
    In recent years, the OIG has completed two projects that 
assessed aspects of the Drug-Free Workplace Program. In March 
2015, the OIG issued a report detailing the results of an audit 
of VA's program. We identified program weaknesses in three 
areas.
    First, preemployment applicant drug testing. If a tested 
applicant has a verified positive test result, VA should 
decline extending a final offer of employment. However, we 
reported that VA did not ensure compliance with policy to drug 
test all applicants selected for a testing-designated position 
prior to appointment. Instead, VA selected only about 3 of 
every 10 applicants for testing.
    Second, employee random drug testing. We estimated VA 
achieved a national drug-testing rate of 68 percent of 
employees selected for random drug testing in fiscal year 2013. 
In our review of 22 randomly selected facilities, we found 4 
facilities did not test any randomly selected employees, 10 had 
compliance rates ranging from 31 to 89 percent, while the 
remaining 8 facilities tested at least 90 percent of their 
randomly selected employees.
    We also estimated at least 9 percent of about 206,000 
employees in testing-designated positions were not subject to 
the possibility of random drug testing because they were not 
properly coded with a drug test code in VA's personnel system. 
Those not subjected to random drug testing included physicians, 
nurses, and addiction therapists.
    Finally, reasonable-suspicion drug testing. We reported VA 
lacked sufficient oversight practices to monitor whether 
facilities referred all employees with a positive drug test 
result to the Employee Assistance Program.
    Based on our work, we determined VA's program was not 
accomplishing its primary goal of ensuring illegal drug use was 
eliminated and VA's workplace was safe. We made five 
recommendations, and, as of today, one recommendation remains 
open.
    A more recent report focused on human resources issues at 
the Atlanta VA Medical Center. During this review, we 
substantiated an allegation that there was no drug testing of 
employees in testing-designated positions for at least 6 months 
in 2014 and 2015. Despite the lack of drug testing for 6 
months, we found no indications VA management at either the 
local or the national level was aware of the lapse.
    Because no drug testing occurred, the Atlanta VA Medical 
Center lacked assurance that employees who should have been 
subject to drug testing during this period remained suitable 
for employment. We made two recommendations focused on the 
Drug-Free Workplace Program, and VA reported they have taken 
action on these recommendations.
    VA also requires that managers at VHA facilities ensure 
that a controlled substances inspection program is implemented 
and maintained. The OIG has reviewed VA's management of 
controlled substances during our combined assessment program 
reviews. We rolled up the results of our work in June 2014, and 
GAO references that work in their recent report.
    The OIG also has a vigorous investigative program related 
to drug diversion. We primarily focus on three categories: 
first, the diversion of controlled and noncontrolled substances 
by VHA employees. The diversion of drugs by health care 
providers for personal use is a serious issue that the OIG 
diligently pursues.
    Next, the diversion of controlled substances and 
noncontrolled substances for illegal distribution, which 
involve cases where VA pharmaceuticals are diverted or stolen 
for the purpose of illegal sale.
    Also, the diversion of controlled substances by a theft of 
mailed pharmaceuticals. Our investigations have revealed mailed 
pharmaceuticals are vulnerable to theft at any point in the 
process, with the most common occurrence being theft by 
employees of the mail carrier.
    In conclusion, the OIG has provided crosscutting oversight 
of the Drug-Free Workplace Program and controlled substances 
inspections through our audits and inspections. This oversight 
is necessary to ensure VA takes the steps necessary to reduce 
risks to the safety and well-being of veterans and VA employees 
by having and following proper program controls. We also 
actively investigate drug diversion and seek prosecution for 
those engaged in drug diversion.
    Based on our work in recent years, we have concluded VA 
lacked reasonable assurance that it is achieving a drug-free 
workplace and adequately securing controlled substances.
    Mr. Chairman, this concludes my statement. We would be 
happy to answer any questions that you or other Subcommittee 
Members may have.

    [The prepared statement of Nick Dahl appears in the 
Appendix]

    Mr. Bergman. Thank you, Mr. Dahl.
    Mr. Williamson, you are now recognized for 5 minutes.

               STATEMENT OF RANDALL B. WILLIAMSON

    Mr. Williamson. Thank you, Chairman Bergman and Ranking 
Member Kuster and Members of the Subcommittee.
    The increase in the prescribing and use of opioids over the 
last two decades, sometimes referred to as the opioid 
explosion, has brought with it the need for medical facilities 
to undertake efforts to prevent diversion of opioids and other 
controlled substances by facility employees for their own 
personal use.
    Diversion of controlled substances can compromise patient 
treatment, can be costly to the facility, and can cause harm in 
our communities for those that are the recipients of illegally 
obtained controlled substances.
    I am here today to discuss our recent report on VHA's 
efforts to prevent diversion of opioids and other controlled 
substances through its controlled substance inspection 
programs.
    All VA medical facilities that store and dispense 
controlled substances are required to undertake monthly 
inspections of all areas within the facilities that are 
authorized to have controlled substances.
    Each facility director is responsible for overseeing the 
inspection program and appointing a coordinator to manage the 
program and inspectors who conduct the inspections. Usually, 
both the coordinators and the inspectors have other 
responsibilities within each facility and work part-time on the 
inspection program. The coordinator is responsible for ensuring 
that monthly inspections are conducted and for submitting 
reports to the facility director summarizing inspections and 
any trends.
    We found that the program was not being managed according 
to VHA policy and needed improvement in certain areas.
    First, monthly inspections are not always being conducted 
as required. We visited four VA medical facilities across the 
country and found that, over a 14-month period, one facility 
missed 43 percent of the required inspections while another 
missed 17 percent. The operating rooms in one facility, for 
example, were not inspected at all because we were told that 
the inspectors needed to arrive before or after normal 
operating room hours and could not do so because of their 
conflicting work schedules.
    Second, when conducting the inspections, facility 
inspectors did not always follow VHA policy requirements, as 
was the case for three of the four facilities we visited. For 
example, inspectors don't always verify that controlled 
substances have been properly transferred from pharmacies to 
automated dispensing machines in patient care areas; or 
inspectors didn't always count all of the controlled substances 
stored in patient care areas.
    Third, we found that local written inspection procedures 
were not fully consistent with VHA policy requirements. We 
found this problem at three of the four hospitals we visited.
    These three weaknesses increased the risk of diversion at 
VA facilities.
    We found that many of these problems were allowed to 
happen, in part, due to poor oversight at the facility and 
network levels. Facility directors at two of the four 
facilities we visited did not consistently perform their 
oversight responsibilities for the inspection program, which 
include reviewing monthly inspection reports and implementing 
corrective actions if missed inspections or other problems are 
identified.
    Also, we found that two of the four network managers who 
had oversight responsibilities for the medical centers we 
visited did not review facilities' quarterly trend reports, as 
required. The controlled substance inspection coordinator is 
required to prepare and submit these quarterly reports based on 
trends identified in the monthly inspections.
    Further, one of the two networks that actually did review 
the quarterly trend reports took no action to ensure that one 
of the facilities in our review that had not prepared quarterly 
trend reports had a corrective action plan to do so in the 
future.
    Aside from the oversight weaknesses, we found that there is 
limited training for coordinators to better ensure that they 
have a complete and detailed understanding of VHA's inspection 
procedures.
    Finally, two of the facilities we visited had backup 
coordinators to help manage the inspection process and complete 
inspections when the primary coordinator or inspectors could 
not carry out their responsibilities because of pressing job 
duties or unforeseen circumstances. We recommended that VA 
adopt this type of practice systemwide, and VA concurred. VA 
also concurred with our five other recommendations to improve 
the process and provide better oversight.
    This concludes my opening remarks.

    [The prepared statement of Randall B. Williamson appears in 
the Appendix]

    Mr. Bergman. Thank you, Mr. Williamson.
    Dr. Berge, you are now recognized for 5 minutes.

                 STATEMENT OF KEITH BERGE, M.D.

    Dr. Berge. Chairman Bergman, Ranking Member Kuster, and 
Members of the Subcommittee, thank you for the opportunity to 
speak with you today about drug diversion from the health care 
workplace. Such diversion is a crime that endangers all 
patients, health care employers, coworkers, and even endangers 
the diverters themselves.
    While we have long known of these hazards of patients being 
deprived of pain medication by diversion, only fairly recently 
has the grave risk to extremely vulnerable patients been 
revealed by outbreaks of disease, such as blood poisoning by 
bacteria or viruses that have been transmitted by drug 
diverters swapping syringes in the commission of their crimes. 
In the process, many patients have been infected with 
potentially fatal illnesses.
    I have attached for your review a paper authored by the CDC 
investigators outlining six such outbreaks over a 10-year 
period that resulted in illness and death in patients.
    One of these diversion infection scenarios included 
Veterans Affairs patients being exposed to a diverter that 
communicated his hepatitis C infection to approximately 50 
patients. This individual was referred to earlier in the 
introduction comments. This diverter was a radiation 
technologist who traveled the country, working for multiple 
employment agencies. He had been fired from multiple jobs for 
diverting fentanyl for his own use, but by simply lying about 
previous terminations on job applications and in the absence of 
a national registry of radiation technologists, he had no 
trouble finding employment.
    In the darkened invasive radiology suites, he would swap 
fentanyl syringes on the anesthesia cart with ones he had 
previously used to inject himself. He would then excuse himself 
to a restroom, inject himself with the stolen fentanyl, draw up 
tap water, and repeat the process with the next patient's 
fentanyl. In this manner, he conveyed his potentially lethal 
illness to many innocent victims.
    The patients described in these eight outbreaks were all 
extremely vulnerable positions, either undergoing an invasive 
procedure while under anesthesia or while in an intensive care 
unit.
    Clearly, such behavior is unacceptable. In recognition of 
these dangers posed by diversion, the Drug Enforcement 
Administration requires stringent drug control policies and 
procedures to be put in place to protect controlled substances 
from attack across all points of the manufacturing, 
distribution, dispensing, administration, and disposal 
spectrum.
    The drugs used in the health care setting are highly 
sought-after drugs of abuse, both by addicts and by those who 
would profit richly from the sale of stolen drugs. Experience 
at the Mayo Clinic and elsewhere has shown the necessity of 
having robust surveillance, detection, investigation, and 
intervention programs in place in order to minimize the risk to 
all involved.
    While it will impossible to completely eliminate drug 
diversion from the health care workplace, it is imperative that 
robust systems rapidly detect and halt such activity. I have 
attached for your review an article from the Mayo Clinic 
authors, myself included, which outlines our program from its 
inception through its very successful implementation.
    While we continue to try to improve our system, it has 
proven quite effective in identifying a host of drug diverters 
since implementation 7 years ago. Diverters come from diverse 
backgrounds and include physicians, pharmacists, pharmacy 
techs, nurses, nursing students, nursing assistants, janitors, 
patients, patient family members, nursing home attendants, 
hospice workers, and strangers off the street.
    These stories are incredible, but they all point to the 
powerful draw that these drugs have over addicts. As such, it 
is not good enough to merely have effective policies and 
procedures on the books; they must actually be rigorously 
followed.
    Diverters are generally clever and desperate, and they will 
gravitate into areas of a system where they perceive the drugs 
to be most vulnerable to attack. It therefore behooves any 
health care facility to have a reputation for being effective 
at rapidly identifying, terminating, and prosecuting drug 
diversion and drug diverters. Only by doing so can we protect 
the most vulnerable of our patients from preventable harm.
    As I've stated, this problem will never go away, so we must 
become very good at rapid intervention. Only by instituting and 
following effective antidiversion policies and procedures will 
this be possible.
    I thank the Committee for its attention to this very 
important issue and stand ready to answer any questions you may 
have. Thank you.

    [The prepared statement of Keith Berge appears in the 
Appendix]

    Mr. Bergman. Thank you, Dr. Berge.
    The written statements of those who have just provided oral 
testimony will be entered into the hearing record.
    Mr. Bergman. We will now proceed to questioning.
    Dr. Clancy, in your testimony, you state that the VA 
performs an actual count of all controlled substances every 72 
hours. Who performs these counts, and who oversees that these 
counts actually occur at each facility?
    Dr. Clancy. So what I saw when I made a more or less 
unannounced visit to the D.C. VA last week is that pharmacy 
techs who are working in the vault are doing that, and they are 
double counting as they're doing it. So, in other words, there 
are two assistants who are each verifying, because counting a 
lot of pills is prone to missing one and so forth. And that is 
further verified by a supervisor.
    Mr. Bergman. Given the weaknesses identified by the OIG and 
more recently by GAO, how can VA central office be sure that 
these counts are taking place and that they are accurate? You 
observed one.
    Dr. Clancy. Yes. Well, I think that Dr. Berge just said it 
well. We have very good policies in place, but it's very 
important that they are rigorously followed. So we are 
exploring right now how we might do some backup audit to make 
sure that those policies are followed.
    As I mentioned in my opening, we actually have already 
disseminated written statements to the field. I would be happy 
to make a copy of that memo available for the record or just 
for your interest.
    But, again, it's very, very important to know that this 
actually happens, that our aspirations are as good as what 
we're delivering on.
    Mr. Bergman. Thank you.
    Dr. Clancy, how many cases of drug diversion has the 
Controlled Substance Inspection Program identified in the last 
2 years?
    Dr. Clancy. So what I have here is a poster, which we could 
make available to the Committee--Mike, if you could just turn 
that around--of controlled substance losses by type.
    So the data that we looked at specifically goes from 
January 2nd of 2014 to March 11th, I believe, of 2016. What you 
see is that 91.4 percent of these losses occur outside our 
facility in the mail system. And that leaves about 1.5 percent, 
I believe, from employees internally.
    But, again, this is something that we're checking all the 
time. And if there's any question whatsoever, VA police are 
engaged, as well as the Inspector General's Office, and they've 
been most helpful.
    Mr. Bergman. And of those losses that occurred at VA 
facilities outside of the loss in the postal, will you be able 
to provide the Subcommittee a list of those facilities where 
the drugs have been reported missing or stolen in the last 2 
years?
    Dr. Clancy. We would be happy to do that.
    Mr. Bergman. Okay.
    Mr. Williams, what is the role of the medical center 
directors in terms of ensuring inspections and proper 
oversight?
    Mr. Williamson. Well, they are key at the facility level 
for reviewing the monthly inspection reports, identifying any 
issues that arise, such as missed inspections, inspections that 
are not done correctly and other things that the coordinator 
reports to them. And they then are responsible for holding 
staff accountable and developing corrective action plans.
    Mr. Bergman. I see I've got about a minute left here.
    Dr. Berge, VA's Office of Human Resources Management 
reported to the OIG that they interpreted language in the VA's 
Drug-Free Workplace Handbook to require only some job finalists 
for testing-designated positions to be drug tested before being 
appointed.
    Would this be an acceptable practice in your health care 
organization?
    Dr. Berge. I believe in our health care organization we do 
post-offer-of-employment testing on all applicants.
    Mr. Bergman. And what are the consequences for hiring 
health care workers prior to drug testing or completing 
background checks?
    Dr. Berge. Well, you might be letting the fox in the 
henhouse. You might be letting somebody who would test positive 
and is, in fact, an addict into an area where they can get 
their hands on drugs.
    There's an example of that in the Denver area within about 
3 years ago. Kristen Parker, she is now spending 30 years in 
Federal prison for infecting about 36 patients with her 
hepatitis C. But, in retrospect, she was a heroin addict that 
took a job in a facility and started diverting fentanyl.
    Mr. Bergman. Thank you.
    Ranking Member Kuster, you are recognized for 5 minutes.
    Ms. Kuster. Thank you, Mr. Chair.
    Thank you to our panel. I particularly want to thank the 
GAO and the IG for their helpful reports.
    I want to focus in on evidence demonstrating we know what a 
successful drug diversion deterrence program would look like, 
and yet we continue to have this problem at various VISNs.
    My question is: Currently, the VA gives authority to the 
individual facilities to implement these inspection procedures. 
Is there any reason--and I guess this is for Dr. Clancy--why 
the VA could not streamline this process and apply one standard 
to all facilities and, in fact, have an inspection team based 
out of the central office that would go out to the VISNs?
    It seems what I'm hearing is that this is often just an 
added task. In fact, in one case, it was somebody who was a 
food services worker, that this was just an add-on. It doesn't 
seem as though we're taking it sufficiently seriously.
    And wouldn't it make more sense if we had an office of 
inspection that would then go out to the VISNs perhaps, as you 
did yourself, without advance warning and do these checks?
    Dr. Clancy. Thank you, Congresswoman. That's exactly what 
we're going to be looking into. And I think what we need to 
look at is how much of this could be done remotely, how much of 
it requires on-site presence, and, frankly, how much can we 
identify ahead of time which facilities are likely to have the 
most challenges.
    I suspect that in some instances--but we need to test 
this--we will know which facilities are more likely to be 
compliant. I guessed correctly which one was the facility in 
the GAO report based on many, many other things I knew about 
that particular facility. And I wasn't incredibly surprised by 
the distribution of the others.
    But we need to actually up our game and make sure that 
great policies are implemented consistently. There's no 
question about that.
    Ms. Kuster. And at least have consistency. What I'm curious 
about is having a system that would be consistent throughout.
    So I have got a couple minutes. I want to return to the 
issue of reducing the amount of opiate medication generally in 
the VA population. We had testimony from a medical researcher 
that, out of the 60,000 surgeries a year, 99 percent of people 
get opiate medication, and 1 in 15 will become a chronic user 
of opiates. That's what is feeding this epidemic.
    Can you talk to me more about both the program within CARA, 
encouraging VAs to reduce the use of opiate medication, or any 
other examples that you might have in the system?
    Dr. Clancy. Of course. And thank you for the question.
    I'm happy to report that we are on track for all the 
provisions in CARA. Incredibly enough, VA's portion of that is 
named for a veteran who died under our care. And I was 
literally speaking with his father yesterday, and I have been 
most impressed by the family honoring the experience of their 
son by working with us to make sure that we provide better 
care.
    VA has really been on the forefront of reducing the use of 
opioids. So, beginning in August of 2013, we've seen a 31-
percent reduction in the number of patients receiving opioids. 
We've seen a 56-percent reduction in the number of veterans who 
are receiving an opioid and another type of drug which has a 
particularly high risk for adverse reactions.
    We are doing much more frequent urine testing, because 
we're trying to minimize diversion from patients, veterans 
actually selling the drugs that they got at VA to elsewhere. So 
the right answer on a urine drug screen is positive, that 
you're actually taking the medications you received.
    We're seeing the overall dosage of opioids has decreased 
quite significantly for--and we've also seen--we have seen 
these results at a time when we've seen an overall growth in 
the number of veterans we are serving.
    I want to be clear: We're not done, and we will continue to 
monitor this. And I'm very proud of the work that we are doing 
to offer veterans alternatives to chronic pain management.
    Ms. Kuster. My time is up, but I would just say to the 
chair that, as we continue, I would love to have further 
testimony about the chronic pain programs and how we can bring 
down the use of opiate medication.
    Thank you.
    Mr. Bergman. Mr. Bost, you are recognized for 5 minutes.
    Mr. Bost. Thank you, Mr. Chairman.
    And, Dr. Clancy, I'd like to continue down that same path. 
The Ranking Member actually asked the first part of the 
question I was going to ask, but I still want to go down that. 
And that was, okay, the report from 2009 and then again in 2014 
on the weakness that the VA Controlled Substance Program had, 
now, you kind of explained what the VA central office was 
doing, but what about the VISN and at the faculty level? What 
are we doing there?
    Dr. Clancy. So every one of our networks that's a Veterans 
Integrated Service Network has a pharmacy lead there. I will 
say that it's my understanding that there's some variability in 
terms of how many other members of the team that they have. 
Many of them are quite strong in terms of reviewing facility 
reports and providing that kind of oversight. Others, it's my 
understanding, are less so. I'd be happy to provide more detail 
for the record.
    But I think that we need a very consistent approach: here's 
the facility's responsibility; here is the second line, which 
should be the network; and then central office providing what 
is sometimes referred to as the third line of defense. I'm 
quoting from, sort of, accepted practices in internal audit, 
which is an area that we have just started up within my group.
    Mr. Bost. Okay. And I know that you've been trying to do 
that since the 2014 report, but why do you suppose that when 
all of a sudden the GAO came back, many of those same 
weaknesses showed up again? What are we not doing correctly to 
move quick enough to try to deal with this?
    And it is getting to a point of epidemic, and not just in 
the VA. It's nationwide, the epidemic that we're dealing with. 
But we have to set the example.
    Dr. Clancy. I would agree. And that's precisely how we 
think of it, as setting an example.
    I think, to some extent--I believe it was Mr. Williamson 
referred to the fact that some of these coordinators have 
collateral duties. I do note that, for many of our facilities, 
anesthesia and the operating rooms tend to be areas, probably 
because of the hours, where there have been problems conducting 
inspections.
    Every facility in our system has been directed, redirected 
quite recently, to have a backup coordinator.
    My colleague from pharmacy who's here today--not Mr. 
Valentino, one of his top lieutenants--came with me the other 
day, and he noticed that maybe there was a little problem with 
not randomly conducting the inspections throughout the month. 
If you let it go till the end of the month, which is 
understandable--but, nonetheless, if, you know, stuff happens 
that week, that means you will have slipped a month and so 
forth.
    So that is the kind of thing that I think we can and will 
improve on.
    Mr. Bost. My next question is for Mr. Dahl.
    In your investigation related to the 2015 and 2017 reports, 
how many positions identified as no background check completed 
were the high-risk or the testing-designated positions? Do you 
know that?
    Mr. Dahl. Well, the 2015 report did not get into the 
background investigations. Our 2017 report, which was focused 
only on the Atlanta VA Medical Center, I wouldn't have that 
information at hand, but I'd be happy to look into that.
    Mr. Bost. Can we get a copy of that to try to figure that 
out? Because we want everyone tested, because, as you 
described, somebody at the panel did, that everyone is at risk 
with this, anyone we hire. That being said, if we're going to 
drop them into those high-risk positions, we've definitely got 
to do some backing up and making sure.
    And I'm kind of short on time here, but, Dr. Berge--and 
this is a question that I'm sure my constituents and people 
throughout this Nation are going to ask, would your health care 
organization hire a clinic professional prior to completing a 
background check?
    Dr. Berge. No.
    Mr. Bost. That's what I thought.
    Okay. What risks are associated with hiring a clinical 
staff prior to a background check?
    Dr. Berge. Well, one source of frustration is, like, when 
we are interviewing an applicant for, say, our nurse anesthesia 
school, that employment law forbids us to ask, have you been 
through treatment for chemical dependency before? Well, we have 
had such people come in that developed fentanyl addiction and 
then, in retrospect, well, they've gone through treatment for 
cocaine abuse in the past.
    So, in some ways, we're barred from asking some of those 
questions. But we would complete the post-offer-of-employment 
drug testing.
    Mr. Bost. And if I can just add, first off, let me say 
this--and I know I'm running short on time, Mr. Chairman--but 
this is an issue I've dealt with on a State level and then here 
at this level as well. The one thing we want to remember is how 
vitally important those tests are, because this disease--and it 
is a disease to be an addict.
    I had a friend that, one time, when we begged him to talk 
to us, he gave us an information, it wasn't correct, and he 
came back and said to us, what part of I'm an addict, I lie, 
don't you understand? That's why it's so vitally important to 
not only do the question but make sure that we do the followup 
checks.
    And the concern I see is the holes that are existing in the 
system. We can't have it--we want to do everything we can to 
empower you to try to stop this epidemic that is affecting--and 
it doesn't matter what your race is, what your gender is, what 
your socioeconomic status is. We've got to continue to work on 
this.
    So thank you very much.
    Mr. Chairman, I yield back.
    Mr. Bergman. Thank you.
    Mr. Walz, you are recognized for 5 minutes.
    Mr. Walz. Thank you, Mr. Chairman.
    And thank you all for being here.
    Dr. Clancy, you and I have a long history in this too. Just 
for the Committee's sake, for the new members, the first piece 
of legislation that we authored in 2008 was the pain directive 
that went to the VA to set up the step pain management. That 
was with a lot of work that came in from the folks from the 
Mayo Clinic, from Boston Scientific, and all of the best 
practices, working in conjunction with the VA. This is one of 
those issues that the seamlessness between the private sector 
and the VA is pretty strong. We all have the same issues.
    But my colleagues were getting at it, and the Ranking 
Member knows this, the fundamental issue here is pain 
management. It's in the beginning, and our Nation goes through 
these cyclical issues of issuing opioids, pulling them back, 
which creates its own problem.
    The diligence on the control side, we can always do better 
on that. And I think there's been some great suggestions there. 
But I would suggest to all of us--that program, am I right, Dr. 
Clancy, was never fully implemented? We had this discussion out 
in Tomah, Wisconsin, here about 18 months ago. Did we ever 
fully implement it before it expired?
    Dr. Clancy. I'm not sure, but I could get back to you on 
that.
    What I do know is, thanks to the new legislation that 
Representative Kuster was asking about, the CARA bill, we are 
now making sure that there is pain management expertise and 
teams accessible by all our facilities. For some of our 
facilities, that's going to be partly virtual, but, you know, 
as an integrated system, we can do that--
    Mr. Walz. But it builds on that same principle--
    Dr. Clancy. Absolutely.
    Mr. Walz [continued].--and fully implemented the same thing 
that's happening in the private sector. Because most of us 
know, as the VA goes, so goes the rest of the system in a lot 
of ways, just because of the sheer volume of this.
    How much collaboration, Dr. Clancy, do you have with, like 
Dr. Berge, experts that are out there?
    Dr. Clancy. Well, I am just meeting Dr. Berge today, 
although we have a mutual colleague friend. But we consult with 
others pretty broadly. And, in fact, when the CDC published 
their guidelines on opioids last year, they drew on expertise 
from a number of folks in the VA, including from your district. 
Because, as you said, this is all about a common health 
challenge shared by the country.
    Mr. Walz. Dr. Berge, again, thank you for being here. And 
you and your colleagues over the years have--I think the thing 
about this is to not think everything is reactive, and this 
recent opioid epidemic and the overdoses and everything else 
that come with it, that that was not a surprise to many folks 
like yourself.
    But when you said Mayo Clinic saw that you had maybe some 
holes in there, you decided to turn around, and now recognized 
as one of the best, how long did it take you to implement that 
before you saw or expected to see change?
    Dr. Berge. We were probably about a year and a half in 
creating our system. And that was in response to a tampering 
diversion that ended up on the front page of the newspaper and 
embarrassed us. We tried to work through every spot in the 
supply chain where we were vulnerable and figure out a plan to 
address that. And it takes some time to go through that 
process.
    Mr. Walz. And you have facilities--how many facilities?
    Dr. Berge. Well, we have the Midwest, the Minnesota 
facility and surrounding area. We also have Jacksonville, 
Florida, and some small surrounding area; and Scottsdale, 
Arizona, and some surrounding area.
    Mr. Walz. So the numbers, you have 50,000-plus employees, 
roughly?
    Dr. Berge. About 70,000 employees.
    Mr. Walz. About 70,000 for the entire system on that, so 
this is a big health care system that's been able to--I think 
one of the maybe frustrations--and I know it frustrates you 
too, Dr. Clancy--is sometimes the slowness of the reacting to 
these situations as the bureaucracy takes time.
    You're feeling comfortable now, Dr. Clancy, that there is, 
with the new legislation, with the emphasis on this, with the 
situations that come up that are unacceptable--and the thing 
is, as I think for many of us, we know that what's happened in 
these situations that have been brought to light are happening 
in the private sector. Our responsibility is the VA. Our 
responsibility, both from an oversight and a legal 
responsibility but also from an ethical responsibility, is to 
those veterans.
    Do you feel like it's moving quickly enough for you?
    Dr. Clancy. I'm excited by how enthusiastic our employees 
are about this. I mean, this is a national problem. I'm excited 
by the progress we've made. But we will be tracking this very, 
very closely.
    Mr. Walz. Because I get it too. They're embarrassed by 
this. We recognize that when it's not done right--the issue 
in--the surrounding areas impacted it. This is a tragic 
situation.
    I guess the news for all of us in here is we can do 
something about it and do something quickly, because we have 
that ability in the VA. And I guess I'm just looking to see 
these things maybe be implemented as quickly as we can, and I 
know you are too.
    And I thank you all for your testimony.
    Mr. Bergman. Thank you.
    Mr. Poliquin, you are recognized for 5 minutes.
    Mr. Poliquin. Thank you, Mr. Chairman, very much.
    Mr. Dahl, you're with the Inspector General's Office, 
correct, sir?
    Mr. Dahl. Yes, sir.
    Mr. Poliquin. And, Mr. Williamson, you're with the 
Government Accountability Office?
    Mr. Williamson. Correct.
    Mr. Poliquin. Okay. Great.
    You two gentlemen, please, the last 8 years or so, you've 
repeatedly reported that there's a problem with keeping track 
of the drugs at the VA facilities, making sure they're not 
stolen and sold and so forth and so on. Is that correct?
    [Nonverbal response.]
    Mr. Poliquin. Okay. So would you both conclude that we 
still have a problem?
    Mr. Dahl. I'm sorry, I missed that.
    Mr. Poliquin. Would you conclude that we still have a 
problem?
    Mr. Dahl. I would think that, based on GAO's recent work, 
that there is still an issue.
    Mr. Poliquin. Thank you.
    Dr. Clancy, you are the Deputy Under Secretary for Health 
for Organizational Excellence. What does that mean? Does that 
mean, in part, keeping track of who's got these harmful drugs 
and make sure they're not put in the wrong hands?
    Dr. Clancy. What it means is providing oversight for 
quality, for safety of care, and for integrity.
    Mr. Poliquin. Okay.
    Dr. Clancy. And integrity is about compliance with the 
stated policies.
    Mr. Poliquin. Okay. What person at the VA, Dr. Clancy, what 
one person is responsible for this problem? Who's the head 
banana?
    Dr. Clancy. That would be the Under Secretary for Health.
    Mr. Poliquin. Who's that?
    Dr. Clancy. Right now, that is someone in an acting 
position, Dr. Poonam Alaigh. You know that our Under Secretary 
was recently confirmed as Secretary.
    Mr. Poliquin. Could you spell that name for me, please?
    Dr. Clancy. A-l-a-i-g-h.
    Mr. Poliquin. Okay. And you report to that person, that 
individual?
    Dr. Clancy. What?
    Mr. Poliquin. You report to that individual. Is that 
correct?
    Dr. Clancy. Yes.
    Mr. Poliquin. Okay.
    When someone is caught, Dr. Clancy, stealing drugs and 
selling them or making them available to folks that shouldn't 
have them, like our veterans that we're working so hard to 
help, what action is taken?
    Dr. Clancy. It depends on the specifics of the 
circumstances--
    Mr. Poliquin. Do you call the cops?
    Dr. Clancy. Yes.
    Mr. Poliquin. You do. Good. Okay.
    And what sort of actions recently have taken place in the 
system that you can share with us about people being held 
responsible for this abuse?
    Dr. Clancy. I think you have probably seen from newspaper 
articles that a fair number of people that we have brought to 
the attention of law enforcement have, in fact, been convicted 
and are serving time. They're paying their debt to society. And 
we would be happy to get you a whole list for the record.
    Mr. Poliquin. That would be great. We will make sure we get 
that list. Thank you very much.
    Integrated services networks, who are they and what do they 
do? And how are they involved in this?
    Dr. Clancy. So we have facilities--that is hospitals, 
clinics, and so forth--all over the country, including Alaska 
and Hawaii and Guam and even a clinic in Manila and so forth. 
So a big, big span of reach. And so the system is organized 
into these networks. This is sort of a submanagement model.
    Mr. Poliquin. Okay. And what does the integrated service 
networks do?
    Dr. Clancy. They manage and provide oversight for the 
facilities and clinics in that particular area.
    Mr. Poliquin. Okay. So they'd be responsible also for 
making sure that we have a good headcount, so to speak, on 
where the drugs are and where they're being dispensed, correct?
    Dr. Clancy. Yes.
    Mr. Poliquin. Okay. Good. And who's the head person over 
there?
    Dr. Clancy. There are 18 of these networks. So, in your 
area, that would be Dr. Michael Mayo-Smith for New England.
    Mr. Poliquin. Okay. We'll make sure we get a list of these 
people also.
    Mr. Williamson, have you found in traveling around the 
country and dealing with separate VA facilities that there is 
inconsistency--and I think Congresswoman Kuster asked this 
question earlier; I want to make sure I get it straight--there 
is inconsistency in which organizations, which medical 
facilities actually do a better job than not in following these 
protocols?
    Mr. Williamson. Absolutely.
    Mr. Poliquin. Okay. How do you fix that problem?
    Mr. Williamson. There was one facility that we looked at 
that did everything right, and what was going on there was 
commitment and leadership from the medical director right down 
to the inspectors. And that's what you need. It's a culture--
    Mr. Poliquin. So there is an example at the VA that this 
can be done correctly.
    Mr. Williamson. Yes.
    Mr. Poliquin. Okay. And what would you guess, what 
percentage of the VA facilities around the country are doing 
this well?
    Mr. Williamson. Ten, 15 percent.
    Mr. Poliquin. Ten or 15 percent.
    So, Mr. Chairman, there are 85 percent of the VA facilities 
around the country who are dispensing drugs illegally or at 
least in a hurtful way, correct?
    Mr. Williamson. I wouldn't say dispensing drugs illegally. 
They're not following the tenets of the inspection process.
    Mr. Poliquin. Okay. And, as a result, these drugs get in 
the wrong hands.
    Mr. Williamson. Correct.
    Mr. Poliquin. Okay. Good.
    Dr. Berge, you're in the private sector over at Mayo, 
correct?
    Dr. Berge. Correct.
    Mr. Poliquin. Okay. At least you're outside the government 
sector.
    Dr. Berge. Correct.
    Mr. Poliquin. Good. Have you found that with an effective 
drug control program that you can save money?
    Dr. Berge. I believe we can. I believe if you were to ask 
the executives of the Exeter, New Hampshire, hospital that's 
being, you know, sued, you know, multiple lawsuits, that they 
wish they had a more effective system in place.
    Mr. Poliquin. Besides avoiding litigation, is there a way 
to save money when you have an effective program like this?
    Dr. Berge. That's extremely hard to quantify, I think. I 
mean, to have an effective system in place is not an 
inexpensive endeavor in itself. But it allows you to--we have 
heard that the word on the street is don't go to work for Mayo, 
because if you're going to steal drugs, they'll catch you.
    Mr. Poliquin. Gotcha. Thank you.
    Thank you very much for being here.
    Mr. Chairman, thank you very much.
    Mr. Bergman. Thank you.
    Dr. Dunn, you are recognized for 5 minutes.
    Mr. Dunn. Thank you, Mr. Chairman.
    Dr. Clancy, I serve a constituency that actually has a 
veterans hospital, the Lake City facility. And there was 
testimony here that we did not read aloud but I think you're 
familiar with that they had a problem in the Lake City facility 
recently with a nurse misappropriating drugs.
    Can you discuss the corrective actions and protocols that 
have been established at that Lake City facility in the wake of 
this incident to restore the quality of care and the level of 
workplace safety for the community?
    And, also, tell me if your current controlled substance 
coordinator in that facility is properly certified and educated 
on the management of controlled substances and the supply chain 
and the management policies.
    Dr. Clancy. I would be happy to take that for the record. 
Our first focus was on protecting patients and then holding the 
individual accountable. But I will get the rest of the 
information--
    Mr. Dunn. Okay. So you're not familiar with that particular 
incident in the Lake City facility?
    Dr. Clancy. I am familiar with the incident. I'm not 
familiar with all of the details of the followup. But we will 
find that for you.
    Mr. Dunn. All right.
    Let me depart for a second. Dr. Berge, you're an expert in 
substance abuse, I think, and how it comes to pass. I'm a 
surgeon, and I've managed operating rooms, I've directed 
hospitals and, you know, large clinics. And this is a problem 
we all have to address. It's just part of the job that we have 
to do when we do health care.
    Mr. Dunn. And I've seen this studied at the State level as 
well. I'm looking at this particular pie chart here that 
suggests that 90 percent of the problem with diversion with 
controlled substances is occurring not in the health care 
facilities, but in the United States Postal Service and in UPS. 
Now, I want to tell you that I've looked at a lot of drug 
diversion, a lot of problems with this in my 35-year career as 
a surgeon, I have never seen anything like this reported. This 
is perilously close to the old excuse, the dog ate my homework. 
Do you believe that 90 percent of the problem of drug diversion 
in this country occurs in the United States Postal Service?
    Mr. Berge. I'm not really qualified to comment on that 
because that's not where we see it. I'm basically assigned to 
within the walls of our healthcare facility, so what happens 
without, I don't know. That's not what we see at Mayo, we see 
other forms of diversion.
    Mr. Dunn. Perhaps I should redirect that question, Dr. 
Clancy, and say, do you mean by this that the 90 percent of the 
problem occurs in the Veterans Administration facility mail 
rooms? Or are you actually saying that employees of the United 
States Postal Service, and the United Parcel Service, or people 
who victimize them are getting 90 percent of the diverted 
drugs?
    Dr. Clancy. What I am saying, and I'll ask my colleague to 
elaborate, is that between the time the prescriptions are put 
in an envelope, and understand that we have a central mail 
order pharmacy which, for most prescriptions, works 
extraordinarily well, it does a high order of business, very 
large volumes. Somewhere between there and the veterans home 
where it was supposed to go is where it is diverted. On 
occasion, we've heard from veterans that that's actually 
diverted by a family member and so forth. But it could be any 
one of those points and that's where working with the inspector 
general, VA police, and outside law enforcement has been very 
helpful.
    Mr. Dunn. Okay. So let's drill down on this a little bit 
farther, because this looked like they were laying it off on 
the Postal Service. What's happening is the VA is taking--
getting receipt of the drugs from who they purchased from, and 
then they are distributing it in their system. Now they may be 
using UPS or USPS, and somewhere between once the VA has the 
drug and the VA passes it off to another part of the VA, the 
drugs are being diverted. Is that the system?
    Dr. Clancy. No, this is outside the VHA system.
    Mr. Dunn. So I have to tell you, 35 years, I've never heard 
this kind of accusation, 90 percent of the problems in the 
postal system, I'm flabbergasted, Mr. Chairman. And let the 
record reflect my incredulity.
    Mr. Williamson. Dr. Dunn, we looked at this. One of the 
first things that we tried to obtain was good data. I would be 
very suspicious of the VA data because drug losses are not 
always synonymous with diversion, so one has to be careful of 
that. But the reporting system, VA doesn't have a good 
reporting system for drug diversion cases, so I would be very 
suspicious of this VA data.
    Mr. Dunn. I am too. Thank you.
    Mr. Bergman. Thank you.
    Dr. Roe, you're recognized for 5 minutes.
    Mr. Roe. Thank you, Mr. Chairman. I want to go along with a 
little bit of what Dr. Dunn was doing. Obviously, we know that 
there's a drug epidemic, and certainly in the State of 
Tennessee I live in, it is. Is there any data on how many 
veterans die of drug overdose deaths by both with Diazepines 
and with opioids? Dr. Clancy, do you have any information on 
that? How many of our veterans?
    Dr. Clancy. We do track that very closely, and we would be 
happy to get that for you for the record.
    Mr. Roe. The other thing I have, as I looked at this graph 
more, I couldn't figure out you determined 90 percent. I mean, 
if somebody is home and just said I didn't get my drugs. Look, 
one good thing, if there is any good thing about an electronic 
health record, what used to happen to us when we would close 
our office at 5 o'clock, people would start calling in and ask 
about, Well, I just had surgery--we had a big practice--2 weeks 
ago, and Dr. So-and-so didn't leave me enough medicine, I need 
you to call me a prescription in. The EMR, I'd just pull it up 
and say, well, you don't seem to be a patient in our practice. 
People are very clever at being able to get drugs. How many--
when you say 90 percent, how in the world could you ever figure 
that number out, because you say here that the Post Office 
doesn't deliver it. How do you know that?
    Mr. Valentino. I can help with that. This is based on a 
sample of reports from January 2014 through March of 2016. So 
whenever we have a loss, we have a template that the individual 
facility fills out. What happened? Who did you report it to? 
DEA, OIG, VA police and security and so on and so forth. In 
those reports, we're able to glean information and identify if 
it was a situation where a VA staff member diverted a drug, or 
whether it was a patient calling and saying, I didn't get my 
package. And our packages are sent with tracking information.
    So we can tell where it is in the delivery stream. And at 
some point, if the patient says they don't get it, we have one 
of two situations: either they did get it, or a family member 
got it, or it went missing somewhere. So these are--I agree, 
these may not be diversions, but these are indeed lost reports 
that are generated--
    Mr. Roe. I'm sorry to interrupt you, because my time is 
short. But it looked to me like, if we can know how many died, 
if there is a real problem, looks like there may be a better 
way to deliver these medications to people, than sending them 
out in the mail. I mean, if that's where nine out of 10 of 
these problems are, and we're losing a lot of people, it looks 
to me like that's a sloppy system, if that's the case.
    Anyway, Dr. Clancy, in your written testimony, you said 92 
percent of--get lost by mail, and you sort of answered about 
how you got at that information. And in viewing the DEA forms 
106 submitted to the Committee, we learned of instances where 
VA mailed controlled substances to the wrong address, and 
worse, to the wrong veteran. How many cases from the 92 percent 
that were missing in the mail were those delivered to the wrong 
address or to the wrong person? That's really sloppy.
    Dr. Clancy. We would be happy to get that for the record.
    Mr. Roe. Well, just--and we appreciate that. And please 
take that for the record and note that the numbers--and bring 
those numbers to the Committee. And for now, what's the VA 
doing to ensure that they get the right prescription? That's 
just sloppy work when you mail it to the wrong address, or to 
the wrong person, for goodness sakes.
    Dr. Clancy. There's a big part of the effort initiated by 
Secretary McDonald and my VA transformation that includes 
making sure that veterans data is integrated from multiple 
sources, because after all, many veterans get multiple services 
from us, so that when they move, change phone numbers or 
whatever, we've got accurate information. Everything that is 
mailed out is bar-coded so that it can be tracked. So if a 
veteran calls up a facility and says, My medications didn't 
come, they can actually track it, there's a tracking number, 
whether it's Postal Service or UPS. And ultimately, that's 
helpful in law enforcement in figuring out what happened.
    Mr. Roe. But is that a system we want to continue at the 
VA? Because the VA is a huge system, and treating millions of 
people, and not thousands, but millions.
    Mr. Valentino. So you're right, absolutely right that this 
is an area where it's not working as well as it should. If we 
required every veteran to come in to pick up their controlled 
substances, we could certainly do that, I think it could create 
some unintended consequences, some of our veterans live very 
far away. So we may have to look at other options for them to 
get their controlled substances.
    Mr. Roe. Now I agree with that, it would do that. I'm not 
saying that you should do that. We have a situation now where 
there's 30-something thousand people, these are all deaths that 
are preventable. It is really disturbing to me, that when you 
have probably as many people die of drug overdose deaths as car 
wrecks now, so it is a huge problem for the entire country.
    Mr. Chairman, I yield back.
    Mr. Bergman. Mr. Poliquin is recognized for one follow-on 
question.
    Mr. Poliquin. Thank you very much, Mr. Chairman. I 
appreciate it. I would like to follow up on what Chairman Roe 
was just talking about. It's clear to me and I think everybody 
in this room that the VA, and God bless them, they are doing a 
horrible job when it comes to this issue. Why in the heck do we 
have to dispense the pills from the VA? How many pharmacies do 
we have in this country? I don't know, Doctor, I mean we have a 
bunch of them, right? Why in the heck can't we have pharmacies 
around the country closer to where our population is, where our 
veterans are, why don't they dispense the pills, if you guys 
are doing such a horrible job? Dr. Clancy?
    Dr. Clancy. I'm sure, as my colleague noted, first of all, 
mail order works extraordinarily well for other types of 
medications, and as we work through how to reduce this area of 
vulnerability, there may be a lot of other options that we 
could consider.
    Mr. Poliquin. Good. So, in other words, what you are saying 
if you're getting an aspirin or something like that, it will 
probably make sense, but a controlled substance. Maybe it's 
better if it's closer to home, right, where folks come in and 
they are known by the folks at the pharmacy, and you know, 
we've got a problem here, so forth and so on. Why not? I think 
we ought to consider that. I don't know what the protocol is, 
Mr. Chairman, I bet these nice folks can come back to us at 
some time and report back to us. I would like to follow up, if 
I can, along the same vein, is that Mr. Dahl and Mr. 
Williamson, my eyes are bad, it's Mr. Williamson, right? Great. 
You two fellows said that roughly 10 or 15 percent of the 
medical facilities in the VA are doing this right. That means 
there are 80, or 85 percent, or 90 percent--
    Ms. Williamson. That's what I would--we only looked at 
four, and the IG looked at 58, but that's based on, you know, 
some--
    Mr. Poliquin. There are a bunch of them that are doing it 
wrong?
    Ms. Williamson. Excuse me?
    Mr. Poliquin. There are a bunch of them that are doing it 
wrong?
    Ms. Williamson. Correct.
    Mr. Poliquin. I have an idea, Mr. Chairman, why don't we 
get you nice folks to talk to our great staff here, and find 
out who's doing if right? And we'll have our staff, Mr. 
Chairman, call up the folks that are doing it right, and let's 
find out why they are doing it right, and then maybe we can 
have this nice person, Mr. Alaigh, who, I believe, Dr. Clancy 
report to, who would be the Under Secretary for Health 
Organizational Excellence, have him come before the Committee, 
and then we can see, okay, we've had these folks that are doing 
it right, now we're having a problem at the VA doing it wrong. 
Maybe you can tell us why 80 percent are doing it wrong. It's 
just an idea. What do you think about that, Mr. Dahl, do you 
think that would work?
    Mr. Dahl. I missed that last part, sir.
    Mr. Poliquin. Do you think that would work? Would that give 
us a little bit of help to the folks that are doing it wrong?
    Mr. Dahl. Best practices, it wouldn't hurt to share them.
    Mr. Poliquin. There you go. We are all trying to get this 
right, because we have a lot of veterans who are in pain, and 
we got a lot of folks that are having problems with opioids and 
heroin, including the Second District of Maine that I'm very 
concerned about. So anything that we can do to help you folks, 
we'll do that. And I know our great staffer, Kate, will be in 
touch with you folks to get the names that we talked about.
    Yes, Doctor.
    Dr. Clancy. I just wanted to make the point that we often 
do do sharing of best practices and have a big initiative on 
that now, and I think it is a splendid idea to--
    Mr. Poliquin. Have you been doing that for the last 8 
years?
    Dr. Clancy. Not in this particular area. We have focused a 
lot on reducing opioid use.
    Mr. Poliquin. The last year, the last 2, or the last 3?
    Dr. Clancy. The last couple of years.
    Mr. Poliquin. The last couple of years. But you still have 
about 80 percent not doing it right?
    Dr. Clancy. I am not quite as confident. I think that may 
be a slightly pessimistic projection, but I will tell you when 
we look, I will let you know.
    Mr. Poliquin. Thank you. Even more, Mr. Chairman, more 
reason for us to get the folks who are doing it right to come 
and report to us and maybe have the person who is in charge of 
everybody tell us why the other folks are doing it right.
    Dr. Clancy. If I might, Dr. Alaigh is a woman.
    Mr. Poliquin. Wonderful. Thank you very much. I appreciate 
it. Thank you, Mr. Chairman. I yield back my time.
    Mr. Bergman. Thank you. Thanks to everyone. Thanks to the 
witnesses. This has been a great next first step as we move 
forward with a very serious issue here. You are now excused.
    It is clear from the testimony that has been provided 
today, as well as the numerous cases we here about in the news 
that drug diversion is a major problem at VA facilities. The 
lack of oversight over VA's controlled substances and the 
apparent lack of accountability for failing to monitor proper 
distribution, storage and destruction is troubling. We hope 
that by bringing this issue to light, it will encourage the VA 
to take steps necessary to impose better oversight and control.
    I look forward to hearing back on the progress and changes 
the VA is making. I ask unanimous consent that all Members have 
5 legislative days to revise and extend their remarks and 
include extraneous material. Without objection, so ordered.
    I would like to, once again, thank all our witnesses and 
the audience members for joining in today's conversation. With 
that, this hearing is adjourned.

    [Whereupon, at 4:44 p.m., the Subcommittee was adjourned.]



                           A P P E N D I X

                              ----------                              

               Prepared Statement of Carolyn Clancy, M.D.
    Good morning, Chairman Bergman, Ranking Member Kuster, and Members 
of the Subcommittee. Thank you for the opportunity to discuss oversight 
of controlled substances and Drug Free Workplace programs at Department 
of Veterans Affairs (VA) facilities. I am accompanied today by Michael 
A. Valentino, Chief Consultant for the Veterans Health Administration's 
(VHA) Pharmacy Benefits Management Service (PBM).

Introduction

    VHA is the Nation's largest integrated health care system, and 
pharmacy services are a vital part of delivering the high-quality 
health care our Veterans deserve. Our pharmacy program is widely 
regarded as the professional benchmark for clinical pharmacy practice, 
drug formulary management, prescription fulfillment services, and 
1A\1\medication 1A\2\safety. \3\
---------------------------------------------------------------------------
    \1\ Gellad, W.F., Good, C.B., & Shulkin D.: Addressing the opioid 
epidemic: Lessons from the Veterans Affairs. JAMA Int. Med. (in press).
    \2\ Aspinall, S.L., Sales, M.M., Good, C.B., Canzolino, J.J., 
Calabrese, V., Glassman, P.A., Burk, M., Moore, V., Neuhauser, M.M., 
Golterman, L., Ourth, H., Morreale, A., Valentino, M., & Cunningham, 
F.E. Pharmacy benefits management in the Veterans Health Administration 
revisited: 2004-2014- A decade of advancements. J. Manag. Care. Pharm. 
2016; 22(9):1058-1063.
    \3\ United States Senate Committee on Veterans' Affairs, Hearing on 
Overmedication: Problems and Solutions. Apr. 30, 2014. 113th Cong. 2nd 
sess. Washington: GPO, 2015 (statement of Mark Edlund, Health Services 
Researcher, RTI International).
---------------------------------------------------------------------------
    VHA's PBM is responsible for providing a broad range of pharmacy 
services via 260 VA medical center and community-based outpatient 
clinic pharmacies and 7 Consolidated Mail Outpatient Pharmacies (CMOP). 
In fiscal year (FY) 2016, VHA dispensed more than 147 million 
prescriptions to over 5 million unique Veterans. Of these, 30 million 
were provided by medical facility pharmacies, and 117 million by CMOPs.
    Oversight of controlled substances is multi-faceted and involves: 
1) ensuring VA lists controlled substances on its National Formulary 
that have evidence of safety and effectiveness; 2) providing evidence-
based prescribing criteria for controlled substances; 3) developing 
internal controls for physical drug security; 4) using electronic 
prescribing to prevent forgery; 5) monitoring suspected cases of theft 
or diversion and taking appropriate follow-up action; 6) addressing any 
controlled substances prescribing that does not align with evidence-
based criteria; 7) implementing patient-focused initiatives such as 
medication take-back programs; 8) overdose education and naloxone 
distribution; and 9) ensuring the availability of complementary and 
integrative medicine therapies in place of controlled substances.
    As part of its long-standing focus on medication safety, VHA 
implemented robust controlled substance security measures in the early 
1980s. In many cases, these security measures far exceed the 
requirements of the Controlled Substances Act (CSA). For example, CSA 
requires that an actual count of scheduled II controlled substances and 
an estimated count of most of Schedule III through V controlled 
substances be performed every two years. However, VA performs an actual 
count of all Schedules of controlled substances every 72 hours. In 
addition CSA allows Schedule III through V controlled substances to be 
dispersed among non-controlled substances in the pharmacy. However, VA 
requires all Schedules of controlled substances to be stored under lock 
and key, with electronic access controls requiring two-factor 
authentication.
    Individuals who are determined to divert controlled substances may 
find a way to do so despite the existence of robust controls. This is 
true within and outside of VA. Data from January 2, 2014, through March 
11, 2016, show that VA had 2,405 reports of internal and external 
losses, some of which were due to diversion. The data also show that 
approximately 92 percent of controlled substances losses occur in the 
mailing system during shipping to the Veteran, 1.5 percent of losses 
are due to diversion by VA staff, 1.2 percent are due to external theft 
outside of the mailing system, 0.3 percent are due to dispensing errors 
and 5.6 percent are unknown but likely due to manufacturer shortages in 
stock bottles, miscounts, or similar issues.
    During this same time period, VA dispensed approximately 29 million 
prescriptions for controlled substances, as well as a very large number 
of individual doses of controlled substances for hospitalized patients. 
Using only the number of controlled substance prescriptions, which 
overestimates reports of loss by not including inpatient doses, the 
2,405 reports filed indicate a controlled substance loss rate of 0.008 
percent.

Opioid Safety Initiative (OSI)

    The OSI was chartered by the Under Secretary for Health in August 
2012 and piloted in several Veterans Integrated Service Networks 
(VISN). Based on the results of these pilot programs, OSI was 
implemented nationwide in August 2013. The OSI objective is to make the 
totality of opioid use visible at all levels in the organization. This 
includes key clinical indicators such as the number of unique pharmacy 
patients dispensed an opioid, unique patients on long-term opioids who 
receive a urine drug screen, patients receiving an opioid and a 
benzodiazepine (which puts them at a higher risk of adverse events), as 
well as the average morphine equivalent daily dose (MEDD) of opioids.
    OSI has demonstrated achievement by multiple metrics, including by: 
a reduction in the number of patients receiving opiate analgesics; 2) a 
reduction in the number of patients receiving them for longer than 90 
days; 3) a reduction in the concurrent prescription of opiate 
analgesics with other controlled substances that have potential for 
drug interactions; 4) a reduction in their average daily dose; and 5) 
an increase in the number of patients who are receiving opiate 
analgesics with completed drug screens.
    Results of key clinical metrics for the OSI from the fourth quarter 
4 of FY 2012 (beginning in July 2012) to the first quarter of FY 2017 
(ending in December 2016) are:

      208,036 fewer patients receiving opioids (679,376 
patients to 471,340 patients, a 31 percent reduction);
      69,148 fewer patients receiving opioids and 
benzodiazepines together (122,633 to 53,485 patients, a 56 percent 
reduction);
      157,300 fewer patients on long-term opioid therapy 
(438,329 to 281,029, a 36 percent reduction).
      The percentage of patients on long-term opioid therapy 
who have had a urine drug screen to help guide treatment decisions has 
increased from 37 percent to 86 percent (a 49 percent increase)
      The overall dosage of opioids is decreasing in the VA 
system as 26,350 fewer patients (59,499 to 33,149, a 44 percent 
reduction) are receiving greater than or equal to a 100 MEDD.

    Additionally, the desired results of OSI have been achieved despite 
an overall growth of 119,766 patients who are receiving prescriptions 
from VA at the same time. While these changes may appear to be modest, 
given the size of the VA patient population, they signal an important 
trend in VA's use of opioids. VA expects this trend to continue as it 
renews its efforts to promote safe and effective pharmacologic and non-
pharmacologic pain management therapies.

GAO Report

    The Government Accountability Office (GAO) provided VHA a draft 
report on December 16, 2016, titled VA HEALTH CARE: Actions Needed to 
Ensure Medical Facility Controlled Substance Inspection Programs Meet 
Agency Requirements. In the report, GAO found that diversion of opioid 
pain relievers and other controlled substances by health care providers 
has occurred at several VA medical facilities. VA concurred with GAO's 
six recommendations from this report:

    1.The Under Secretary for Health should ensure that VA medical 
facilities have established an additional control procedure, such as an 
alternate controlled substance coordinator or a pool of extra 
inspectors, to help coordinators meet their responsibilities and 
prevent missed inspections.

    2.The Under Secretary for Health should ensure that VA medical 
facilities have established a process where coordinators, in 
conjunction with appropriate stakeholders (e.g., pharmacy officials), 
periodically compare facility inspection procedures to VHA's policy 
requirements and modify facility inspection procedures as appropriate.

    3.The Under Secretary for Health should improve the training of VA 
medical facility controlled substance coordinators by ensuring the 
training includes the inspection procedures that VHA requires.

    4.The Under Secretary for Health should ensure that medical 
facility directors have designed and implemented a process to address 
nonadherence with program requirements, including documenting the 
nonadherence and the corrective actions taken to remediate nonadherence 
or the actions that demonstrate why no remediation is necessary.

    5.The Under Secretary for Health should ensure that networks review 
their facilities' quarterly trend reports and assure facilities take 
corrective actions when nonadherence is identified.

    6.The Under Secretary for Health should ensure that networks 
monitor their medical facilities' efforts to establish and implement a 
review process to periodically compare facility inspection procedures 
to VHA's policy requirements.

    The final GAO report was published on February 15, 2017, and VA is 
in the process of implementing the recommendations:

    1.VHA's Directive 1108.02, Inspection of Controlled Substances, 
provides guidance to Facility Directors to ensure the Controlled 
Substances Programs develop and remain compliant with the requirements. 
The PBM will develop a memorandum that outlines the expectations of 
Directive 1108.02 and specifically the requirements to: 1) have 
mandatory training; 2) appoint an alternate Controlled Substance 
Coordinator; and if one is not already appointed, to provide back-up 
support; and 3) adding inspectors to the program to ensure inspections 
are not missed. Each Facility Director will then be provided this 
memorandum, and Facility Quality Managers (QM) will report compliance 
to the VISN QM Officer.

    2.Each Medical Facility Director will be required to compare the 
current inspection program policy and procedures with VHA Directive 
1108.02 using the Self-Assessment guide. The self-assessment will be 
completed by a multidisciplinary group including the Controlled 
Substance Coordinator, Chief of Pharmacy or designee, Nurse Executive 
or designee, and Facility QM or designee. The results of the self-
assessment will be reviewed by the facility QM Committee. An action 
plan must be developed for identified deficiencies and progress tracked 
until completion through the QM committee.

    3.The Deputy Under Secretary for Health for Operations and 
Management (DUSHOM) will provide the memorandum developed in response 
to Recommendation 1 that outlines the requirements that all current and 
future Controlled Substance Coordinators complete the Talent Management 
System web-based Controlled Substance Inspector Certification training 
program in addition to the Controlled Substance Coordinator Orientation 
Training Course. The certification course contains detailed information 
on conducting inspections. VHA Directive 1108.02, Inspection of 
Controlled Substances, will be updated with this requirement.

    4.PBM will develop guidance to be distributed by the DUSHOM 
directing Medical Facility Directors to assess adherence with program 
requirements at least quarterly. The facility QM Committee will review 
and evaluate monthly and quarterly reports for adherence with 
requirements and corrective actions taken or required to ensure 
compliance with program requirements in VHA Directive 1108.02. All 
corrective actions will be documented and followed through to 
completion by the QM Committee and reported to the Medical Facility 
Director.

    5.PBM will develop a memorandum that outlines the expectations of 
Directive 1108.02 and specifically the requirements that Networks will: 
1) review their facilities' quarterly trend reports and ensure 
facilities take corrective actions when nonadherence is identified, and 
2) monitor their medical facilities' efforts to establish and implement 
a review process to periodically compare facility inspection procedures 
to VHA's policy requirements. The DUSHOM will provide this memorandum 
to each Network Director, who will disseminate it to the Facility 
Directors, thereby ensuring appropriate actions have been taken to 
ensure the actions listed in the memorandum are completed.

    At completion of each of these actions, the VISN QM Officer will 
monitor compliance and provide an action plan for any non-compliant 
facilities within that VISN to PBM and the DUSHOM. The two offices will 
meet and decide whether any further actions are needed. The status of 
each response is in process, and the target completion date is October 
2017.

VA's Drug Free Workplace Program

    VA, as an employer, understands that well-being of its employees is 
essential to the successful accomplishment of the agency's mission, and 
is dedicated to maintaining high employee productivity. As such we are 
committed to implementing Executive Order (EO) 12564, signed by 
President Ronald Reagan on September 15, 1986, requiring all Federal 
agencies to develop a plan to combat drugs in the workplace.
    VA takes very seriously our mission to provide top quality care and 
services to our Veterans. In doing so, our human resources offices play 
a very vital role in implementing our Drug Free Workplace Program 
(DFWP). As the second largest employer in the Federal Government, VA 
can and should continue to show the way towards achieving drug-free 
workplaces through programs designed to offer drug users a helping hand 
and, at the same time demonstrating that drugs will not be tolerated in 
the workplace. The use of illegal drugs by VA employees is inconsistent 
with the special trust placed in such employees who care for Veterans. 
VA has recently made great strides towards improving the Drug Free 
Workplace Program.
    Beginning in October 2015, Drug Program Coordinators began 
certifying on a monthly basis that employees selected for random drug 
testing were tested, when they were tested, or why they were not 
tested. In November 2015, the Office of Human Resource Management began 
reviewing the data entered in the notification site for compliance and 
has continued in the ensuing months to conduct this review. Those 
Coordinators not in compliance with the certification process are 
reported to their chain of command until compliance is achieved.
    VA is developing procedures to ensure the drug testing coding of 
employees in Testing Designated Positions (TDP) is accurate and 
complete. We are working with our HR Smart (VA's recently implemented 
human resources information system) business partner to implement a 
monthly process ensuring that all employees occupying Testing 
Designated Positions identified in VA Directive 5383 are included in 
the pool of random selectees each month. The update process will run 
prior to the random selection of employees to be tested that month. In 
addition, queries are now available to human resource (HR) offices to 
assist them in ensuing all testing designated positions are 
appropriately coded.
    VA is committed to 100 percent testing of all final selectees for 
Testing Designated Positions prior to appointment. On March 1, 2016, 
the Assistant Secretary for Human Resources and Administration 
published a memorandum stating that 100 percent of all applicants 
tentatively selected for appointment to a TDP be drug tested prior to 
appointment.
    VA has implemented a process to monitor local compliance with VA's 
DFWP requirements. Beginning in March 2016, the DFWP website was 
modified to reflect that Coordinators were to certify that all 
applicants selected for all TDPs were tested in accordance with VA 
Handbook 5383. Those Coordinators not in compliance with the 
certification process are reported to their chain of command until 
compliance is achieved.

OIG Review of Drug Testing at Atlanta VA Medical Center

    In April 2015, the VA Office of Inspector General (OIG) opened an 
investigation at the Atlanta VA Medical Center (VAMC) to review 
allegations of a backlog of over 300 unadjudicated background 
investigations and that mandatory drug testing of new hires did not 
occur over a 6-month period. It is important to note that this 
inspection happened before many of the institutional changes described 
above were implemented.
    The investigation substantiated both allegations and found that, as 
of July 2015, the Atlanta VAMC had a backlog of about 200 unadjudicated 
background investigations; Atlanta VAMC human resources personnel 
acknowledged a backlog dating as far back as 2012. It was also found 
that the DFWP was not administered from November 2014 to May 2015.
    VA appreciates OIG's work in making recommendations to improve our 
hiring processes. Atlanta VAMC leadership implemented a number of 
changes in 2016 including:

      realigning the human resources department under the 
direct supervision of the Medical Center Director;
      hiring a new human resources officer;
      dedicating a senior staff member to the personnel 
security section to oversee personnel assigned to that function; and
      developing a secondary database to work in tandem with 
the current system for staffing and tracking all background 
investigations, expiration, status, open and closed dates.

    Atlanta VAMC identified 220 employees who require drug testing, and 
began notifications to these employees in December 2016. A phased 
approach is necessary to take into account workload, the number of 
people tested, and staffing levels. The Atlanta VAMC expects to 
complete testing by March 2017.

Conclusion

    Mr. Chairman, I am proud of the health care our facilities provide 
to our Veterans, including prescription drug services. With support 
from Congress, we look forward to continuing to improve our oversight 
of controlled substances and drug free workplace programs, which will 
further improve the care our Veterans deserve. Thank you for the 
opportunity to testify before this subcommittee. I look forward to your 
questions.

                                 
                  Prepared Statement of Nicholas Dahl
    Mr. Chairman, Ranking Member Kuster, and Members of the 
Subcommittee, thank you for the opportunity to testify today on the 
Office of Inspector General's (OIG) work related to oversight of 
controlled substances and drug free workplace programs at VA 
facilities. I am accompanied by Emorfia Valkanos, a member of the OIG's 
Office of Healthcare Inspections staff in Manchester, New Hampshire, 
who is also a pharmacist.

BACKGROUND

    The Federal Drug-Free Workplace Program was initiated by Executive 
Order 12564 in 1986. The Executive Order established the goal of a 
drug-free Federal workplace and made it a condition of employment for 
all Federal employees to refrain from using illegal drugs on or off 
duty. The following year, Congress passed legislation (P.L. 100-71, 
Supplemental Appropriations 1987) designed to establish uniformity 
among Federal agencies' drug testing, confidentiality of drug test 
results, and centralized oversight of the drug testing program.
    Within VA, the Deputy Assistant Secretary for Human Resources 
Management is responsible for the implementation of the Department's 
Drug-Free Workplace Program. Drug Program Coordinators at each Veterans 
Health Administration (VHA) facility are responsible for scheduling 
drug tests each month for randomly selected employees. Department-wide, 
VA randomly selects 285 employees each month across its facilities for 
drug testing-for an annual total of 3,420 employees.
    VA Directive and Handbook 5383, VA Drug-Free Workplace Program, 
establishes policies and procedures for VA's Drug-Free Workplace 
Program. The Handbook designates safety-sensitive occupational series 
as Testing Designated Positions (TDPs), such as physicians, nurses, 
police officers, motor vehicle operators, and Senior Executive Service 
employees.
    There are several components to VA's Drug-Free Workplace Program, 
including:

      Pre-employment applicant testing of final selectees for 
TDPs.
      Random monthly drug testing of employees in TDPs. (Human 
Resources officials are responsible for properly coding employees in 
TDPs with the drug test code in VA's personnel information system.)
      Drug testing of employees when there is reasonable 
suspicion of on-the-job drug use or where drug use is suspected 
following a workplace accident or injury.

    VA also requires that managers at VHA facilities ensure that a 
controlled substance inspection program is implemented and maintained. 
VHA Handbook 1108.02, Inspection of Controlled Substances, details 
requirements for facility controlled substances inspections.

OIG WORK

    In recent years, the OIG has conducted an audit and a review where 
we assessed aspects of the Drug-Free Workplace Program. The audit 
included a comprehensive assessment of the effectiveness of VA's Drug-
Free Workplace Program. We identified program weaknesses and made 
recommendations to improve the effectiveness of the program. The review 
revealed one medical center did not conduct drug testing for a 6 month 
period. The review also revealed a lack of oversight of the Drug-Free 
Workplace Program, both at a local and national level, in that the 6 
month lapse in testing was not timely identified.

Drug-Free Workplace Program

    In March 2015, we reported VA needed to improve the management of 
its Drug-Free Workplace Program to ensure the program was effective in 
maintaining a workplace that is free from illegal drug use. \1\ We 
identified program weaknesses and determined VA's Program was not 
accomplishing its primary goal of ensuring illegal drug use was 
eliminated and VA's workplace was safe.
---------------------------------------------------------------------------
    \1\ Audit of VA's Drug-Free Workplace Program, March 30, 2015.

---------------------------------------------------------------------------
Pre-Employment Applicant Drug Test

    We reported that VA's Office of Human Resources Management (OHRM) 
did not ensure facility Human Resource Management Officers complied 
with VA's policy to drug test all applicants selected for a TDP prior 
to appointment. Instead, VA selected about 3 of every 10 applicants 
selected for a TDP for pre-employment drug testing. If a tested 
applicant has a verified positive test result, VA should decline 
extending a final offer of employment. While VA's Drug-Free Workplace 
Program Handbook states every individual tentatively selected for 
employment in a TDP is subject to a drug test before appointment, OHRM 
officials interpreted this language as meaning only some finalists for 
TDPs needed to be drug tested before being appointed. Because of this 
interpretation, we estimated approximately 15,800 (70 percent) of the 
nearly 22,600 individuals VA reported appointing into TDPs during 
fiscal year (FY) 2013 were not drug tested before being hired.

Employee Random Drug Testing

    We estimated VA achieved a national employee random drug testing 
rate of 68 percent of the 3,420 employees selected for random drug 
testing in FY 2013. Of 22 randomly selected facilities, we found 4 did 
not test any randomly selected employees, 10 had compliance rates 
ranging from 31 to 89 percent, and 8 tested at least 90 percent of 
their randomly selected employees. Facility Coordinators could not 
explain why the majority of the 32 percent of employees were not 
tested.
    We also estimated at least 19,100 (9 percent) of about 206,000 
employees in TDPs were not subject to the possibility of random drug 
testing because they were not coded with a Drug Test code, as required, 
in VA's personnel information system. Those not subjected to random 
drug testing included physicians, nurses, and addiction therapists. In 
addition, VA may have incorrectly identified as many as 13,200 
employees with the Drug Test code-meaning, employees in positions that 
do not usually require random drug testing were subject to testing. We 
found VA did test non-DTP employees, which reduced the probability that 
employees in high-risk, safety sensitive TDPs were selected for drug 
testing.

Reasonable Suspicion Drug Testing

    OHRM lacked sufficient oversight practices to monitor whether 
facilities referred all employees with a positive drug test result to 
the Employee Assistance Program (EAP). VA's Drug-Free Workplace Program 
Handbook requires facilities to refer all employees with a positive 
drug test result to its EAP for assessment, counseling, and referral 
for treatment or rehabilitation. However, facility Coordinators 
reported that only 17 of 51 employees who tested positive for drugs as 
a result of reasonable suspicion or after a workplace accident or 
injury were referred to their facility's EAP.
    We made five recommendations to the Deputy Assistant Secretary for 
Human Resources Management. These recommendations included:

      Ensuring all final selectees for TDPs complete pre-
employment drug testing prior to appointment
      Increasing accountability to ensure all employees 
selected for random drug testing are tested
      Improving the accuracy of Drug Test coding in VA's 
personnel information system
      Implementing procedures to ensure Custody and Control 
forms are accurately completed
      Ensuring compliance with Program requirements, such as 
referring employees who test positive to the EAP.

    The then Acting Deputy Assistant Secretary concurred with our 
recommendations and provided action plans that were responsive to our 
recommendations. This included a plan to require mandatory pre-
employment drug testing of all candidates selected for a TDP. Action in 
response to four of the five recommendations has been completed. VA 
continues to work on actions to ensure the accuracy of Drug Test coding 
in its personnel information system. Recently, VA notified us that they 
continue to work with their personnel information system business 
partner to implement this recommendation. We will continue to track 
their progress until we receive documentation that action is complete.

Human Resources Delays

    In January 2017, we reported on delays in the processing of certain 
human resources functions at the Atlanta VA Medical Center (VAMC). \2\ 
We conducted our work to assess allegations that there was a backlog of 
unadjudicated background investigations \3\ and mandatory drug testing 
for new hires in TDPs \4\ did not occur for a period of at least 6 
months between 2014 and 2015. We substantiated both allegations. 
Regarding the allegation that the Atlanta VAMC did not administer the 
Drug-Free Workplace Program for 6 months, we found no drug testing was 
completed at the VAMC from November 2014 through May 2015. This lapse 
occurred because the facility Coordinator left the position in 
September 2014 and the alternate Coordinator did not assume the 
collateral duties required of this position. Further, other VAMC Human 
Resources personnel were unaware of the Drug-Free Workplace Program 
responsibilities. Despite the lack of drug testing for 6 months, we 
found no indications VA management was aware of the lapse. Because no 
drug testing occurred, the Atlanta VAMC lacked assurance that employees 
who should have been subject to drug testing remained suitable for 
employment. We made five recommendations in the report:
---------------------------------------------------------------------------
    \2\ Review of Alleged Human Resources Delays at the Atlanta VAMC, 
January 30, 2017.
    \3\ An adjudication is considered backlogged after 90 days without 
a determination.
    \4\ There was also no monthly random drug tests for current 
employees in TDPs.

      Develop an action plan to ensure staff have appropriate 
background investigations and determinations are accurately recorded
      Ensure all suitability adjudicators receive the mandatory 
training and background investigation required for the position
      Provide training to all human resources staff on the 
requirements of the personnel suitability program
      Ensure human resources staff are trained on the 
requirements of the Drug-Free Workplace Program and the 
responsibilities of their positions
      Review the Drug-Free Workplace Program on a regular basis 
to ensure compliance with regulations and that employees hired during 
gaps are subject to corrective testing.

    The Atlanta VAMC Director concurred with our recommendations and 
reported that action has been taken with regards to the Drug-Free 
Workplace Program. When we receive documentation of action related to 
those recommendations, we anticipate closing them.

Evaluation of the Controlled Substances Inspection Program

    During our past inspections of VHA medical centers through our 
Combined Assessment Program reviews (CAP Reviews), we analyzed pharmacy 
operations including environment of care, management of controlled 
substances, and pharmacy security. In 2008, we reported facility 
managers needed to reinforce compliance with VHA policy regarding 
controlled substances inspections. We conducted another review during 
our fiscal year 2013 CAP Reviews to include 58 facilities and issued a 
summary of the results in June 2014. \5\ The summary report contained 
10 recommendations focused on opportunities for improvements:
---------------------------------------------------------------------------
    \5\ Combined Assessment Program Summary Report - Evaluation of the 
Controlled Substances Inspection Program at Veterans Health 
Administration Facilities, June 10, 2014.

      Conducting annual physical security surveys and 
correcting identified deficiencies
      Completing controlled substances quarterly trend reports 
and providing them to facility Directors
      Conducting monthly controlled substances inspections of 
non-pharmacy areas
      Completing non-pharmacy controlled substances inspection 
activities
      Performing emergency drug cache quarterly controlled 
substances physical counts and monthly verification of seals
      Validating completion of required drug destruction 
activities
      Verifying 10 percent of outpatient pharmacy written 
prescriptions for Schedule II drugs
      Validating accountability of prescription pads stored in 
the pharmacy
      Defining policy for acceptable reasons for missed 
controlled substances area inspections
      Providing annual controlled substances inspectors 
training.

    VA concurred with the recommendations and reported in December 2014 
that action had been taken to address these recommendations.

Investigative Work

    The OIG conducts criminal investigations regarding drug diversion 
classified in three categories.

Diversion of Controlled and Non-controlled Substances by VHA Employees

    Diversion by healthcare providers is a serious issue that OIG 
diligently pursues. Not only is it an issue of theft, it is potentially 
an issue of patient safety if the provider is ingesting controlled 
substances while on duty, if false entries are placed in patient files 
to cover up the diversion, or if patients are given another substance 
in place of the diverted drug. OIG recently concluded an investigation 
of drug diversion that resulted in a former Albany, New York, VAMC 
hospice nurse being sentenced to 82 months' incarceration and 3 years' 
supervised release after pleading guilty to tampering with a consumer 
product and obtaining controlled substances by deception and 
subterfuge. The investigation by the OIG and the Food and Drug 
Administration, Office of Criminal Investigation, revealed the 
defendant stole oxycodone hydrochloride from syringes and replaced the 
contents with Haldol, an anti-psychotic medication. The investigation 
further revealed the defendant may have inflicted pain and suffering on 
dying hospice patients by diverting their pain medications for his own 
use and replacing it with a drug that was subsequently administered by 
other nurses.

Diversion of Controlled and Non-controlled Substances for Illegal 
    Distribution

    VA pharmaceuticals are also diverted or stolen for the purpose of 
illegal sale. An ongoing investigation at the Little Rock, Arkansas, 
VAMC has led to two pharmacy technicians and a pharmacy technician 
student trainee being indicted for charges to include conspiracy, 
theft, and possession with intent to distribute. The OIG investigation 
resulted in the defendants being charged with diverting and 
distributing 4,000 oxycodone tablets, 3,300 hydrocodone tablets, 308 
oz. of promethazine with codeine syrup, and over 14,000 Viagra and 
Cialis tablets. Three additional VA employees were identified as part 
of the drug diversion, resulting in a resignation and reassignments. 
The monetary loss to VA is over $77,000.

Diversion of Controlled Substances via Theft of Mailed Pharmaceuticals

    Mailed pharmaceuticals are vulnerable to theft at any point in the 
process. The most common occurrence is theft by employees of the mail 
carrier, either Government or private. This type of diversion results 
in veterans experiencing delays in receiving their medication. A recent 
VA OIG and UPS Security investigation revealed a defendant stole 
several VA packages containing oxycodone and morphine that were 
intended for veterans residing in Memphis, Tennessee. During the 
investigation, the defendant was caught attempting to steal an 
additional package and confessed to the thefts. The (now) former UPS 
driver was sentenced to time served and 3 years' probation after 
pleading guilty to theft.

CONCLUSION

    The OIG has provided cross cutting oversight of the Drug-Free 
Workplace Program through our audits, inspections, and investigations. 
This oversight is necessary to ensure that VA takes the necessary steps 
to reduce risks to the safety and well-being of veterans and VA 
employees by having and following the proper program controls. We also 
have an active program investigating and having those engaged in drug 
diversion prosecuted. Without appropriate actions, we concluded VA 
lacked reasonable assurance that it is achieving a drug-free workplace 
and adequately securing controlled substances.
    Mr. Chairman, this concludes our statement. We would be happy to 
answer any questions that you or other Subcommittee Members may have.

                                 
              Prepared Statement of Randall B. Williamson
   Actions Needed to Ensure Medical Facilities' Controlled Substance 
                       Programs Meet Requirements
    Chairman Bergman, Ranking Member Kuster, and Members of the 
Subcommittee:
    I am pleased to be here today to discuss our recent report on the 
controlled substance inspection programs at medical facilities run by 
the Department of Veterans Affairs (VA). \1\ The Veterans Health 
Administration (VHA), which operates VA's health care system, requires 
that each of its medical facilities with stocks of controlled 
substances implement an inspection program to help reduce the risk of 
employees diverting for their own personal use controlled substances 
intended for veterans. Diversion of controlled substances such as 
opioid pain relievers can occur anywhere in a facility where employees 
have access to controlled substances, and this diversion can pose a 
risk to veterans-for example, by depriving them of needed medications. 
Without effective practices to reduce the risk of diversion by 
employees and to quickly identify it, diversion can remain undetected.
---------------------------------------------------------------------------
    \1\ GAO, VA Health Care: Actions Needed to Ensure Medical Facility 
Controlled Substance Inspection Programs Meet Agency Requirements, GAO 
17 242 (Washington, D.C.: Feb.15, 2017).
---------------------------------------------------------------------------
    Under its controlled substance inspection program, VHA requires 
medical facilities to conduct monthly inspections following specified 
procedures outlined in VHA's inspection program policy. These 
inspections must be performed in all facility areas that are authorized 
to have controlled substances-including pharmacies and patient care 
areas such as operating and emergency rooms. \2\ At each medical 
facility, the facility's director is primarily responsible for 
overseeing the inspection program and ensuring that the facility's 
program adheres to VHA's requirements. The facility director must 
appoint a coordinator to manage the controlled substance inspection 
program and the inspectors who conduct the inspections. The coordinator 
is responsible for ensuring that the inspections are conducted each 
month and submitting reports summarizing the results from the monthly 
inspections and trends to the facility director. The Veterans 
Integrated Service Network (network) that oversees the facility is 
responsible for reviewing the inspection program trend reports 
annually.
---------------------------------------------------------------------------
    \2\ As described in our report, we reviewed VHA's controlled 
substance inspection program policy issued in 2010, which was the most 
current policy at the time our review. See Department of Veterans 
Affairs, Veterans Health Administration Handbook 1108.02, Inspection of 
Controlled Substances (Washington, D.C., Mar. 31, 2010). VHA issued an 
update to its policy in November 2016. See Department of Veterans 
Affairs, Veterans Health Administration Directive1108.02, Inspection of 
Controlled Substances (Washington, D.C., Nov. 28, 2016).
---------------------------------------------------------------------------
    My testimony today summarizes the findings from our report 
analyzing the implementation and oversight of controlled substance 
inspection programs at select VA medical facilities. Accordingly, this 
testimony addresses:

    1.the extent to which selected VA medical facilities have 
implemented controlled substance inspection programs as required by VHA 
policies, and

    2.VHA's oversight of these programs at selected VA medical 
facilities.

    In our report, we recommend several key actions that VA should take 
to ensure that the facilities' inspection programs meet VHA's 
requirements, and my testimony summarizes these recommendations and 
VA's response to them.
    To conduct our work, we reviewed VHA policies and interviewed 
officials from 1) VHA Central Office, 2) a nongeneralizable selection 
of four VA medical facilities, and 3) the four networks that oversee 
these facilities. We selected the four facilities to achieve variation 
in geography and in the number of prescriptions for opioid pain 
relievers dispensed in the states in which the facilities operate. The 
four VA medical facilities we selected are located in Washington, D.C.; 
Milwaukee, Wisconsin; Memphis, Tennessee; and Seattle, Washington. We 
compared the number of controlled substance inspections that officials 
from each of the four VA medical facilities reported to us as having 
been completed from January 2015 through February 2016 to the number of 
inspections that should have been conducted, based on VHA's policy 
requirements. We reviewed the inspection procedures in place at each of 
the four facilities as described in the facilities' inspection program 
policies and other guidance documents, and we compared these procedures 
to VHA's policy requirements. We also reviewed the monthly and 
quarterly inspection reports for each of the four selected facilities 
during our review period and analyzed the contents of VHA's online 
training courses for coordinators and inspectors. We compared the 
implementation and oversight of the facilities' controlled substance 
inspection programs to VHA's policy requirements and to federal 
standards for internal control related to control activities, 
monitoring, and oversight. \3\ Further details on our scope and 
methodology are included in our report. \4\ The work this statement is 
based on was performed in accordance with generally accepted government 
auditing standards.
---------------------------------------------------------------------------
    \3\ GAO, Standards for Internal Control in the Federal Government, 
GAO 14 704G (Washington, D.C.: Sept. 10, 2014). GAO, Standards for 
Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 
(Washington, D.C.: Nov. 1, 1999). Internal control is a process 
effected by an entity's management, oversight body, and other personnel 
that provides reasonable assurance that the objectives of an entity 
will be achieved.
    \4\ See GAO 17 242.

Selected VA Medical Facilities Did Not Conduct All Monthly Inspections 
---------------------------------------------------------------------------
    or Follow All Required VHA Inspection Procedures

    We found that from January 2015 through February 2016, one of the 
four selected facilities we reviewed missed 43 percent of the required 
monthly inspections, and another facility missed 17 percent of these 
inspections. Further, at both facilities, most of the missed 
inspections were for patient care areas such as the operating rooms. 
\5\ At one of the two facilities, inspectors had missed all 14 
inspections of the facility's operating rooms during our 14-month 
review period. The facility's coordinator told us that the operating 
rooms were not inspected during this time because the assigned 
inspectors needed to arrive before or after normal operating room hours 
to obtain access to the controlled substances and were unable to 
conduct the inspections due to their conflicting work schedules. \6\ As 
a result of missed inspections in the operating rooms and other patient 
care areas, these medical facilities lack reasonable assurance that 
their physical inventory of controlled substances matches the recorded 
inventory, thereby increasing the risk that controlled substances could 
be stolen. Further, their ability to protect veterans from the harm 
that can result from diversion, such as depriving them of needed pain 
medications, is limited. The other two VA medical facilities we 
reviewed fully adhered to VHA's requirement to conduct monthly 
inspections in their patient care areas and pharmacies.
---------------------------------------------------------------------------
    \5\ VHA's inspection program policy requires that facilities 
inspect patient care areas and pharmacies on a monthly basis using 
specific procedures.
    \6\  A team of inspectors is assigned from various areas of the 
medical facility.
---------------------------------------------------------------------------
    We also found that three of the four selected VA medical 
facilities, when conducting inspections, did not include, or correctly 
follow, three or more of the nine VHA inspection requirements we 
reviewed. The fourth facility we reviewed had implemented inspection 
procedures that followed these nine requirements. For example, 
inspectors at two facilities did not verify that controlled substances 
had been properly transferred from their facility pharmacies to the 
automated dispensing machines in patient care areas. \7\ VHA requires 
inspectors to verify that all controlled substances transferred by a 
pharmacy on a selected day were received in patient care areas such as 
the operating room. However, at one facility, inspectors told us that 
they did not conduct this required procedure in one of the facility's 
two pharmacies. At another facility, inspectors verified only a sample 
of controlled substances dispensed by the pharmacy to confirm that the 
substances were actually transferred. Without checking that all 
controlled substances were properly transferred, inspectors may not 
identify controlled substances that are dispensed by the pharmacy and 
subsequently diverted rather than stocked in the automated dispensing 
machines located in patient care areas. \8\
---------------------------------------------------------------------------
    \7\ Automated dispensing machines are computerized drug storage and 
dispensing medication cabinets.
    \8\ The VA Office of the Inspector General also found in 2009-and 
again in 2014-that VA medical facilities did not always conduct 
required inspections or follow VHA's required procedures. For example, 
see VA Office of the Inspector General, Combined Assessment Program 
Summary Report: Evaluation of the Controlled Substances Inspection 
Program at Veterans Health Administration Facilities (Washington, D.C.: 
June 10, 2014).
---------------------------------------------------------------------------
    We found that several factors contributed to the missed inspections 
and incorrect implementation of inspection procedures that we 
identified.
    First, the two VA medical facilities that missed inspections lacked 
an additional control procedure, such as designating an alternate 
coordinator or appointing additional inspectors, to help prevent missed 
inspections when the assigned inspectors could not conduct them. Both 
of the facilities that conducted all of the required monthly 
inspections had an alternate coordinator to assist the coordinator in 
managing the inspection program, including scheduling the inspections 
and following up with inspectors to ensure inspections are completed. 
In addition, the alternate coordinator at one of these facilities 
conducted inspections when inspectors had unforeseen circumstances that 
prevented them from completing the assigned inspections. In contrast, 
the two medical facilities that missed inspections did not have an 
additional control procedure, such as the use of an alternate 
coordinator. Without coordinators ensuring that the monthly inspections 
are conducted, VA medical facilities lack assurance that the inspection 
programs are meeting the objective to reduce the risk of diversion of 
controlled substances.
    Second, three of the four VA medical facilities in our review did 
not have written inspection procedures that were fully consistent with 
VHA's policy requirements. This likely contributed to their inspections 
not following certain VHA policy requirements. (See figure 1.)
[GRAPHIC] [TIFF OMITTED] T9370.001

    Note: At the four selected Department of Veterans Affairs (VA) 
medical facilities, we reviewed written inspection procedures that were 
included in the local inspection program policies, training manuals and 
other guidance documents and compared them to the Veterans Health 
Administration's (VHA) inspection program requirements included in 
VHA's 2010 policy. See Department of Veterans Affairs, Veterans Health 
Administration Handbook 1108.02, Inspection of Controlled Substances 
(Washington, D.C.: Mar. 31, 2010).
    aVA medical facility C had no written procedures for its pharmacy 
inspections. Although this VA medical facility's inspection program 
policy stated that inspections must follow the required procedures 
included in VHA's Handbook 1108.02, this handbook was not included in 
the guidance that inspectors told us they used in performing and 
implementing the inspection procedures.

    The one VA medical facility that had written inspection procedures 
that were consistent with VHA's policy requirements has an ongoing 
process to conduct comprehensive reviews of its procedures. At this 
facility, the coordinators had conducted separate reviews of the 
facility's procedures in coordination with two pharmacy managers, 
according to a facility official. In contrast, at the other three 
selected VA medical facilities, the coordinators' reviews of the 
facilities' procedures were not as comprehensive. For example, the 
coordinator at one facility told us he had compared the facility's 
procedures to the VHA requirements but did not involve other facility 
officials to verify the accuracy of his review.
    Third, while VHA relies on coordinators to ensure that the 
inspections are conducted correctly, we found that VHA's training 
course for coordinators lacks substantive information about VHA's 
required inspection procedures. VHA's training course for inspectors, 
in comparison, includes substantive information about the required 
inspection procedures. While two of the four coordinators we 
interviewed told us they were provided helpful on-the-job training at 
their medical facilities, which included shadowing the prior 
coordinator, three of them told us that additional coordinator training 
was needed.
    In our report we noted that missed inspections and gaps in 
facilities' local inspection procedures and coordinator training are 
inconsistent with federal internal control standards, which state that 
management should periodically review their procedures for 
effectiveness and provide proper training to achieve results. We 
concluded that missed inspections and gaps in inspection procedures and 
training could significantly limit VHA's ability to reduce the risk of 
diversion of controlled substances. To address these shortcomings, we 
recommended that VA ensure that VA medical facilities establish an 
additional control procedure, such as an alternate coordinator, to help 
prevent missed inspections as well as a process in which coordinators 
and other stakeholders compare facility inspection procedures to VHA's 
policy requirements and modify facility procedures, as appropriate. We 
also recommended that VA improve its coordinator training by ensuring 
that the training includes the inspection procedures that VHA requires. 
VA agreed with these recommendations and said it plans to take steps to 
implement them by October 2017.

Oversight of Controlled Substance Inspection Programs by Selected VA 
    Medical Facilities and Networks Is Inconsistent

    We found inconsistent oversight of the controlled substance 
inspection programs at selected VA medical facilities by facility 
directors and by the networks to which the facilities report. Directors 
at two of the four facilities had not implemented corrective actions to 
address missed inspections identified by coordinators in the monthly 
inspection reports that the directors had reviewed. In addition, one of 
four facility directors did not receive quarterly trend reports during 
our review period as required by VHA policy and did not implement a 
corrective action to ensure that he receives future reports. Further, 
we found that two of the four networks did not review their facilities' 
quarterly trend reports as required by VHA policy. Officials at one of 
these two networks told us that they were unaware of the requirement, 
while an official in the other network told us the officials 
responsible for reviewing the reports did not realize it was a 
requirement. \9\ One network that had reviewed the quarterly trend 
reports did not follow up with a facility in our review to ensure that 
the coordinator had submitted missed trend reports to the facility's 
director. We also found that this coordinator had not completed other 
quarterly trend reports, and the facility's director did not develop a 
corrective action plan to ensure the completion of these reports in the 
future.
---------------------------------------------------------------------------
    \9\ VHA included this network requirement in a 2014 memo that it 
issued in response to the VA Office of the Inspector General findings 
on weaknesses in the inspection programs. See VA, Memorandum on 
Controlled Substance Inspection Program Requirement, VA Office of 
Inspector General-Combined Assessment Program Findings (Washington, 
D.C.: July 9, 2014).
---------------------------------------------------------------------------
    In our report, we pointed out that the inconsistent oversight by 
the directors and networks is contrary to federal internal control 
standards, which call for oversight to be ongoing to assess 
performance, promptly remediate deficiencies, and hold individuals 
accountable for their responsibilities. We concluded in our report that 
without ongoing monitoring by facility directors and networks-including 
holding facilities accountable for correcting nonadherence to program 
requirements-VHA lacks reasonable assurance that facilities will 
correct deficiencies on a timely basis. To address these oversight 
problems, we recommended that VA ensure that medical facility directors 
have a process in place to document and correct nonadherence with 
program requirements. We also recommended that VA ensure that the 
networks review their facilities' quarterly trend reports and ensure 
that facilities take corrective actions when program nonadherence is 
identified. VA agreed with our recommendations and said it plans to 
take steps to implement them by October 2017.
    Chairman Bergman, Ranking Member Kuster, and Members of the 
Subcommittee, this concludes my statement. I would be pleased to 
respond to any questions that you may have at this time.

GAO Contacts & Staff Acknowledgments

    If you or your staff members have any questions concerning this 
testimony, please contact me at (202) 512-7114 ([email protected]). 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this statement. Other 
individuals who made key contributions to this testimony include Marcia 
A. Mann, Assistant Director; Pamela Dooley (Analyst-in-Charge); Krister 
Friday; and Carmen Rivera-Lowitt.

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Strategic Planning and External Liaison

    James-Christian Blockwood, Managing Director, [email protected], (202) 
512-4707, U.S. Government Accountability Office, 441 G Street NW, Room 
7814, Washington, DC 20548

                                 
               Prepared Statement of Keith H. Berge, M.D.
    Chairman Bergman, Ranking Member Kuster, and Members of the 
Committee,
    Thank you for the opportunity to speak with you today about drug 
diversion from the health care workplace. Such diversion is a crime 
that endangers all patients, health care employers, coworkers, and even 
endangers the diverters themselves. While we have long known of these 
hazards of patients being deprived of pain medicine by diversion, only 
fairly recently has the grave risk to extremely vulnerable patients 
been revealed by outbreaks of diseases such as blood poisoning by 
bacteria or viruses that have been transmitted by drug diverters 
swapping syringes in the commission of their crimes. In the process, 
many patients have been infected with potentially fatal illnesses. I 
have attached for your review a paper authored by CDC investigators 
outlining 6 such outbreaks over a 10 year period that resulted in 
illness and death in patients. One of the diversion/infection scenarios 
included Veteran's Affairs patients being exposed to a diverter that 
communicated his Hepatitis C infection to approximately 5O patients. 
This diverter was radiation technologist who traveled the country 
working for multiple employment agencies. He had been fired from 
multiple jobs for diverting fentanyl for his own use, but by simply 
lying about previous terminations on job applications, and in the 
absence of a national registry of radiation technologists, he had no 
trouble finding employment. In the darkened invasive radiology suites 
he would swap the fentanyl syringe on the anesthesia cart with one he 
has previously used to inject himself. He would then excuse himself to 
a restroom, inject himself with the stolen fentanyl, draw up tap-water, 
and repeat the process with the next patient's fentanyl. In this 
manner, he conveyed his potentially lethal illness to many innocent 
victims. The 8 patients described in these outbreaks were all in 
extremely vulnerable positions, either undergoing an invasive procedure 
while under anesthesia, or in an Intensive Care Unit. Clearly, such 
behavior is unacceptable, and in recognition of these dangers posed by 
diversion the Drug Enforcement Administration requires stringent drug 
control policies and procedures to be put in place to protect 
controlled substances from attack across all points of the 
manufacturing, distribution, dispensing, administration and disposal 
spectrum. The drugs used in the healthcare setting are highly sought 
after drugs of abuse, both by addicts and by those who would profit 
richly by the sale of stolen drugs.
    Experience at the Mayo Clinic and elsewhere has shown the necessity 
of having robust surveillance, detection, investigation, and 
intervention programs in place in order to minimize the risk to all 
involved. While it will be impossible to completely eliminate drug 
diversion from the healthcare workplace, it is imperative that robust 
systems rapidly detect and halt such activity. I have attached for your 
review an article from Mayo Clinic authors, myself included, which 
outlines our program from its inception to very successful 
implementation. While we continue to try to improve our system, it has 
proven quite effective in identifying a host of drug diverters since 
implementation 7 years ago. Diverters come from diverse backgrounds, 
and include physicians, pharmacists, pharmacy techs, nurses, nursing 
students, nursing assistants, janitors, patients, patient's family 
members, nursing home attendants, hospice workers, and strangers off 
the street. The stories are incredible, but they all point to the 
powerful draw that these drugs have over addicts. As such, it is not 
good enough to merely have effective policies and procedures on the 
books; they must actually be rigorously followed. Diverters are 
generally clever and desperate, and they will gravitate into the area 
of a system where they perceive the drugs to be most vulnerable to 
attack. It therefore behooves any healthcare facility to have a 
reputation for being effective at rapidly identifying, terminating, and 
prosecuting drug diversion and drug diverters. Only by doing so can we 
protect the most vulnerable of our patients from preventable harm. As 
I've stated, this problem will never go away, so we must become very 
good at rapid intervention. Only by instituting and following effective 
anti-diversion policies and procedures will this be possible.
    I thank the Committee for its attention to this important issue, 
and stand ready to answer any questions you may have.

    Keith H. Berge, M.D.
    Consultant, Anesthesia & Perioperative Medicine
    Chair, Medication Diversion Prevention Subcommittee

                                 
                       Statements For The Record

                 AMERICAN SOCIETY OF ANESTHESIOLOGISTS
Jeffrey Plagenhoef, M.D., President, American Society of 
    Anesthesiologists

    On behalf of more than 52,000 members, the American Society of 
Anesthesiologists r (ASA) would like to thank Chairman Bergman, Ranking 
Member Kuster and members of the Subcommittee for holding the hearing, 
``Assessing VA's Risks for Drug Diversion,'' and providing ASA the 
opportunity to submit a Statement for the Record. We greatly appreciate 
your willingness to discuss this important topic and how it impacts our 
nation's Veterans. Physician anesthesiologists are health care 
professionals who manage and administer a large number of controlled 
substances in their roles as perioperative physicians, and are pain 
medicine specialists, diagnosing and treating patients with complex 
pain conditions. As leaders in patient safety, anesthesiologists 
thereby are uniquely positioned to address this issue. ASA believes 
prevention of, and education about, drug diversion activities are 
critical. We look forward to working with the Committee and others on a 
multidisciplinary approach to minimize the potential for drug diversion 
and ensure patients in the Department of Veteran Affairs continue to 
receive high-quality care.
    It is no secret that the potential for drug diversion by 
clinicians, staff, patients, family members and others is a real threat 
at any hospital, surgery center, nursing home, pharmacy or other care 
organizations. News media and internal reviews, such as the February 
2017 GAO report on controlled substance inspection programs, \1\ have 
played an important role in revealing some of these instances where 
health care professionals have diverted drugs for their own use, and in 
some cases, the patient fatalities that have been the result. Moreover, 
a report by the Substance Abuse and Mental Health Services 
Administration (SAMHSA) illustrates that drug diversion contributed to 
a fourfold increase in substance abuse treatment admissions between 
1998 and 2008 among individuals aged 12 and older. \2\ It is also 
widely known that certain healthcare specialties, such as 
anesthesiology, are associated with increased risk for abuse of and 
dependency on certain classes of drugs. For this reason, ASA feels 
strongly about identifying and adopting strategies that lead to 
successful drug diversion deterrence programs. As a result, ASA's 
Committee on Occupation Health has created a model curriculum on 
substance use and disorder. This curriculum identifies the problem of 
drug diversion and addiction, specifically in the occupation of 
anesthesiology, detection, re-entry into the occupation, as well as 
prevention. \3\
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    \1\ United States Government Accountability Office, Actions Needed 
to Ensure Medical Facility Controlled Substance Inspection Programs 
Meet Agency Requirements, February 2017, Available at: http://
www.gao.gov/assets/690/682804.pdf
    \2\ The TEDS Report, Substance Abuse Treatment Admissions Involving 
Abuse of Pain Relievers: 1998 and 2008, July 15, 2001. Available at: 
https://www.dea.gov/divisions/dal/2010/dallas071610.pdf?utm--
source=ABCeAlert&utm--
campaign=Hospital%20Drug%20Diversion%20Prevention&utm--content=2-20-17
    \3\ SUD Curriculum, ASA Committee on Occupational Health, Tetzlaff, 
John, November 12, 2015, Available here: https://www.asahq.org//media/
sites/asahq/files/public/resources/asa%20committees/substance-use-
disorder-model-curriculum-42216.pdf?la=en
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    As the Committee is aware, there are institutions that already 
implement successful drug diversion deterrence programs. In fact, some 
of these programs have been highlighted in testimony for this hearing. 
In addition, the Centers for Medicare & Medicaid Services (CMS) has 
resources describing the role of practitioners in preventing drug 
diversion.
    Furthermore, Congress and Federal agencies have taken important 
steps to curb opioid abuse and misuse. For example, during the 114th 
session, Congress passed the Comprehensive Addiction and Recovery Act 
(CARA), which included ASA-supported provisions to expand access to 
naloxone; allow patients to partially fill prescriptions for controlled 
substances; reauthorize NASPER, a public health grant program for 
prescription drug monitoring programs; and enable National Institutes 
for Health (NIH) to intensify pain research. Additionally, the Centers 
for Disease Control and Prevention (CDC) issued the Guideline for 
Prescribing Opioids for Chronic Pain, which ASA collaborated with the 
agency to develop.
    There has been a heightened focus by regulators to tighten 
prescription requirements and work to change prescribing practices in 
response to the opioid epidemic. ASA is a long-time proponent of the 
use of multimodal, multidisciplinary pain management strategies 
including interventional techniques that will decrease reliance on 
opioids for chronic pain. While efforts to address the opioid epidemic 
are underway, there is a growing need to address drug diversion. ASA 
believes it is important to consider these alternative treatments as 
not only a method of decreasing patient reliance on opioids, but to 
also reduce the incidence of drug diversion.
    The Drug Enforcement Agency (DEA) is heightening its scrutiny of 
healthcare organizations. As evidenced DEA's FY 2016 Performance 
Budget, there was a 9% increase in the budget devoted to Diversion 
Control. \4\ It is no surprise that hospitals, surgery centers, nursing 
homes, pharmacies and other organizations will be held accountable for 
a lack of oversight and diligence when diversion occurs. Therefore, it 
would be prudent for health care providers, including 
anesthesiologists, to take preemptive steps to mitigate risks.
---------------------------------------------------------------------------
    \4\ Drug Enforcement Agency, FY 2016 Budget and Performance 
Summary, Available here: https://www.justice.gov/sites/default/files/
jmd/pages/attachments/2015/01/30/28--bs--section--ii--chapter-----
dea.pdf
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    As previously mentioned, there are already institutions 
implementing successful drug diversion deterrence programs and a lot to 
be learned from the information that already exists. ASA believes that 
training and education are integral to successful drug diversion 
deterrence programs. ASA recommends that all employees be educated on 
how to identify, detect and report potential drug diversion. It is also 
important that they are able to do this anonymously, either through a 
telephone hotline or other immediate method. A limited number of health 
care professionals should also be properly trained on the use of 
automated dispensing units, with the caution that overreliance on these 
units can create a false sense of security. Multimodal pain management 
techniques should be considered and employed whenever possible in order 
to reduce reliance on opioids. Additionally, policies and procedures 
should be developed with respect to waste/destruction of controlled 
substances and segregation of duties, including the ordering, receipt, 
inventory, storage, and stocking of controlled substances in different 
locations. It is also advisable to frequently review drug management 
data, including investigating and reviewing discrepancies on a timely 
basis and conducting `unscheduled' reviews.
    ASA believes it is important to proactively take steps to mitigate 
the risk of drug diversion. Having procedures in place that inform 
every employee of the importance of preventing drug diversion, 
including disciplinary actions, can reduce risks. Even with certain 
safeguards in place, institutions are vulnerable. Therefore, it is 
important to work closely with and in cooperation with law enforcement, 
including local police and the DEA.
    ASA thanks the Committee for the opportunity to submit this 
Statement for the Record and would like to offer our members as a 
resource to the Committee, and also to emphasize our willingness to 
work with you and the Department of Veterans Affairs to address the 
issue of drug diversion.

    Sincerely,

    Jeffrey S. Plagenhoef, M.D.
    President
    American Society of Anesthesiologists

                                 
                          VA OIG QFR RESPONSE
    March 24, 2017

    The Honorable Jack Bergman
    Chairman
    Subcommittee on Oversight and Investigations
    Committee on Veterans' Affairs
    U.S. House of Representatives Washington, DC 20151

    Dear Mr. Chairman:

    At the February 27, 2017 hearing before the Subcommittee, Mr. Nick 
Dahl, Deputy Assistant Inspector General for Audits and Evaluations, 
was asked a question regarding a recent Office of Inspector General 
(OIG) report, Review of Alleged Human Resources Delays at the Atlanta 
VA Medical Center, that he replied to that he would provide the 
information for the record.
    The question was from Congressman Mike Bost dealing with the number 
of background checks that were not completed at the Atlanta VA Medical 
Center (VAMC) for positions that were high-risk or testing designated 
positons. The Atlanta VA Medical Center did not maintain adequate 
records for us to identify the number individuals who had not completed 
the background investigation process during our audit work. On February 
3, 2017, we requested additional information on the status of the 
reviews. In a response dated February 22, 2017, the Atlanta VAMC 
Director advised that they determined that 863 background 
investigations needed to be adjudicated. This number varies from the 
original reported backlog of 200 due to a severe lack of documentation 
and subsequent discovery that Human Resource personnel performing the 
background adjudication checks during this timeframe did not have the 
necessary training or the minimal background level.
    We request that this letter be included in the hearing record. 
Thank you for your interest in the OIG.

    Sincerely,

    /s/

    MICHAEL J. MISSAL

    Copy to: The Honorable Mike Bost

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