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



  LEGISLATIVE HEARING ON H.R. 3497, H.R. 4245, A DRAFT BILL REGARDING 
 PURCHASE CARD MISUSE, AND A DRAFT BILL REGARDING THE MEDICAL SURGICAL 
                          PRIME VENDOR PROGRAM

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

                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

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

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                        WEDNESDAY, MARCH 7, 2018

                               __________

                           Serial No. 115-49

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
                [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
       

        Available via the World Wide Web: http://www.govinfo.gov
        
        
                               __________
                               
                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
35-386                     WASHINGTON : 2019 




        
                     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 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.
                            
                            
                            
                            
                            C O N T E N T S

                              ----------                              

                        Wednesday, March 7, 2018

                                                                   Page

Legislative Hearing On H.R. 3497, H.R. 4245, A Draft Bill 
  Regarding Purchase Card Misuse, And A Draft Bill Regarding The 
  Medical Surgical Prime Vendor Program..........................     1

                           OPENING STATEMENTS

Honorable Jack Bergman, Chairman.................................     1
Honorable Ann Kuster, Ranking Member.............................     3
Honorable Tim Walz, U.S. House of Representatives................     5
Honorable Kathleen Rice, U.S. House of Representatives...........     7
Honorable Scott Peters, U.S. House of Representatives............     8
Honorable McMorris Rodgers, U.S. House of Representatives........    10

                               WITNESSES

Fred Mingo, Director of Program Control, Program Executive 
  Office, Electronic Health Record Modernization Program, U.S. 
  Department of Veterans Affairs.................................     9
    Prepared Statement...........................................    24

        Accompanied by:

    Ricky Lemmon, Acting Deputy Chief Procurement Officer, 
        Veterans Health Administration, U.S. Department of 
        Veterans Affairs

    John Adams, Director of Corporate Travel, Office of 
        Management, U.S. Department of Veterans Affairs

    Katrina Tuisamatatele, Health Portfolio Director, Office of 
        Information and Technology, U.S. Department of Veterans 
        Affairs


Louis Celli, Jr., Director, Veterans Affairs & Rehabilitation 
  Division, The American Legion..................................    12
    Prepared Statement...........................................    26
Scott Denniston, Executive Director, National Veterans Small 
  Business Coalition.............................................    13
    Prepared Statement...........................................    29

                             FOR THE RECORD

Ken Wiseman, Associate Director, National Legislative Service, 
  Veterans of Foreign Wars of The United States..................    32
Congresswoman Cathy McMorris Rodgers.............................    33

 
  LEGISLATIVE HEARING ON H.R. 3497, H.R. 4245, A DRAFT BILL REGARDING 
 PURCHASE CARD MISUSE, AND A DRAFT BILL REGARDING THE MEDICAL SURGICAL 
                          PRIME VENDOR PROGRAM

                              ----------                              


                        Wednesday, March 7, 2018

             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 2:02 p.m., in 
Room 334, Cannon House Office Building, Hon. Jack Bergman, 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Bergman, Dunn, Arrington, Kuster, 
Rice, Peters, and Walz.
    Also Present: Representative McMorris Rodgers.

          OPENING STATEMENT OF JACK BERGMAN, CHAIRMAN

    Mr. Bergman. Good afternoon. This hearing will come to 
order. I want to welcome everyone to today's legislative 
hearing on H.R. 3497, H.R. 4245, a draft bill entitled the 
Veterans Affairs Purchase Card Misuse Mitigation Act, and a 
draft bill requiring the Secretary to carry out the Medical 
Surgical Prime Vendor program using multiple prime vendors.
    Before we begin, I would like to ask unanimous consent for 
our colleague Conference Chair Cathy McMorris Rodgers to sit on 
the dais and participate in these proceedings when she arrives.
    Also, the Veterans of Foreign Wars has informed us that 
they will provide a statement regarding the hearing, so I ask 
unanimous consent that it be entered into the record.
    Without objection, so ordered.
    Mr. Bergman. I am also happy to welcome Ranking Member Walz 
as an ex officio Member of the Subcommittee. Glad you are with 
us.
    Our first two pieces of legislation this afternoon relate 
to VA's Electronic Health Records Modernization Program. Mrs. 
McMorris Rodgers will present her legislation, H.R. 3497, upon 
her arrival.
    First, I would like to briefly discuss a bill that I am 
proud to sponsor with Chairman Roe, as well as Ranking Members 
Walz and Kuster, H.R. 4245, the Veterans Electronic Health 
Record Modernization Oversight Act of 2017.
    The EHRM program is a potential game changer for VA. If 
carried out successfully, VA and DoD can finally achieve a 
seamless lifetime medical record, eliminate the need to fax 
records back and forth with community providers, and break the 
ruinous cycle where legacy systems cost of maintenance consumes 
nearly the entire IT budget.
    EHRM is as transformational as it is big and expensive, and 
Congress needs to keep a watchful eye on it. H.R. 4245 requires 
VA to provide us with key contracting documents and those that 
indicate the program's health. It also requires VA to notify 
Congress of any significant schedule slip, cost increase, loss 
of data, privacy breach, or other adverse contractual event. 
Finally, it ensures that my colleagues and I get the 
information we actually need in a timely fashion, while not 
directing the VA to spend time and money producing unnecessary 
reports or duplicative documentation.
    Next, I intend to sponsor the Veterans Affairs Purchase 
Card Misuse Mitigation Act, which is currently in draft form 
with Miss Rice, Mr. Bost, and Dr. Dunn. This will would require 
the Secretary to revoke the purchase card or purchase card 
approval authority for any employee who is found to have 
knowingly misused the purchase card.
    Huge sums of money flow through purchase cards in the VA, 
about $4 billion a year as of 2015 the last time GAO did a 
review, and the volume of spending is poised to grow much 
larger given that the most recent NDAA increased the micro-
purchase transaction limit from $3,500 to $10,000.
    This Committee heard a great deal about purchase card 
misuse in 2015; huge amounts of unauthorized commitments were 
alleged. The Inspector General recently completed his 
definitive report on the matter and found that the real amounts 
to be much higher than originally thought. Unauthorized 
commitments estimated at roughly $520.7 million for 
prosthetics, including purchases worth $256.7 million, for 
which VA may have paid unnecessarily high prices.
    While most of the purchases were necessary supplies that 
were delivered, we will never know how much money was wasted 
because a lack of documentation makes drawing firm conclusions 
frustratingly difficult.
    VA tightened its internal controls in response, but we 
still hear of troubling incidents. The Inspector General 
recently found widespread split purchasing in the New Jersey 
Health Care System, more concentrated splitting in VISN 15, and 
unauthorized commitments and subterfuge about the destruction 
of records at the VA contracting office in the Bronx.
    A few weeks ago, the Office of Special Counsel revealed an 
apparent scheme by two employees at the Bedford, Massachusetts 
Medical Center to enrich a family member through purchase card 
orders. And this very morning the IG released his final report 
on the Washington, DC Medical Center, finding purchase card 
misuse, among many other distressing incidents of 
mismanagement. In DC, 151 people held 283 purchase cards.
    Most of the purchase card holders are outside the typical 
chain of command and their usage cannot be properly tracked.
    The IG highlighted many examples of gratuitous waste and 
one example of outright graft, which I would like to point out 
that the VISN did discover and address.
    This bill attempts to head off purchase card misuse as the 
micro-purchase threshold increases. As soon as a bona fide 
investigation determines someone has knowingly misused a 
purchase card, the card is taken away. The Department can 
pursue the appropriate disciplinary penalty according to 
existing policies, but in the meantime the potential for future 
misuse is eliminated. It is as simple as that.
    Finally, I intend to sponsor legislation with Mr. Peters, 
Mr. Banks, and Dr. Dunn to direct the Secretary to continue 
carrying out the Medical Surgical Prime Vendor Program using 
the existing system of regional prime vendors.
    At our hearing in December, Committee Members 
overwhelmingly expressed the view that it would be a mistake 
for VA to move to a model with one national prime vendor that 
not only distributes the medical and surgical supplies, but 
also creates the formulary on VA's behalf and selects the 
suppliers. I understand VA heard the same message from industry 
and now does not intend to pursue that model. So I hope to get 
additional clarity in today's questioning on how the VA still 
opposes this bill; however, I will defer to my colleagues to 
elaborate on the draft legislation.
    I now yield to Ranking Member Kuster for any opening 
statement and remarks on today's legislation she may have.

        OPENING STATEMENT OF ANN KUSTER, RANKING MEMBER

    Ms. Kuster. Thank you, Chairman Bergman, for holding this 
hearing, and I would like to welcome Ranking Member Walz and, 
when she arrives, our esteemed colleague Congresswoman McMorris 
Rodgers, here to advocate on behalf of the bipartisan 
legislation that we have before us.
    I also want to welcome our witnesses, who are here to 
provide thoughtful testimony on how we might improve the 
legislation to ensure that it has the intended effect, which is 
helping to improve the Veterans Administration and the lives of 
veterans.
    I am proud of the bipartisan oversight and legislative work 
that we do on this Committee. This Subcommittee serves as a 
model for how Congress should work, and I should say our Full 
Committee serves as a model.
    Before I turn my remarks on the four bills we have on the 
agenda today, I do want to take a moment to address the IG 
report that was released just this morning on the DC VMAC, 
Washington, DC, and Secretary Shulkin's announcement this 
morning that VISNs 1, which is New England, 5, which is DC, and 
22, the Desert Pacific Health Care Network, will be placed into 
receivership and Brigadier General Gamble will oversee their 
restructuring.
    This is a critical moment. For those of us in VISN 1 in New 
England, we have spent the last year-plus working with 
Secretary Shulkin and the leadership at the VA on some very 
troubling, disturbing allegations of mismanagement and veterans 
that had been harmed, not just in Manchester, New Hampshire, 
where the VA Health Center that I have been working with and 
vets that I represent, but also Bedford, Massachusetts, and our 
colleague Mr. Poliquin has been involved with Maine.
    I know that my colleagues from California have had issues 
in VISN 22 and the whole Committee is aware of the issues in 
VISN 5.
    The DC IG report found that leadership at the medical 
center, the VISN, and VA Central Office knew about the supply 
chain and logistics problems at DC VAMC and did not take 
appropriate steps. The Desert Pacific network includes the 
Phoenix VA, where we first learned about the secret waiting 
list that ultimately led to the Choice Program. And in New 
England, where my constituents receive care, the hospital 
director at the Manchester VAMC was removed because significant 
patient care and facility infrastructure concerns were not 
addressed.
    So I would request that our Oversight and Investigation 
Committee or the Full Committee hold a hearing on leadership 
failures at the three networks at VA Central Office and that we 
continue to provide oversight on the plan being developed for 
restructuring of these organizations, including, as we will 
discuss today, the VA procurement investigation.
    At least seven Members of our Committee represent districts 
within these three networks and I am sure that many more of our 
Members have constituents who receive their care there.
    Now, returning to the legislation before us today, we 
address of-the-moment issues for our Subcommittee. Ranking 
Member Walz's Veterans Electronic Health Record Modernization 
Oversight Act will ensure that this Committee receives the 
information we need to conduct proper oversight of this 10-
year, $16 billion project. I think I speak for all of us when I 
say we have been advocating for an interoperable electronic 
health record since we were first elected to Congress. Finally, 
finally, the solution is in sight.
    When Secretary Shulkin signs the contract, and we believe 
that that will happen this month, veterans will finally have 
the same health care records as the DoD, a modern electronic 
health record that will meet their health care needs.
    The next challenge will be to ensure the VA stays on 
schedule with its installation and implementation, stays within 
the budget, and causes the least amount of disruption to 
patient care. And I know Dr. Roe, our chair, has been 
admonishing all of us to understand that this will take time 
and it will be a transition, but it is important that we 
minimize the disruption.
    Our job here is to keep the VA on track and Ranking Member 
Walz's bill will give us the tools and the information to do 
just that.
    Chairman Bergman and Congresswoman Rice's draft legislation 
to address purchase card abuse is also much-needed legislation 
that I hope this Committee will send to the floor without 
delay.
    Yesterday, I publicly revealed my request to Secretary 
Shulkin to remove Dr. Mayo-Smith as leader of the VA New 
England Health Care System and he, Secretary Shulkin, did 
announce this morning that Dr. Mayo-Smith will retire. The 
issues our Committee has investigated in Bedford and Manchester 
demonstrate the need for greater accountability and improved 
leadership.
    Purchase card abuse continues to be an issue and just last 
month we learned in an Office of Special Counsel report that an 
employee at the Bedford, Massachusetts VA medical facility 
abused a purchase card to buy supplies from a family member's 
business, as my chair has acknowledged. We also learned that 
this employee was authorized to use a purchase card even after 
being disciplined for misuse. This is unacceptable and that 
employee got what amounted to simply a slap on the wrist.
    Employees who misuse purchase cards should be held 
accountable and should be prevented from being a purchase card 
holder or authorizing official. This legislation will ensure 
that taxpayer dollars are protected from purchase card misuse. 
Employees misusing VA purchase cards cannot be trusted as good 
stewards of taxpayer dollars and I support the legislation 
tackling this issue.
    And, finally, Congressmen Bergman, our chair of the 
Subcommittee, and Peters have written legislation to ensure VA 
fixes its Medical Surgical Prime Vendor formulary.
    As we heard from the GAO last November, clinicians who 
treat veterans should be at the center of the decision-making 
of which supplies should be included in the formulary. This is 
not a decision that should be outsourced to vendors who have no 
experience treating patients. This idea to outsource the 
formulary development suggested by VA goes against best 
practices in the private and non-profit health care industry. 
This legislation should ensure that VA follows best practices 
and sticks to a timeline, so that VA facilities and vendors 
have a predictable, functional medical surgical supply system.
    Thank you, Chairman Bergman, and I yield back.
    Mr. Bergman. Thank you, Ranking Member Kuster.
    And given the Secretary's announcement today regarding 
adverse actions against three VISN directors, I would be happy 
to continue working with the Ranking Member and the rest of the 
Subcommittee to get answers.
    I sent a letter with Ranking Member Kuster last month to 
the VA, which we have yet to receive a response. So we are 
going to continue working on that.
    We will now hear from Ranking Member Walz, speaking in 
support of H.R. 4245, the Veterans Electronic Health Record 
Modernization Oversight Act of 2017.
    Ranking Member Walz, you are recognized for 5 minutes.

                 OPENING STATEMENT OF TIM WALZ

    Mr. Walz. Well, thank you, Chairman. Thank you all for 
being here, but thank you, Chairman, for the courtesy of 
speaking on this, and to the Ranking Member.
    Before we start, I would like to say I thank you, Chairman, 
for backing. I fully support Ranking Member Kuster's call for a 
hearing or whatever is necessary on the leadership failures in 
New England, Capital Region, and Desert Pacific Regions. I 
believe Secretary Shulkin has taken the right steps of removal, 
but we need to exercise our oversight authority, which this 
Subcommittee has proven up to that task.
    We also need to keep pressure on the VA to improve DC VA's 
supply chain management capabilities. We visited about a year 
ago following the interim report and pushed for more hiring of 
logistics and HR staff, cleaning of supply spaces that ensure 
at least enough supplies to prevent further delays. I want to 
know and praise the dedicated workers and providers who did 
ensure that no patients were harmed despite incompetent 
leadership and supply chain failures at the hospital. Now the 
VA must work to ensure that every single one of their 40 
recommendations of the IG report are followed through and VA is 
held accountable.
    With that, I appreciate the opportunity to speak on H.R. 
4245, the Veterans Electronic Health Record Modernization Act. 
I, along with the Chairman, the Ranking Member and Chairman Roe 
of the Full Committee, introduced this to ensure that we 
continue to exercise one of our most important functions, 
oversight.
    And the Ranking Member was right. I was looking back. In 
March of 2007, sitting right down here, I made the case of an 
interoperability between records was absolutely critical. I 
think every one of us who has come here, matriculated in here 
has said that, and one of the first things we do of getting 
there. In June of 2017, and many of us will remember that day, 
the Secretary answered this call and announced VA's intent to 
adopt the same EHR currently utilized by Department of Defense. 
Now Congress and veterans are eager to see the implementation 
of this new system.
    Frankly, the future successful delivery of VA and 
community-based health care services to veterans really rests 
on the successful implementation of this record management 
system. In order to deliver on promises that we have made to 
veterans in regard to accessibility and quality of care, we 
must ensure VA has every resource necessary to the development 
of this new system. However, Congress must be able to track 
these resources and the impact of their progress. In order to 
be good stewards of the taxpayer money, we must be able to 
carry out those oversight duties.
    This legislation that we are going to talk about simply 
requires VA to share documents, plans, reports, and information 
surrounding the adoption and implementation of the new EHR 
management system. Additionally, the legislation will require 
VA to notify Congress quickly if there is any significant 
adverse event such as a cost increase, schedule delay, or 
breach of security. That is why I really appreciate the support 
of H.R. 4245 and its inclusion in today's discussion.
    I also appreciate the VA's willingness to continue to work 
with our office to ensure this legislation is clear, 
reasonable, effective, and can be implemented the way it needs 
to be. Our intention is not to micro-manage the implementation 
of this record. Our intent is, is to make sure on something 
this big and this costly and this important that there is 
ownership for everyone; that the VSOs are included, which I am 
glad to see Lou is at the table, this is going to be critical. 
And I think the Chairman is exactly right. He brings a wealth 
of knowledge, he has implemented these in the private sector, 
having watched a large medical institution like the Mayo Clinic 
institute an upgrade to a new electronic medical record.
    We need to keep expectations high of what we are going to 
achieve, but realistic in that this is going to take time and 
there are going to be things along the way that need to be 
addressed. I think the biggest thing this legislation is, is no 
surprises, Congress being informed, let us know how things are 
going, so that we can inform veterans.
    So, thank you, Chairman and Ranking Member, and I yield 
back.
    Mr. Bergman. Thank you, Ranking Member Walz.
    Next we will hear from Miss Rice speaking in support of the 
draft Veterans Affairs Purchase Card Misuse Mitigation Act.
    Miss Rice, you are recognized for 5 minutes.

               OPENING STATEMENT OF KATHLEEN RICE

    Miss Rice. Thank you, Mr. Chairman.
    I would like to thank Chairman Bergman and Ranking Member 
Kuster for including the draft bill regarding purchase card 
misuse on today's legislative hearing agenda for the 
Subcommittee on Oversight and Investigations. I would also like 
to thank all of the witnesses who are here today for your 
testimony and for sharing your views on the draft legislation.
    I appreciate the opportunity to join Chairman Bergman in 
introducing this important piece of legislation as the lead 
Democratic sponsor. This bill would prohibit employees at the 
Department of Veterans Affairs who are found to have knowingly 
misused VA purchase cards from serving as purchase card holders 
or approving officials. I believe this legislation is necessary 
to prevent any future misuse of purchase cards and will provide 
greater accountability within the VA.
    Now, in May of 2015, this Subcommittee held a hearing on 
waste, fraud, and abuse in the VA's purchase card program, 
during which alarming testimony was presented about a lack of 
internal controls at VA that had led to misuse of taxpayer 
funds through the purchase card program. During the hearing, 
former Subcommittee Chairman Coffman and I requested that the 
VA Office of Inspector General review allegations of 
unauthorized commitments at a VA facility in my home state, New 
York, in the Bronx.
    In reviewing these allegations, the VA OIG determined that 
the purchase card program manager erroneously reported 
approximately $54.4 million of contract purchases in fiscal 
year 2011 and 2012, because the contract manager did not 
provide oversight or ensure proper implementation of the 
required Federal procurement data system reporting.
    VA OIG also identified 11 unauthorized commitments totaling 
about $457,000 in improper payments for prosthetic purchases 
that exceeded the warrants of the purchasers.
    Purchase card misuse continues to be a problem at VA 
facilities. In late January of this year, the Office of the 
Special Counsel released a report finding that a VA employee at 
a medical center in Massachusetts had misused a purchase card 
to make nearly $1 million in improper purchases. Recent 
examples such as this reveal a need for legislation that will 
support effective oversight of the purchase card program and 
help to increase accountability at the VA.
    I thank Chairman Bergman for his leadership on this bill to 
address such cases of purchase card misuse that harm the public 
trust that VA is properly executing its duties. As Members of 
the Committee on Veterans Affairs, it is our responsibility to 
take allegations of waste, fraud, and abuse seriously, and 
ensure that taxpayer funds are not misused to the detriment of 
our Nation's veterans.
    Thank you, Mr. Chairman, and I yield back.
    Mr. Bergman. Thank you, Miss Rice.
    Now we will hear from Mr. Peters, speaking in support of 
the draft medical surgical prime vendor legislation.
    Mr. Peters, you are recognized for 5 minutes.

               OPENING STATEMENT OF SCOTT PETERS

    Mr. Peters. Thank you very much, Mr. Chairman, and thanks 
to Ranking Member Kuster. And thanks also to Mr. Banks in 
particular for working with me to improve the Medical Surgical 
Prime Vendor Program, including the bill we are considering 
today.
    Last November, Mr. Banks and I hosted a successful 
roundtable with the VA and medical device companies to get 
feedback on the MSPV Program. We kicked off a good discussion 
and today we are continuing the conversation to help this 
program on track with all stakeholders at the table.
    This bill will require the VA to award contracts to at 
least two regional prime vendors for medical supplies, a great 
first step to improve the MSPV Program by fostering 
transparency and creating competition to drive prices down. It 
is also critical that we have doctors, nurses, and other 
medical professionals advising us on which supplies and devices 
are needed to create a formulary, so the VA can provide proper 
care. Ultimately, we want to help the VA to be a better 
business partner; we know it wants to be a better business 
partner. We want to give veterans the best treatment by 
ensuring we get the right people at the table to make these 
clinical decisions.
    I look forward to working on this bill with my colleagues 
and for further discussions. And, with that, Mr. Chairman, I 
yield back.
    Mr. Bergman. Thank you, Mr. Peters.
    Well, Mrs. McMorris Rodgers is en route, but since she is 
not here yet, what we will do is we are going to start. I will 
do the introduction of the panel and then we will see if she 
shows up by that time, but the point is, when she arrives, we 
will stop what we are doing at that point and hear from her.
    So, you know, at this point I would like to now welcome the 
Members of our panel who are seated at the witness table. With 
us today from VA we have Mr. Fred Mingo, Director of Program 
Control for the Electronic Health Record Modernization Program. 
He is accompanied by Mr. Ricky Lemmon, who is the Acting Deputy 
Chief Procurement Officer for the Veterans Health 
Administration.
    He is also accompanied by Ms. Katrina Tuisamatatele--I 
think I got close--and her role is the Health Portfolio 
Director for the Office of Information and Technology.
    Also accompanying Mr. Mingo is Mr. John Adams, Director of 
corporate Travel in the Office of Management, seated back 
there.
    And also on the panel we have Mr. Louis Celli, Director of 
the Veterans Affairs & Rehabilitation Division at The American 
Legion. Finally, we have Mr. Scott Denniston, the Executive 
Director of the National Veterans Small Business Coalition.
    Mr. Mingo, you are recognized for 5 minutes.

                    STATEMENT OF FRED MINGO

    Mr. Mingo. Good afternoon, Chairman. Chairman Bergman, 
Ranking Member Kuster, and Members of the Committee, thank you 
for this opportunity to present VA's views on pending bills 
before the Committee.
    Joining me today are Ms. Katrina Tuisamatatele, OIT; Mr. 
John Adams, OM; Mr. Ricky Lemmon, VHA; who can speak more 
specifically about legislation in their area.
    The intent of H.R. 3497 is to provide veterans access to 
their personal medical history, enabling them to share their 
medical records with VA and community providers. This 
legislation directs the Secretary to carry out a pilot program 
establishing a secure, portable medical records storage device. 
VA does not support this legislation due to a number of 
challenges.
    First, doctors have been reluctant to accept plug-in 
electronic devices from patients because of network security 
and compatibility issues with electronic health records. 
Second, even with a portable storage device, veterans may not 
receive a copy of their most current medical record. Depending 
upon when files are loaded into the device, it may not 
represent the complete health record, including important 
doctor's notes or test results ordered from a previous visit.
    Lastly, this legislation would take resources away from the 
VA's current efforts to establish a single electronic health 
record that is interoperable with DoD and community providers.
    VA supports providing veterans access to their medical 
records and data, and believes that this legislation would not 
achieve that outcome.
    H.R. 4245 requires the VA to submit several project 
management documents related to the Electronic Health Record 
Modernization Program. VA supports this legislation and 
believes transparency is important to the success of the EHRM 
Program. The EHRM Program Executive Office would like to work 
with the Committee to develop a mutually agreeable timeline to 
brief staff on these project management documents. We are 
committed to providing quality and accurate project management 
documents to the Committee.
    The draft purchase card bill directs the Secretary to 
prohibit employees found to have knowingly misused a VA 
purchase card from further serving as a purchase card holder or 
approving authority. VA supports the draft bill, as it would 
enhance the Department's efforts to reduce potential fraud, 
waste, and abuse with the VA charge card program. In addition, 
it would reduce charge card misuse and minimize costly 
reconciliation when unauthorized commitments are identified.
    VA believes this legislation will support sound charge card 
program oversight and encourage appropriate staff to strictly 
adhere to purchasing requirements as outlined in VA financial 
policy.
    Lastly, the draft Medical Surgical Prime Vendor bill would 
statutorily define the structure of VA's MSPV Program and the 
number of items provided in its formulary. VA opposes this bill 
for a number of reasons.
    First, Congress has already provided and the Federal 
Acquisition Regulation has already implemented suitable tools 
for VA to make sound business decisions in developing the MSPV 
Program. Secondly, agencies are required to conduct market 
research as part of their acquisition-planning efforts. VA has 
a further requirement to conduct additional market research to 
fulfill our mandate under the Veterans First Contracting 
Program. This market research enables VA to structure 
acquisitions appropriately based on the number and types of 
vendors available, the geographic areas they serve, and the 
need to ensure supply chain availability.
    The current MSPV structure is based on a judgment call to 
apply the criteria provided by Congress and the FAR Council. 
Legislation that stipulates the MSPV structure eliminates VA's 
ability to change and develop according to market conditions. 
Also, legislating the number of formulary items to be 
contracted within arbitrary timeframes could have unintended 
consequences.
    Mr. Chairman, this concludes my opening statement. We are 
happy to answer any questions from you or Members of the 
Committee.
    Thank you.

    [The prepared statement of Fred Mingo in the Appendix]

    Mr. Bergman. Thank you, Mr. Mingo.
    And we will now hear from Mrs. McMorris Rodgers, who has 
just joined us, speaking in support of H.R. 3497, the 
Modernization of Medical Records Access for Veterans Act of 
2017.
    Mrs. McMorris Rodgers, you are recognized for 5 minutes.

          OPENING STATEMENT OF CATHY MCMORRIS RODGERS

    Mrs. McMorris Rodgers. Thank you, Chairman. I appreciate 
you making the time.
    I was on my way over and I was reading ``Political 
Playbook,'' the Stars and Stripes article about what was just 
uncovered at the Department of Veterans Affairs here in DC, but 
what really caught my eye was it talks about more than 1300 
boxes containing veterans' personal health and identification 
information were found unsecured in a warehouse, the hospital 
basement in a trash bin, according to the report. Millions of 
dollars were spent without the controls to determine whether 
the expenses were necessary.
    So I want to just start by thanking the Chairman and thank 
the Ranking Member for holding this important hearing to 
address a fundamental need that we have within the VA for 
comprehensive medical records for the veterans. Every day, I 
hear from veterans in Eastern Washington who are in desperate 
need for help, and yet so often they feel like when they 
contact the VA that they are more of a burden than actually 
having the red carpet rolled out to them.
    And sometimes I hear this especially as it relates to 
obtaining as simple as your mere medical record. I have even 
heard from providers in the community that I represent who have 
been frustrated to the point of tears because they are unable 
to treat veterans because the patient cannot obtain their own 
medical records. Some veterans have waited more than 2 years to 
simply get their medical records from the VA.
    So this legislation that is before you and I ask for your 
consideration is simply provides a commonsense, off-the-shelf, 
bipartisan solution to the problem. It is a pilot project and 
it directs the Secretary of VA to establish a secure, patient-
centered, portable medical records system that would allow 
veterans to have access to their own comprehensive medical 
records.
    As with most things in the VA, this is not an issue where 
the wheel must be reinvented, this technology already exists in 
the private sector. For example, VYRTY. Now, they are a company 
based out of Washington State, but they have developed a 
secure, offline data repository with end-to-end encryption and 
remote record completion.
    We have discussed the security concerns that some may have 
in conversations with the VA Office of Information and 
Technology, and this Committee, and while these concerns would 
be valid in other scenarios, the technology that exists and 
that is in use today is secure and is HIPAA-compliant. It is 
compatible across all electronic health care systems, including 
Cerner, and is encrypted end-to-end.
    The fact is, it is in use today and it does not make 
doctors resistant to accepting plug-in electronic devices from 
patients.
    With the technology that is currently deployed, patients 
have a current copy, the most up-to-date version of their 
medical records. It is as simple as putting it on a chip that 
is then portable. Specifically, one of the most important 
aspects of VYRTY's technology is that they perform record 
completion. When a patient leaves his or her provider, they are 
leaving with the most up-to-date medical record information; it 
is updated immediately.
    While the VA Department gives veterans access to the Blue 
Button Initiative through My Healthy Vet, this puts the burden 
on the veteran to be responsible for downloading, printing, and 
bringing their most up-to-date record to their doctor. With 
VYRTY's technology, the veteran and the provider all have the 
information on a chip for easy access.
    There have also been concerns raised about the Application 
Performing Interfaces regulations put forth by Health and Human 
Services. First of all, the VA is not regulated by HHS and 
VYRTY's technology is already in use today; therefore, it is 
already up to date and in line with current regulations. It has 
the capability to be integrated directly and is already 
supporting direct data feeds in their deployments.
    I am disappointed that the VA has chosen to oppose this 
legislation, that they have chosen to focus on the challenges 
rather than the opportunity here to offer our veterans high-
quality care. Will there be challenges? Yes. But you know what? 
That shouldn't stop us. It hasn't stopped Americans in the past 
and it shouldn't stop us today.
    My staff and I have held several meetings with the VA's 
Office of Information and Technology where legislation was 
discussed, where VYRTY was brought in to demonstrate their 
technology, and where draft legislation was sent to the VA 
before introduction for comments and concerns. Additionally, we 
have in writing that the Office of Information and Technology 
was supportive of this legislation. In the VA's words, ``This 
looks good to us.''
    What this bill is proposing is a simple, commonsense, off-
the-shelf, readily available solution to a persistent problem. 
And while I am pleased that the Secretary is serious about 
modernization of the EHR system, their approach, not only is 
the VA Cerner contract currently paused, the implementation 
period is 10 years.
    Since I came to Congress in 2005, the budget for VA has 
doubled twice, has nearly tripled. It went from 40 to 80 
billion, and now 80 billion to 160 billion. The VA has one 
mission, to serve our veterans, and I fear too often that the 
veteran is getting lost in all of this and we make it too 
difficult for them.
    So, I thank you for your consideration of this legislation 
and I just ask that the remainder of my statement be read into 
the record.
    Thank you.
    Mr. Bergman. Without objection, so ordered.
    Thank you, Mrs. McMorris Rodgers.
    Next, we are going to hear from Mr. Celli. You are now 
recognized for 5 minutes.

                 STATEMENT OF LOUIS CELLI, JR.

    Mr. Celli. The American Legion is proud to offer our 
position on the four bills being considered today and I will 
briefly touch on them before I move toward a discussion on the 
future of the electronic health care records project that ties 
all of these bills together.
    Chairman Bergman, Ranking Member Kuster, and distinguished, 
dedicated defenders of veterans who proudly serve on this 
Committee, and on behalf of Denise Rohan, the National 
Commander of the largest Veterans Service Organization in the 
United States of America, representing more than two million 
dues-paying members, and combined with our American Legion 
family, whose numbers exceed three and a half million voters 
living in every state and territory in America, it is my duty 
and honor to present the The American Legion's position on the 
bills being discussed here today.
    The American Legion is unable to support the purchase card 
draft legislation that congressionally directs VA employee 
behavior and discipline. We expect the Department to enforce 
and follow the statute and policies that are currently in place 
when employees misuse their authority and knowingly put 
taxpayer dollars at risk. We fully expect the VA to make 
management decisions and use their staff in a manner that is in 
keeping with prudent and judicious behavior. And when that 
behavior breaks down, we look to the VA to use the authority 
that this Congress has already given the Secretary to hold 
employees and managers accountable.
    We do support the other draft legislation being discussed 
today that would direct VA to compete prime vendor contracts, 
because we believe that it will assist VA with ensuring that 
more prime vendor contracts go to veteran-owned firms. The 
Department of Veterans Affairs serves veterans and veterans 
should be given first right of refusal serving their community, 
provided that the services are on the same or greater quality 
and that the price is competitive. This theme guides all of The 
American Legion's policy recommendations regarding VA 
contracting programs.
    I will dedicate the remainder of my time to discussing the 
VA Electronic Health Care Record Program and the bills that 
address modernizing VA's primary IT infrastructure program.
    The American Legion is unable to support H.R. 3497, the 
Modernization of Medical Records Access for Veterans Act of 
2017, not because we believe that the goal is off-base, but 
because we believe that this and so much more is already 
incorporated into the pending EHR contract that the Department 
is getting ready to memorialize with the Cerner Corporation. As 
such, The American Legion supports H.R. 5254, but only insofar 
as it applies to the Cerner agreement and deployment of that 
EHR program.
    The contract that the VA has negotiated with Cerner 
Corporation will fundamentally change the course of American 
medical history by providing Government standards for 
electronic health record communication and transferability, 
health maintenance, patient access, supply chain management, 
consults, follow-ups, and much, much more.
    The Department of Veterans Affairs and the Department of 
Defense are setting the stage for governmental interoperability 
that is poised to eventually become the national standard. 
Almost everything VA does from this point forward will affect 
and be affected by this platform, and replacing VISTA and AHLTA 
are just the beginning.
    From here on out, this Committee, as well as the Senate 
Committee on Veterans Affairs and the House and Senate Armed 
Services Committee, are going to have to work together to 
ensure that uniformed American servicemembers and their 
families are not only provided with a safe and effective 
transition from DoD to post-service medical care, but that 
their access to care at VA and in the community are all well-
coordinated.
    This is the direction that the Committee has directed VA to 
take. It is long overdue, and this is the direction that the 
American Legion champions, and this is the project that 
Secretary Shulkin has led, and is leading to completion.
    We, the veteran community and this Committee, are at a 
critical juncture in time. We have a secretary who is under 
fire by ideologues who oppose progress, and a Congress, and a 
community that supports and appreciates the work that he has 
done on behalf of more than 20 million veterans. Now is not the 
time to be silent, and I just hope that all--and now is not the 
time to be silent and just hope it all works out okay.
    Now is the time to step up, now is the time to be heard, 
and now is the time to join the Secretary and be part of this 
historic change at the Department of Veterans Affairs and set 
the stage for the largest modernization of medical coordination 
in American history. Thank you, and I look forward to answering 
any questions that you may have.

    [The prepared statement of Louis Celli, Jr. appears in the 
Appendix]

    Mr. Bergman. Thank you, Mr. Celli.
    Mr. Denniston, you are now recognized for five minutes.

                  STATEMENT OF SCOTT DENNISTON

    Mr. Denniston. Good afternoon, Chairman Bergman, Ranking 
Member Kuster, and distinguished Members of this Subcommittee. 
On behalf of the members of the National Veterans Small 
Business Coalition, I sincerely appreciate the opportunity to 
discuss the proposed pieces of legislation.
    The National Veterans Small Business Coalition is the 
largest non-profit trade association representing veterans and 
service-disabled vets in the Federal marketplace as prime and 
subcontractors. And I request that my remarks and the 
attachments be made part of the record.
    I would like to first address H.R. 3497 and H.R. 4245 
dealing with the veteran electronic health records. We believe 
H.R. 3497 to allow veterans to use a portable medical record 
storage system is good news for veterans as it allows easier 
access to their own personal health records. H.R. 4245 appears 
to address Congress' concerns about the Secretary's 
announcement of the award to Cerner Corporation for the new 
electronic health care record.
    Our concern with this contract is that the VA is taking a 
very minimalistic approach to providing subcontracting 
opportunities for small businesses, including veteran and 
service-disabled vet small businesses. VA is only requiring the 
awardee to meet a minimum goal of 17 percent of subcontracting 
to small business, 5 percent to service-disabled vets, and 7 
percent to veterans.
    And we know historically that information technology 
contracts generally provide greater opportunity for 
subcontracting to small business. As an example, the 2018 goals 
that the SBA has established with the Department of Defense for 
subcontracting is 33 percent; Department of Energy, 42 percent; 
Department of Homeland Security, 40 percent. So we think the VA 
can do a lot more than what they are proposing.
    Also, over the past ten years, the VA has never once 
achieved its subcontracting goals and negotiated with the Small 
Business Administration. Given VA's poor track record and the 
lower goals accepted for this contract, we implore this 
Committee to include in H.R. 4245 a provision requiring the 
Secretary of Veterans Affairs to report to Congress on a 
quarterly basis the accomplishments against the small business 
subcontracting goal to include subcontract awards to veteran 
and service-disabled vet businesses.
    Next, I would like to address the draft bill regarding 
employees found to knowingly misuse VA purchase cards. We are 
in support of the draft. Abuses of purchase card has been 
widespread, and we think this trend will only continue given 
the fact that micro-purchase level is being raised from $3,500 
to $10,000. But we have also found that many times these issues 
arise due to poorly written policies and training on the part 
of the VA acquisition leadership, not because of VA employees 
are dishonest people. So we think that that needs to be 
addressed as well.
    The last draft bill you asked me to discuss directs the VA 
Secretary to carry out Medical Surgical Prime Vendor Program 
using multiple prime vendors. Before addressing the specifics 
of the draft, I want to share with you our observations having 
lived the current prime vendor program for the past two years 
in numerous meetings with both Veterans Health Administration 
and Strategic Acquisition Center leadership.
    The current program is being driven for contracting 
expediency not based on clinical input to improve veteran 
patient care. There is little to no clinical input, in our 
opinion. VHA and the SAC appear to work on conflicting 
timeframes, there is no strategic plan, determining who is in 
charge is almost impossible, and rules of engagement appear to 
change on a weekly basis.
    In the Fall of 2017 when we learned that the SAC intended 
under MSPV 2.0 to award one contract for one prime vendor, we 
asked what was the position that service-disabled vets were 
going to play, and were told you are going to be 
subcontractors.
    Again, given the VA's responsibility--or accomplishments in 
the last ten years when we asked, well, what is going to 
change, and the VA response to us was, you just have to trust 
us. Well, we do not trust VA. We do not trust VA to do what is 
right for service-disabled vets when it comes time for 
subcontracting. We also think that this is the way VA wants to 
get around having to deal with the SBA non-manufacturer waiver, 
which I know that this Committee is aware of.
    So we have a number of issues with that. Back in October, 
this Committee had a roundtable and invited a number of groups 
to participate. And we provided the Committee eight specific 
recommendations in a letter, and we think that those are still 
very appropriate.
    But one of the things that I do want to mention in the last 
30 seconds that I have, is that to show that service-disabled 
vets can be part of the solution as opposed to the problem--the 
way that we know that VA looks at service-disabled vets now--
we, the National Veterans Small Business Coalition in 
conjunction with one of our members, Veratics of Florida, is in 
the process of developing, for the VA's use, an online ordering 
platform, very similar to Amazon, for medical products all from 
verified CVE small businesses so that we are going to be able 
to give the VA a platform that will allow them to buy medical 
products under the micro-purchase threshold from service-
disabled vets at prices much less than they are buying from the 
prime vendors in the current process. Thank you.

    [The prepared statement of Scott Denniston appears in the 
Appendix]

    Mr. Bergman. Thank you, Mr. Denniston.
    The written statements of those who have just provided oral 
testimony will be entered into the hearing record. We will now 
proceed to questioning.
    Ranking Member Kuster, you are recognized for five minutes.
    Ms. Kuster. Thank you very much, Chairman Bergman, and I 
appreciate all the testimony. I am going to start, you were 
talking--the VA was talking about the Blue Button Initiative 
for pre-existing program where veterans are able to access, 
download, and print their own medical records. How does the VA 
balance the benefit of access to the medical records through 
the Blue Button Initiative against the costs of lessened 
security that can result?
    Mr. Mingo. Thank you for the question. I will make a 
comment first because I am a veteran, I downloaded the blue 
button, my record, and that is how I was really only able to 
solve my access to my record when I was treated out in town in 
a Choice related program.
    Specifically for that contract, though, and that question, 
I would like to turn it over to my colleague,
    Ms. Katrina Tuisamatatle, who will talk on that area.
    Ms. Tuisamatatele. Can you please repeat the last part of 
your question regarding security? I did not quite catch that.
    Ms. Kuster. Well, my question is just how do you balance 
the security concerns with the simplicity and the access?
    Ms. Tuisamatatele. So we meet all of the--we have to go 
through a rigorous process to meet the security requirements. 
Not only HIPPA but PII, PHI, and we make sure that those are--
we have security teams that actually come out before we give an 
authority to operate. So for every single product we have, we 
go through that process. It is you do not get an authority to 
operate unless you have gone through and made sure that those 
security measures are met.
    Ms. Kuster. Great. Thank you very much.
    Ms. Tuisamatatele. Thank you.
    Ms. Kuster. This is, again, for the VA on H.R. 4245, again 
about the veterans electronic health care record modernization. 
Why do you believe that the deadlines and verbiage in H.R. 4245 
should be altered? And, should we incorporate your proposed 
deadlines, how confident are you that the VA will fully comply 
with the legislation?
    Mr. Mingo. Thank you. We were establishing the program 
office now for oversight of the actual contract. We have 
negotiated with Cerner for our contract, we have spent a lot of 
time in that area. We know these are typical documents that we 
will put in place to manage a large project. They actually take 
a lot of time and they take coordination with the Cerner 
Corporation as well with some of what we are doing in those 
oversight documents.
    This is a large-scoped project. When the Secretary signed 
the determination and finding, and announced it back in June, 
at that phase where we would start negotiating with a vendor, a 
lot of these documents would have already been prepared, and 
they would have taken time.
    When that document--when that was announced, there were 
four of us in VHA and two in OIT that knew that news was 
coming. There is a lot of people that we need to put in place, 
and structure, and on organization to put in place to implement 
and oversee this program. It just takes us time to pull those 
together.
    Ms. Kuster. So if we were to incorporate your deadlines, 
your proposed deadlines, how confident are you that the VA will 
fully comply?
    Mr. Mingo. I am very confident that we would be able to 
meet those. And some we will have ahead of time, others we 
would have that are going to just take longer. There is a lot 
of documents (indiscernible).
    Ms. Kuster. And back to the American Legion. On this same 
bill, your testimony conveys general opposition to legislation 
that might impact VA's current efforts to adopt the Cerner 
electronic health record. Do you have any concerns specific to 
this bill that we should be keeping in mind if it advances to 
markup?
    Mr. Celli. So the first thing is we, you know, we 
completely support the Cerner project. We have been out there 
to the facility, we have seen an example of how this software 
can be deployed, we have seen all the different variables of 
how it can be enhanced. And we just believe that anything that 
this Committee does going forward has to take that project in 
mind.
    And as far as timelines go, we absolutely support making 
sure that VA meet with this Committee on a regular basis to 
ensure that they are meeting benchmarks and timelines. And if 
something goes awry, Congress needs to be the first ones to 
know.
    But we also believe that you should be working very closely 
with VA as you are doing now to ensure that they can meet the 
timelines that you are asking them to meet. And if they cannot, 
they need to be able to provide a cogent reason as to why they 
cannot meet those timelines, and what the timelines should be. 
Just as you are doing today.
    Ms. Kuster. So my time is up. If anyone else wants to 
comment on that, we can take it for the record. Thank you. I 
yield back.
    Mr. Bergman. Thank you.
    Dr. Dunn, you are recognized for five minutes.
    Mr. Dunn. Thank you very much, General. And thank you very 
much for letting me be part of this hearing today, and I want 
to thank all the witnesses who are here testifying as well.
    I would emphasize my support for the purchase card draft 
bill and the Medical Surgical Prime Vendor draft bill. The 
purchase card misuse has been a chronic issue with the VA for 
years, and no one has been held accountable for this 
misfeasance.
    This draft codifies the prohibition of abusing purchases on 
the--at the expense of the tax payers. Similarly, the Medical 
Surgical Prime Vendor draft bill keeps the department on track 
by fixing the current model and ensuring that the current 
medical formularies are broadened to better serve the patients.
    So, Mr. Lemmon, I understand the VA is very close to hiring 
a permanent director to run the MSPV program. Do you have 
anything to announce today on that, such as when this person 
might begin work, and what their qualifications are?
    Mr. Lemmon. I do not. We have not hired the person as of 
today.
    Mr. Dunn. Can you share the qualifications for the kind of 
things you are looking for?
    Mr. Lemmon. Well, we are certainly looking for someone that 
has a background working with clinicians, and doing value 
analysis, and sourcing clinical products. And my understanding 
is there are some good applicants. I think we will be able to 
make a selection on that, but we have not hired the person.
    Mr. Dunn. Can you speculate on the timeline?
    Mr. Lemmon. I think it will be soon.
    Mr. Dunn. Soon. Okay. Thank you. Also, the industry has 
expressed frustration that the VA only selects a single 
supplier for each category of medical or surgical supply, and 
the regulations clearly allow you to select more than one, 
multiple vendors. Can you explain what the decision--on what 
basis the decision was made to select--choose a single supplier 
for each line?
    Mr. Lemmon. Well, I believe that goes kind of to the 
contracting rules, but there are ways to work within the system 
to select more than one supplier. We try to utilize ordering 
officers in the facilities so that they can very efficiently 
order products and services without re-competing the items on a 
task order level. But there are ways to address that and still 
award--make awards with multiple suppliers, and that is the 
direction we plan to use going forward.
    Mr. Dunn. In general, by having multiple suppliers, you get 
them to compete against each other on price. And I am concerned 
that you might not be getting that value added if you just have 
a single supplier. Is that fair?
    Mr. Lemmon. Well, I think you want to get the most 
competitive and the best--drive the best bargain you can when 
you award the contracts with your suppliers. And then have a 
system where ordering officers can order very efficiently as 
the hospitals need the items without running a second round of 
competition between multiple award--
    Mr. Dunn. All right. Pardon me. Sure the competition was in 
there. Also, we spoke here several months ago, I think it was 
in December, about items that get into the supply chain that 
are in the grey zone. All right. So they are not necessarily 
OEM, and they may not even be authorized OEM parts, and 
whatnot. We thought we talked about a letter authorization 
being provided by the distributors from the OEM. Have we taken 
any actions on that?
    Mr. Lemmon. We have. We do have policy on that, and we are 
strengthening it, and providing guidance to our contracting 
officers to require distributors that are not manufacturers to 
prove that they are an authorized distributor of the 
manufacturer to eliminate the possibility of grey market.
    Mr. Dunn. Can you state for a fact that grey market items 
are actually getting into the supply chain, or is it just 
something that we suspect?
    Mr. Lemmon. I think there have been a very small number of 
instances where it has happened, but not on any scale.
    Mr. Dunn. Do you have any examples?
    Mr. Lemmon. I do not have any prepared, but we probably 
could come back with a small number.
    Mr. Dunn. Let me tell you why I ask that, because, you 
know, in the world of robotic surgery, there are some after-
market suppliers that clearly fit into the grey zone, and that 
can be a lot of money, those parts. Thank you very much. Mr. 
Chairman, I yield back.
    Mr. Bergman. Thank you.
    Ms. Rice, you are recognized for five minutes.
    Ms. Rice. Thank you, Mr. Chairman. Mr. Celli, if you could 
just expound a little more on your objections to the purchase 
card bill.
    Mr. Celli. Thank you for asking me that question. So we are 
never a fan of layering statute on top of statute to control 
behavior when the VA already has the authority to hold bad 
actors accountable. Honestly, I find it a bit offensive that 
the VA is asking for this legislation when they can do the same 
thing through policy today.
    There is no reason at all that the Secretary cannot say, if 
you have acted in bad conduct with a purchase card, you are 
hereby suspended from having a purchase card. Why do they need 
Congress to tell them that?
    So we believe that Congress has been very generous with 
their oversight, and the legislation that they have provided to 
VA to hold bad actors accountable, and to remove bad actors 
from the program. I just find it difficult to understand why 
they need additional legislative authority to do something they 
can already do.
    Ms. Rice. Well, clearly they have not done it, and there 
is--look, my personal feeling is, you give, you know, 10,000 
credit cards out, you get what you get. It is like, you know, I 
think it is just rife for abuse when you give purchasing 
authority to that many people.
    Mr. Celli. Well, then we are speaking to--
    Ms. Rice. Not just the VA, it is in other places. But, I 
mean, I would assume that there are maybe, you know, labor 
issues and stuff like that they may constrain the hands of the 
Secretary of the VA. I do not know. I mean, maybe some people 
from the VA can talk about what difficulty there is in terms of 
holding people accountable who are not just one time abusers of 
the purchasing authority, but multiple time abusers.
    Mr. Mingo. I would like my colleague Mr. John Bergman to 
talk--John Adams to talk to that, please.
    Mr. Adams. Thank you for the opportunity to address this. I 
do not know that I can really speak on any labor issues because 
that is outside of my purview. But we do have somewhere in the 
neighborhood of 21,500 cards that are being used in the 
Department. The annual spend, since 2015, I think you mentioned 
it was $4 billion, it is up to $4.2 billion now. That is 
somewhere in the neighborhood of 6.6 million transactions 
annually that we do with purchase cards. I think the record 
speaks for itself as far as the misuse that you have seen.
    You know, I come from a DoD financial management 
background, I have 30 years in the Marine Corps, 12 of which 
was overseas. I understand the complexities of making payments 
in a dynamic environment, especially like in a combat zone.
    Still, we were able to find there within that environment 
ways to do it properly and legally without misusing the tools 
that were provided to us. So I think it is kind of--I am a bit 
confused as to how we would not support a bill, coming from the 
VA perspective, to prevent misuse of the purchase cards.
    Ms. Rice. So have you made those suggestions about how you 
did it and how that was more effective than the way it is being 
done now, or?
    Mr. Adams. So I am just coming into this role, I assumed it 
in January, so we are doing a comprehensive review of the 
policies around the purchase card, and looking at all the 
metrics that we currently have regarding the purchase card use.
    We are trying to do some analytics around things like spend 
patterns, and anomalies in spend patterns, and those type of 
things, and doing perhaps some forensic accounting on the data 
to find ways to try to help the VA manage its purchase cards, 
the transactions that are being done with it.
    Ms. Rice. Well, when that analysis is done, which I think 
is a great idea because you obviously have experience in this 
area, I would love for you to share that with this Committee.
    Mr. Adams. Certainly. Yes, ma'am.
    Ms. Rice. Thank you. I yield back.
    Mr. Bergman. Mr. Peters, you are recognized for five 
minutes.
    Mr. Peters. Thank you. I just have a couple questions for 
Mr. Lemmon, I think. One aspect of the bill we have been 
discussing on the MSPV issue, it is not yet in the draft bill, 
is to require VA employees who conduct formulary analysis or 
decide which items are going to be included in the formulary 
have medical expertise that is relevant to those particular 
items. The concern we hear constantly from the stakeholders is 
that the wrong people are making medical decisions.
    So I just wanted to ask, do you have feelings about the 
bill language? Have you seen the language? Do you agree? Do you 
have any objections? Any way you could inform us on that?
    Mr. Lemmon. Well, although I support many of the underlying 
short term objectives in the bill, I oppose legislating it. Now 
the part regarding involving clinicians in choosing products, I 
absolutely agree with. And we are working to implement a 
clinically driven sourcing model with robust structure to 
assure that product selection is based on clinical decisions.
    And so we completely agree with the concept that it should 
not be contracting people determining what products our doctors 
should use, it should be the doctors. And we are working very 
diligently to implement a structure to do that.
    Mr. Peters. So your concern is sort of the maybe the 
quantitative goals, 20,000 to 33,000 items a year, 30,000 to 
50,000 items a year? Okay.
    Mr. Lemmon. Yeah. I mean, right now commercial prime 
vendors they may actually stock 30,000 items in a warehouse. 
So, you know, to say that we have to contract for 50,000. And, 
honestly, if you look a few years down the road, if we are 
successful involving our clinicians like you would like us to, 
and we would like to, we really think that is going to help 
reduce the overall formulary from 50,000 potentially to a much 
smaller number. So I would hate to legislate the actual number 
of items we should have on contract, that should be driven by 
clinical need.
    Mr. Peters. Okay. Well, that is helpful, thank you. Mr. 
Chairman, those are my questions, I yield back.
    Mr. Bergman. Thank you. I will now yield myself five 
minutes for questions.
    Mr. Mingo, I appreciate you coming to testify about our 
legislation today. I understand many of your colleagues in the 
electronic health record modernization program are at the HIMSS 
conference this week. What an acronym. Secretary Shulkin is 
delivering the keynote address on Friday. VA has issued a 
variety of press statements indicating it intends to award the 
primary contract this month. Do you have any sort of 
announcement to make, or guidance on when we should expect an 
announcement?
    Mr. Mingo. Chairman, thank you very much for that question. 
I am as anxious as I think anybody in this room to hear the 
actual award date. I do not have any specific--
    Mr. Bergman. Are there any steps--
    Mr. Mingo [continued]. --anything else specific.
    Mr. Bergman [continued]. --that still need to be, any I's 
needed to be dotted, T's needed to be crossed before the 
contract is awarded?
    Mr. Mingo. There are two additional--sir, I like actually 
to take that one for the record, if I could, and get back to 
you.
    Mr. Bergman. Okay. Also, regarding H.R. 3497. Mr. Mingo, 
you testified that it would be duplicative of the electronic 
health record modernization program and divert resources away 
from it. You note that veterans can already download a copy of 
their medical records through what VA calls the Blue Button 
Initiative. Does that include every aspect of a veteran's 
medical record or just certain documents?
    Mr. Mingo. Actually, Chairman, what I would like to do is I 
would like to take that question for the record and I would 
like to tie it back to Director Verma's comments that she did 
make it at the HIMSS conference on Tuesday, where she announced 
the Blue Button 2.0 Initiative. And there is a--I think there 
is a very good opportunity for the two agencies to work 
together in bringing that type of--all the data available for 
the veterans to gain access, and the clinicians to have access 
to that record when it is needed, together. So we would like to 
come back and give you a better answer on that.
    Mr. Bergman. Okay. And, Mr.--do you say Lemmon, or Lemmon?
    Mr. Lemmon. Yes, Lemmon.
    Mr. Bergman. Lemmon, that is what I thought. Okay. Mr. 
Lemmon, and you have testified before us before. The National 
Defense Authorization Act, which was enacted on December the 
12th of this past year, increased the micro-purchase threshold, 
which is also the transaction limit for purchase cards, from 
$3,500 to $10,000. When will this change actually go into 
effect?
    Mr. Lemmon. I cannot give you a date. I will say that 
agencies have the option to issue a deviation to the far until 
the regulation changes. My understanding is that the VA Office 
of Acquisition Policy is in the process of issuing that 
deviation, and with the Office of Management then 
implementation will be determined. But I do not know that 
they--
    Mr. Bergman. Can you give me kind of like a year?
    Mr. Lemmon. I believe with certainty it would be this year, 
but--
    Mr. Bergman. Okay. Well, when the transaction limit goes up 
and we finally get it, you know, in place, you are going to be 
able to buy a lot more things with the increased dollar amount. 
Can you give me an idea, has there been any discussion of what 
types of products that you plan to move over onto purchase 
cards?
    Mr. Lemmon. Well, I think we have to take care. There are 
areas where it would be helpful now in terms of some prosthetic 
procurements as well as to help with our med-surg supplies 
while we are working on a more robust catalog. But where we do 
not want to go, we do not want to go from $4 billion of open 
market spend to $6 to $8, we want to put more national 
contracts in place and drive prices lower. So the goal really 
is not to explode the purchase card program.
    Mr. Bergman. Okay. Well, thank you.
    Mr. Mingo. I would like to jump in on that question. Sorry, 
Mr. Chairman, I would like to jump in on that as well because--
    Mr. Bergman. Are you going to use up the rest of my time 
here because I got one more question for Mr. Adams?
    Mr. Mingo. Well.
    Mr. Bergman. You can--I mean, go ahead.
    Mr. Mingo. Oh. Okay. I was going to say--
    Mr. Bergman. Unless my colleagues disagree. Can I have a 
little extra time here to finish my one last question?
    Ms. Kuster. We would grant you the courtesy.
    Mr. Bergman. Great. Thank you so much. Okay. Be brief.
    Mr. Mingo. At the HIMSS Conference, our CIO did announce 
the use of the micro-purchase, the opportunity for really 
bringing innovation, which is what we would bring with the new 
Lighthouse Initiative that you referenced earlier. And that 
type of threshold would enable those type of purchases as well 
to bring in innovation meeting the veterans' needs, and pulling 
those opportunities together.
    Mr. Bergman. Okay. Thank you. Mr. Adams, VA's policy 
handbook for the purchase card program sets out penalties for 
misuse. The first offense ranges from admonishment to removal. 
The second offense ranges from a seven day suspension to 
removal. The third offense ranges from a 14 day suspension to 
removal.
    Those are very wide ranges. I would argue an admonishment 
is not even a real penalty, it is kind of like being grounded 
without having your allowance taken away. Can you give me some 
examples of employees being removed for purchase card misuse?
    Mr. Adams. Unfortunately, Mr. Chairman, I do not have any 
the detailed data on any employees that may have been removed 
as a result of that.
    Mr. Bergman. Do you think there is something that exist in 
the VA records that you could, regardless, not necessarily 
names, but numbers, or--
    Mr. Adams. I believe we could take that for the record.
    Mr. Bergman. I would appreciate that very much. With that, 
thank you to my colleagues for allowing me to extend my 
questions.
    Any appetite for a second round, or is everybody okay? All 
right.
    Thank you to the witnesses for your thoughtful input. The 
panel is now excused.
    The testimony provided today is an important contribution 
as we move forward with the legislation, particularly the two 
draft bills. The witnesses' expertise is valuable to help us 
refine and improve the bill texts.
    As you are well aware, this Subcommittee's Oversight and 
Investigations of VA are frequently uncomfortable. So I 
appreciate VA's willingness to consider the ultimate objectives 
of today's legislation; improve efficiency, reduce waste, and 
provide better outcomes for veterans. There was a time when the 
Department's default posture was to evade congressional 
scrutiny. I am happy to see the indications of that are 
beginning to change.
    And I wrote a couple extra notes here, Mr. Celli, because 
you kind of asked the why we doing this. The reason the 
Committee is put into a position of proposing this legislation 
is because of VA's track record of accountability has been 
unaccepted by too many standards, especially those of who have 
worn the cloth of our Nation.
    We know what we sign up to when we swear an oath, and the 
performance. And so we--well, again, it is we could probably 
spend time on other things, but we have a performance and 
accountability problem from the Committee as a whole's view, 
and especially Oversight and Investigation. But we are hopeful 
that with new attitudes, new leadership, and a sense of urgency 
that I can see beginning to take shape now within the VA gives 
me cause for hope that the message is getting through as we, 
the Committee, enable VA to take care of substandard, in some 
cases, illegal performance. And that is the why.
    So having said that, I appreciate the bipartisan 
cooperation of all the sponsors and cosponsors of today's 
legislation. 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 of our witnesses and 
audience members for joining us here this afternoon. This 
hearing is now adjourned.

    [Whereupon, at 3:11 p.m., the Subcommittee was adjourned.]



 
                            A P P E N D I X

                              ----------                              

                    Prepared Statement of Fred Mingo
    Good morning, Chairman Bergman, Ranking Member Kuster and Members 
of the Committee. I am pleased to be here today to provide the views of 
the Department of Veterans Affairs (VA) on pending legislation. With me 
today are Mr. Ricky Lemmon, Acting Deputy Chief Procurement Officer, 
Veterans Health Administration, Katrina Tuisamatatele, Health Portfolio 
Director, Office Information and Technology, and Mr. John Adams, 
Director of Corporate Travel and Charge Card Service, Office of 
Management.
                               H.R. 3497
    H.R. 3497, the Modernization of Medical Records Access for Veterans 
Act of 2017 would direct the Secretary of Veterans Affairs to carry out 
a pilot program establishing a secure, patient-centered portable 
medical records storage system that would allow Veterans enrolled in 
the VA health care system to store and share records of their 
individual medical history with VA and community health care providers.
    Although VA does not support H.R. 3497 as currently drafted, the 
Department is fully committed to ensuring a Veteran's access to their 
medical record information as required by the Health Insurance 
Portability and Accountability Act of 1996 and other existing 
legislation, and looks forward to further collaboration on the subject. 
VA understands the intent of the legislation is to provide Veterans 
with a copy of their most up-to-date medical record; however, the use 
of a portable device is not the appropriate solution for several 
reasons. First, challenges related to network security and 
compatibility with electronic health records systems make doctors 
resistant to accepting plug-in electronic devices from a patient. 
Second, even with a portable storage device, Veterans may not always 
have the most current copy of their record as this depends on when the 
files are downloaded during the Veteran's visit. It may not reflect the 
current visit including notes and the results of diagnostic tests that 
were ordered during the visit. Lastly, the Department of Health and 
Human Services will be promulgating regulations to require health IT 
developers to have application programming interfaces (APIs) that 
enable easy access, use, and exchange of health information, and this 
technology would obviate the need for, or even the help from, the kind 
of special purpose storage system that the bill would foster.
    Currently, Veterans are already able to download a copy of their 
medical records through the Blue Button initiative. They could even 
download them on a community health care provider's computers which 
would be a lower risk to that provider and to the Veteran. Also, 
implementation of the contemplated portable medical record storage 
system would take resources away from VA to support the Electronic 
Health Record Modernization (EHRM) Program Executive Office (PEO) and 
duplicate functionality that could ultimately be provided by the new 
EHR.
    VA is happy to work with the Committee to identify opportunities 
within EHRM PEO Innovations and industry to provide Veterans with an 
aggregated Personal Health Record (PHR) from multiple EHR systems in 
the future.
                               H.R. 4245
    H.R. 4245, the Veterans' Electronic Health Record Modernization 
Oversight Act of 2017, would require VA to submit to designated 
committees of Congress several project management documents 30 days 
after enactment, as well as quarterly updates related to the Electronic 
Health Record Modernization (EHRM) Program. VA would also be required 
to submit to the designated committees any contract, order, agreement, 
or modification thereto under the EHRM program within 5 days after 
award or modification. Lastly, VA would be required to notify 
congressional committees following significant events including: 
milestone or deliverable delays of 30 days or more; equitable 
adjustments or change orders exceeding $1 million; any protest, loss of 
clinical or other data, and breach of patient privacy.
    VA supports this legislation and believes transparency is important 
for the success of the EHRM Program. VA recommends making the following 
changes in Sec. 2(a) and Sec. 2(b). VA suggests changing the 
requirement in Sec. 2(a) to provide for submission of program-
management documents to the committees no later than 180 days after 
enactment of the legislation, a more practicable deadline. For Sec. 
2(b), VA suggests changing the requirement to provide quarterly updates 
no later than 60 days after the end of the fiscal quarter. This would 
allow VA to provide the Committee with more accurate and complete 
information.
    VA would also like to work with the Committee to ensure that the 
terminology is consistent with similar terms in the HIPAA Privacy Rule. 
For example, it appears that the term ``breach'' in this bill is 
broader than the similar term ``breach of unsecured protected health 
information'' in the HIPAA Privacy Rule. VA believes greater 
consistency among industry standards would reduce confusion, and 
improve VA's interoperability with community providers.
    Costs for H.R. 4245 would be minimal as the referenced documents 
will be drafted as part of the EHRM Program.
          H.R. ------ - Draft Bill Misuse of VA Purchase Cards
    This draft bill would direct the Secretary of Veterans Affairs to 
prohibit employees found to have knowingly misused a VA purchase card 
from further serving as a purchase cardholder or approving official. 
Such prohibition would be in addition to any other applicable penalty. 
Under the draft legislation, misuse would mean splitting purchases, 
exceeding the applicable card limits or purchase thresholds, purchasing 
any unauthorized item, using a purchase card without being an authorize 
account holder, and violating ethics standards.
    VA supports the draft bill, as it would be consistent with VA 
efforts to reduce potential fraud, waste, and abuse within the VA 
charge card program. It would facilitate reduction of charge-card 
misuse and minimize costly ratifications that are required to be 
completed when unauthorized commitments are identified. The sanctions 
identified in the bill would support sound charge card program 
oversight and encourage cardholders and approving officials to strictly 
adhere to purchasing requirements, as outlined in VA Financial Policy, 
Volume XVI, Chapter 1, Government Purchase Card.
    VA estimates the cost of enacting the legislation would be minimal.
     H.R. ------ - Draft Medical Surgical Prime Vendor Program Bill
    This bill would statutorily define the structure of VA's Medical/
Surgical Prime Vendor (MSPV) program and the number of items provided 
in its formulary within 1 and 2 years after enactment.
    VA opposes this bill. Congress has already provided, and the 
Federal Acquisition Regulation has already implemented, suitable tools 
to enable VA to make good business judgments in developing the MSPV 
program as well as other acquisitions. Agencies are required to conduct 
market research as part of their acquisition planning efforts; and at 
VA, we have a further need to conduct market research to fulfill our 
mandate under the Veterans First Contracting Program. Properly 
conducted market research enables VA to assess the current state of the 
marketplace and structure the acquisition appropriately based on the 
number and types of vendors available, the geographic areas they serve, 
the need to ensure redundancy to avoid interruption in supply, and/or 
other factors.
    In addition, Congress has provided tools for evaluating options for 
changing the number of vendors in subsequent acquisitions. Statutes on 
contract bundling and consolidation provide criteria for evaluating 
potential cost savings or other acquisition benefits to determine if 
such actions are necessary and justified. They also provide for 
elevated review of such decisions by the VA Senior Procurement 
Executive, VA Chief Acquisition Officer, VA Deputy Secretary, and the 
Administrator of the Small Business Administration.
    The current MSPV structure was based on a judgment call to apply 
the criteria Congress enacted to guide agencies in making these 
decisions. Legislation eliminating VA's ability to make such calls 
could have unintended consequences in preventing VA from adapting to 
changing market circumstances.
    Legislating the number of formulary items to be contracted within 
arbitrary time periods could also have unintended consequences. 
Determining the types of items needed and the number of suppliers for 
each type of item are also judgment calls. In making these judgment 
calls, VA considers factors such as opportunities for standardization 
and clinical needs. These judgment calls are additionally informed by 
market research as part of the acquisition process. However, adequate 
market research is necessary to make an informed business decision, and 
therefore establishing arbitrary timeframes increases the risk of poor 
business decisions.
    Providing broadly applicable criteria to make such judgments, which 
balance competing interests in public policy as Congress has defined 
them, is a much more constructive approach than the draft legislation 
proposes. VA should continue to have the flexibility to make such 
determinations based on market conditions and prevailing business 
practices, clinical need, and the like. As markets continue to change 
and develop, VA needs the ability to change and develop its procurement 
process accordingly.
    This includes our testimony. We appreciate the opportunity to 
present our views on these bills, and look forward to answering any 
questions the Committee may have.

                                 
                Prepared Statement of Louis J. Celli Jr.
    Chairman Bergman, Ranking Member Kuster, and distinguished members 
of the Subcommittee. On behalf of Denise H. Rohan, National Commander 
of The American Legion; the country's largest patriotic wartime service 
organization for veterans and our 2 million members; we thank you for 
inviting The American Legion to present our position on the pending and 
draft legislation before you today.
H.R. 3497 - Modernization of Medical Records Access for Veterans Act of 
                                  2017

    To direct the Secretary of Veterans Affairs to carry out a pilot 
program establishing a secure, patient-centered, portable medical 
records system, that would allow veterans to have access to their 
Personal Health Information, and for other purposes.

    The American Legion, through resolution, has long endorsed and 
supported the Department of Veterans Affairs (VA) in creating a 
Lifetime Electronic Health Records (EHR) system. Additionally, The 
American Legion has encouraged both the Department of Defense (DoD) and 
the VA to either use the same EHR system, or, at the very least, 
systems that were interoperable.
    In 2009, The American Legion was pleased when the Obama 
administration announced that the DoD and the VA would finally create a 
path to integrate the flow of patients' information between DoD's AHLTA 
(Armed Forces Health Longitudinal Technology Application) and VA's 
VistA (Veterans Information System and Technology Architecture) 
Electronic Health Record (EHR) platforms. \1\
---------------------------------------------------------------------------
    \1\ Obama administration announces DOD and VA pathway to an 
integrated health record - http://www.ehrscope.com/blog/white-house-
announces-plan-to-integrate-dod-and-va-ehrs/
---------------------------------------------------------------------------
    In 2015, DoD announced that Cerner was awarded a coveted $4.3 
billion, 10-year contract to overhaul the Pentagon's electronic health 
records for millions of active military members and retirees. However, 
around the same time, VA announced it would maintain and modernize 
VistA.
    The American Legion was disappointed in VA's and DoD decisions to 
go in different directions and voiced concerns about their decision. On 
June 6, 2017, VA Secretary David Shulkin announced that the VA would 
adopt the same Cerner EHR system as the DoD during a news briefing at 
VA's headquarters in Washington, D.C.
    The impending contract, that the Department of Veterans affairs is 
in the final stages of negotiating, will set the standard for record 
transferability and standardization in America. This new national 
standard will increases patient access, decrease wait times, and 
enhance good medicine for all Americans, not just veterans. Congress 
should refrain from advancing any recommendations or legislation that 
does not directly support implementation of the VA EHR modernization 
effort currently being negotiated.
    The American Legion understands and applauds the author of H.R. 
3497, as the desire to aide veterans all while placing their medical 
care into the 21st Century is clear. We look forward to engaging Rep. 
McMorris Rodgers in the future to assist our nation's heroes and their 
families.

The American Legion Opposes H.R. 3497.
H.R. 4245 - Veterans' Electronic Health Record Modernization Oversight 
                              Act of 2017

    To direct the Secretary of Veterans Affairs to submit to Congress 
certain documents relating to the Electronic Health Record 
Modernization Program of the Department of Veterans Affairs.

    In 2009, The American Legion was pleased when the Obama 
administration announced that the Departments of Defense (DoD) and 
Veterans Affairs (VA) would finally create a path to integrate the flow 
of patients' information between DOD's AHLTA (Armed Forces Health 
Longitudinal Technology Application) and VA's VistA (Veterans 
Information System and Technology Architecture) Electronic Health 
Record (EHR) platforms. \2\
---------------------------------------------------------------------------
    \2\ Obama administration announces DOD and VA pathway to an 
integrated health record - http://www.ehrscope.com/blog/white-house-
announces-plan-to-integrate-dod-and-va-ehrs/
---------------------------------------------------------------------------
    In 2015, DoD announced that Cerner was awarded a coveted $4.3 
billion, 10-year contract to overhaul the Pentagon's electronic health 
records for millions of active military members and retirees. However, 
around the same time, VA announced it would remain with VistA.
    The American Legion was disappointed in VA's and DoD decisions to 
go in different directions and voiced concerns about their decision. On 
June 6, 2017, VA Secretary David Shulkin announced that the VA intends 
to adopt the same Cerner EHR system as the DoD during a news briefing 
at VA's headquarters in Washington, D.C.
    ``I had said previously that I would be making a decision on our 
EHR by July 1, and I am honoring that commitment today,'' Shulkin said. 
``The health and safety of our veterans is one of our highest national 
priorities. Having a veteran's complete and accurate health record in a 
single common EHR system is critical to that care, and to improving 
patient safety.''
    Shulkin said VA's current VistA system is in need of major 
modernizations to keep pace with the improvements in health information 
technology (IT) and cybersecurity, as software development is not a 
core competency of VA. \3\
---------------------------------------------------------------------------
    \3\ VA announce the decision to go with Cerner -https://
www.legion.org/veteranshealthcare/237706/%E2%80%98it%E2%80%99s-time-
move-forward%E2%80%99
---------------------------------------------------------------------------
    The Veterans' Electronic Health Record Modernization Oversight Act 
of 2017 directs VA to provide Congress with its key planning and 
implementation documents for the EHR replacement project, to provide 
copies of the contracts, to keep Congress informed on progress and 
actual costs. The legislation also requires VA to notify Congress 
quickly in the event of any significant cost increase, schedule delay, 
loss of veteran health data or breach of privacy.
    The American Legion supports VA and the DoD establishing a joint 
Virtual Lifetime Electronic Health Record (VLER) and the congressional 
oversight and funding necessary to ensure this most important and 
massive IT transformation is completed as seamlessly as possible. \4\
---------------------------------------------------------------------------
    \4\ The American Legion Resolution No. 83: Virtual Lifetime 
Electronic Record
---------------------------------------------------------------------------
The American Legion supports H.R. 4245.
                               DRAFT BILL

    To amend title 38, United States Code, to direct the Secretary of 
Veterans Affairs to prohibit employees found to have knowingly misused 
Department of Veterans Affairs purchase cards from serving as purchase 
card holders or approving officials.

    This draft bill prohibits any employee of the Department of 
Veterans Affairs (VA) who the Secretary or the Inspector General of the 
Department determines has knowingly misused a purchase card from 
serving as a purchase cardholder or approving official.
    The American Legion leaves employee discipline, and policies to 
correct agency/employee behavior to the Department. VA's Purchase Card 
Program is part of the U.S. General Services Administration (GSA) 
SmartPay Program and conforms to the Federal Acquisition Regulations 
(FAR). \5\
---------------------------------------------------------------------------
    \5\ VA Purchase Card Policy https://www.va.gov/finance/docs/VA-
FinancialPolicyVolumeXVIChapter01.pdf
---------------------------------------------------------------------------
    While the bill would restrict a VA employee from serving as a 
purchase cardholder or an approving official even in cases where it is 
the employee's primary duty and in such cases The American Legion sees 
no provision contained within the legislation that addresses the future 
job description of the employee.
    The objectives of the Purchase Card Program are to:

      Reduce paperwork and administrative costs for the 
acquisition of supplies and services within the existing FAR;

      Streamline payment procedures and improve cash management 
practices, such as consolidating payments and reducing petty cash 
funds; and

      Provide procedural checks and feedback to improve 
management control.

    All cardholders are required to use the purchase card for 
authorized procurement in accordance with Simplified Acquisition 
Procedures (FAR Part 13 and Veterans Affairs Acquisition Regulations 
(VAAR) Part 813.)
    In 2017, Veterans Affairs Office of Inspector General (VAOIG) 
conducted two Audits of VA's Purchase Card program. On June 27, 2017, 
VAOIG issued report, 15-01227-249, entitled, ``Review of Alleged 
Irregular Use of Purchase Cards by the Engineering Service at the Carl 
Vinson VA Medical Center in Dublin, Georgia.'' \6\
---------------------------------------------------------------------------
    \6\ VA OIG Report - 15-01227-249 https://www.va.gov/oig/pubs/VAOIG-
15-01217-249.pdf
---------------------------------------------------------------------------
    VAOIG substantiated the allegation that Dublin VA Medical Center 
cardholders in Engineering Service made unauthorized commitments by 
splitting purchases and exceeding micro-purchase limits. Of the 130 
sampled purchases made from October 2012 through March 2015, 23 were 
split purchases that avoided the $3,000 limit for supplies and 14 were 
purchases that exceeded the $2,500 limit for services.
    This happened because approving officials did not adequately 
monitor cardholders to ensure compliance with VA policy.
    VAOIG did not substantiate the allegations that cardholders made 
duplicate payments to Ryland Contracting Incorporated and Sterilizer 
Technical Specialists. However, VAOIG found cardholders inappropriately 
made 91 micro-purchases for services received from these vendors 
without establishing contracts.
    On September 2017, VAOIG Issued report, 15-04929-351, entitled 
``Audit of Purchase Card Use To Procure Prosthetics.'' \7\
---------------------------------------------------------------------------
    \7\ VA OIG Report - 15-04929p351 https://www.va.gov/oig/pubs/VAOIG-
15-04929-351.pdf
---------------------------------------------------------------------------
    The VA OIG received an allegation in 2015 that the VHA 
inappropriately used Government purchase cards to procure commonly used 
prosthetics, instead of establishing contracts that would leverage 
VHA's purchasing power, and failed to ensure VA received fair and 
reasonable prices. Furthermore, VHA allegedly did not report purchases 
in the Federal Procurement Data System (FPDS).
    VAOIG substantiated the allegations that for some prosthetic 
purchases above the micro-purchase limit, VHA did not leverage its 
purchasing power by establishing contracts and did not ensure fair and 
reasonable prices were paid. A micro-purchase is an acquisition using 
simplified acquisition procedures where the aggregate amount does not 
exceed $3,500.
    VAOIG stated these improper actions occurred because VHA controls 
did not ensure the Prosthetic and Sensory Aids Service (PSAS) 
sufficiently analyzed prosthetic purchases to identify commonly used 
prosthetics and the Procurement and Logistics Office (P&LO) did not 
adequately monitor Network Contracting Office (NCO) procurement 
practices to ensure contracts were established. As a result, VAOIG 
estimated VHA might have paid higher prices for an estimated $256.7 
million in prosthetics purchases during FY 2015 by not establishing 
contracts.
    VAOIG did not substantiate the allegation that VHA failed to report 
prosthetic procurements in FPDS. We estimated VHA reported about 86,200 
of the 87,100 FY 2015 prosthetic purchases (99 percent) in FPDS.
    Unauthorized commitments require ratification. According to VAOIG, 
VHA did not have reasonable assurance that VA medical facilities used 
taxpayer funds efficiently when procuring prosthetics. In response to 
the investigation, VHA initiated actions to pursue contracts for 
commonly used surgical implant prosthetics. In addition, VHA has 
established pre-authorization procedures and plans to authorize the use 
of ordering to help mitigate improper payments and unauthorized 
commitments associated with surgical implants.
    Again, The American Legion approaches management of employees with 
extreme caution when addressing agency/employee behavior related 
matters. The American Legion could not find any evidence in any of the 
VAOIG reports that prove that the government spent more money than they 
otherwise would have, or that any of the purchases would have saved 
money using more complicated and expensive contracting vehicles.
    Since the bill would restrict a VA employee from serving as a 
purchase cardholder or an approving official if this is one the 
employee's primary duties, The American Legion is concerned that the 
bill would limit an employee from performing their assigned duties, 
which may result in additional and unidentified personnel actions. The 
American Legion believes VA already has the authority to take action on 
employees who fail to follow VA policies, and is not convinced this 
legislation is necessary.
The American Legion does not support this draft bill.
                               DRAFT BILL

    To direct the Secretary of Veterans Affairs to carry out the 
Medical Surgical Prime Vendor program using multiple prime vendors.

    In terms of contracting, private sector hospitals use multiple 
Group Purchasing Organization (GPOs) who bid down the price of 
manufactured medical equipment. This practice, forces the GPOs to 
compete among themselves, yielding the lowest possible prices, which is 
at the benefit of the hospitals, or the general market place. In 
summary, competition drives down prices.
    Utilizing Medical Surgical Prime Vendor (MSPV) Gen2, VA has 
proposed using only one large single vendor as opposed to the current 
model of using multiple vendors. When you decide to use only one 
vendor, prices may be inflated, simply because of the lack of 
competition. Ensuring there is competition, the VA, and the government 
as a whole, typically receives better pricing, which is ultimately at 
the benefit of the U.S. taxpayer.
    The American Legion understands the simplification of utilizing 
only one vendor, however, that does not yield the best result for the 
veteran, agency or the federal government. Utilizing a singular vendor 
is easier to deal with, but this procurement shortcut undermines the 
competitive system, and can result in VA overpaying for equipment or, 
not being able to obtain quality material necessary to supply the 
largest medical network that treats veterans.
    In the current model that VA is employing, Service Disabled Veteran 
Owned Small Businesses (SDVOSBs) work with prime vendors, which not 
only assists and encourages veterans to work in this realm, but also 
allows for competition and drives down costs. SDVOSBs add value to the 
procurement process by providing last mile delivery, customer care, and 
maintenance services for prime vendors.
    In short, The American Legion opposes the Department of Veterans 
Affairs switching to a system that allows them to simply utilize one 
vendor, and urges Congress to force VA to allow for competitive 
bidding. Further, The American Legion, by resolution \8\, supports 
reasonable set-asides of federal procurements and contracts for 
businesses owned and operated by veterans. Allowing the VA to 
essentially encourage a monopoly on medical supplies and equipment is 
not only wrong, but it could also decrease SDVOSB participation, 
potentially harming the quality care that veterans receive at VA, all 
while overspending taxpayer funding.
---------------------------------------------------------------------------
    \8\ The American Legion Resolution No. 154: Support Reasonable Set-
Aside of Federal Procurements and Contracts for Businesses Owned and 
Operated by Veterans
---------------------------------------------------------------------------
The American Legion supports the draft bill as currently written.
                               Conclusion
    As always, The American Legion thanks this subcommittee for the 
opportunity to explain the position of the over 2 million veteran 
members of this organization. For additional information regarding this 
testimony, please contact Mr. Matthew Shuman at The American Legion's 
Legislative Division at (202) 861-2700 or [email protected].

                                 
                 Prepared Statement of Scott Denniston
    Good afternoon, Chairman Bergman, Ranking Member Kuster, and 
distinguished members of the Subcommittee. On behalf of the members of 
the National Veteran Small Business Coalition and all veteran (VOSB) 
and service-disabled veteran-owned small businesses (SDVOSB) trying to 
do business with the Department of Veterans Affairs (VA), I sincerely 
appreciate the opportunity to discuss the proposed pieces of 
legislation as invited. The National Veteran Small Business Coalition 
(NVSBC) is the nation's largest non-profit trade association 
representing veteran and service-disabled veteran-owned small business 
in the federal marketplace as prime and subcontractors.
    I would like to first address HR3497 and HR 4245 dealing with 
Veterans Electronic Health Records. We believe HR 3497 to allow 
veterans to use a portable medical records storage system is good news 
for veterans as it allows easier access to their own personal health 
records. HR 4245 appears to address Congress' concerns regarding the 
contract the VA Secretary announced last fall which he intends to award 
to Cerner to modernization of VA's electronic patient health care 
record systems. Our concern with this contract is VA has taken a very 
minimalistic approach to providing subcontracting opportunities for 
small business, including veteran and service-disabled veteran-owned 
small business. VA only required the awardee to meet the ``minimum 
goals'' of 17% to small business, 5% to SDVOSBs and 7% to VOSBs. 
Information technology contracts such as this, generally provide many 
opportunities for prime contractors to subcontract to small business 
including VOSBs and SDVOSBs. For example, the FY 2018 subcontracting 
goals established by the U.S. Small Business Administration (SBA) for 
other agencies include the following:

    Department of Defense
    33%
    Department of Energy
    42%
    Department of Homeland Security
    40%

    Also, over the past 10 years VA has NEVER once achieved its 
subcontracting goal negotiated with SBA. Given VA's poor track record 
and the lower goals accepted for this contract we implore this 
committee to include in HR 4245 a provision requiring the Secretary of 
Veterans Affairs to report to Congress on a quarterly basis the 
accomplishments against the small business subcontracting goals to 
include subcontract awards to VOSBs and SDVOSBs.
    Next, I would like to address the draft bill regarding VA employees 
found to have knowingly misused VA purchase cards. The NVSBC is fully 
supportive of this draft. Abuses of purchase cards has been wide-
spread. This trend will only continue with the recent raising of the 
limitations on purchases using the cards from $3,500.00 to $10,000.00. 
We have found that many times these issues arise due to poorly written 
polices and training on the part of VA acquisition leadership, not 
because VA employees are dishonest people.
    The last draft bill you asked me to discuss directs the Secretary 
of VA to carry out the Medical Surgical Prime Vendor (MSPV) program 
using multiple prime vendors. Before addressing the specifics of the 
draft bill I want to share with you our observations having lived the 
current prime vendor program for the past two years and numerous 
meetings with both Veterans Health Administration (VHA) and Strategic 
Acquisition Center (SAC) leadership. The current program is being 
driven for contracting expediency, not based on clinical input to 
improve veteran patient care. There is little to no clinical input in 
our opinion. VHA and the SAC appear to work on conflicting time frames. 
There is no strategic plan. Determining who is in charge is impossible. 
The rules of engagement change on a weekly basis as to acquisition 
strategies to be used. Frankly we wonder how often VHA and SAC actually 
communicate needs/requirements and solutions. Also, there appears to be 
much more communication with the large business community than 
communication with the VOSB/SDVOSB community. Communication with the 
VOSB/SDVOSB community is after the fact when we are told what will 
happen as opposed to having an opportunity to make recommendations to 
improve the process. VA seems to forget, as veterans and users of the 
VA health care system we have a personal and vested interest in its 
success. Also, there is little data available as to products, 
quantities or delivery requirements VA intends to purchase.
    The NVSBC, in representing all VOSBs/SDVOSBs trying to do work with 
VA would be remise if we didn't again point out the anti- veteran small 
business positions expressed by VA's senior acquisition official during 
this Committee's Veterans First Contracting Program Roundtable held on 
October 11th, 2017. That official has publically stated numerous times 
that VOSBs and SDVOSBs add no value, cost more and are administratively 
burdensome to work with. He further stated his position that VA should 
not pay a penny more to buy from a VOSB or SDVOSB. This culture as well 
as the policies implemented by VA limit the opportunities for VOSBs and 
SDVOSBs to work at VA and fly in the face of the VETS First Contracting 
Program as well as the U.S. Supreme Court decision in Kingdomware. 
Bottom line; there is a toxic culture in VA, particularly in VA Central 
Office to working with the veteran small business community.
    In the fall of 2017 when we learned the SAC intended, under MSPV 
2.0, to award one contract for the MSPV 2.0 program we were appalled. 
Particularly when we learned the contract would require the MSPV 2.0 
contractor to also determine the formulary of products and to also 
purchase all products to be included on the formulary. We asked what 
part VOSBs and SDVOSBs would play in MSPV 2.0 and were told they would 
be subcontractors to the MSPV 2.0 prime. When asked how VETS First 
would apply to MSPV 2.0 we were told it doesn't as VOSBs and SDVOSBS 
would be ``subcontractors''. When we asked what type of small business 
subcontracting plan would be required we were told ``don't know yet''. 
When we addressed the fact that in the past 10 years VA has NEVER 
achieved its subcontracting goals we were told ``just trust us''! In 
addition, relegating VOSBs and SDVOSBs to subcontractors allows VA to 
avoid the issue of a waiver of the SBA ``Non-Manufacturer Rule ``. VA 
has established a policy of requiring HCA approval prior to any 
contracting officer requesting a waiver from SBA. WE believe this 
policy to be in direct violation of the Small Business Act. We also 
know of and appreciate this Committee's concern over this overly 
burdensome requirement which we believe is another attempt by VA to 
circumvent VETS First.
    We support the Committee's position that VA cannot have just one 
prime vendor. Our experience in the private sector is commercial 
hospital systems are members of a number of ``Group Purchasing 
Organizations (GPOs). This allows for flexibility of products as well 
as guarantees product availability while at the same time taking 
advantage of volume discounts. Commercial hospital systems have learned 
they need flexibility which doesn't come from a one supplier solution. 
We believe VA needs to develop a similar concept. As I stated 
previously, VA's plan seems to be driven for the benefit of the 
contracting process, not the needs of veteran's healthcare needs. We 
also do not understand why VA does not use the VA Federal Supply 
Schedule (FSS) contracts as a starting point for formulary products. 
FSS contracts by definition are considered ``fair and reasonable'' 
prices. VA, as well as the large and small business community has put 
tremendous effort into the success of the FSS program. We do not 
understand why VA appears to be abandoning FSS?
    We fully support the draft bill provisions that the prime vendor 
should not be the decider of the formulary nor of the suppliers of the 
products. We strongly suggest this Committee direct VHA and SAC 
leadership to define requirements, develop a process for clinical input 
and develop a strategic plan for moving forward with MSPV 2.0. The plan 
must include how VA intends to provide opportunities for VOSBs and 
SDVOSBs as required by VETS First. This plan should then be shared with 
industry, large business and small business for comments and 
suggestions. We believe this will provide better outcomes for all 
parties.
    During this Committee's roundtable on the VETS First program on 
October 11th, 2017, Chairman Bergman invited participants to provide 
recommendations to the Committee for improving VETS First at VA. NVSBC 
provided 8 specific recommendations in a letter to this Committee dated 
October 17, 2017. These recommendations are still relevant today and I 
would encourage the Committee to consider the recommendations moving 
forward. I have provided a copy of our letter with my testimony. We are 
also available to meet and discuss any of the recommendations with any 
member of the Committee.
    I also want to bring to the Committee's attention a solution to the 
micro-purchase program NVSBC has been developing for the past year. VA, 
buy their own statistics spends approximately $4 billion per year under 
micro-purchases using purchase cards. In the future this amount will 
sky rocket as the micro-purchase threshold in VA is being raised from 
$3,500 to $10,000. VA policy exempts micro-purchases from the VETS 
First program. This is in spite of the U.S. Supreme Court decision in 
Kingdomware where the court determined all ``contract actions'' are 
subject to VETS First. Micro-purchases meet the Federal Acquisition 
Regulations (FAR) definition of a ``contract action''.
    Over the past year, NVSBC has met with VA leaders from VHA, SAC, 
and the Office of Small Business Programs (OSDBU) to discuss how to 
provide more micro-purchase opportunities to the VOSB and SDVOSB 
community. These discussions have led NVSBC to develop in conjunction 
with an NVSBC member, Veratics of Indian Beach, FL, an electronic 
ordering platform, similar to Amazon, called ``Go VETS''. Our vision is 
all VA verified VOSBs and SDVOSBs who can provide products to VA under 
the micro-purchase threshold will upload their products on the 
platform. VA purchasing personnel with then have a ``one stop, easy 
button'' to purchase products, using their purchase cards, from 
verified VOSBs and SDVOSBs. We are starting in the medical products 
area as it represents the greatest spend and VA is currently buying 
many of these products from the 4 current Medical Surgical Prime 
Vendors, and many times at inflated costs. As we fine tune the platform 
other product lines will be added from verified VOSBs and SDVOSBs. As 
you can imagine we have overcome many obstacles to get to this point, 
but we are optimistic we can have ``Go VETS'' operational in 90 days. 
We are also encouraged by the fact that many VA officials with whom we 
have discussed this platform over the past year are warming to the idea 
and see its value. We are happy to demo ``Go VETS'' to the Committee as 
well as provide updates on our progress. We are very excited by the 
potential to provide many more opportunities to VOSBs and SDVOSBs.
    Mr. Chairman, Ranking Member, and Members of the Committee, this 
concludes my statement. Thank you for the opportunity to testify before 
the Committee today. I am happy to respond to any questions or comments 
you may have.

                                 
                       Statements For The Record

                              Ken Wiseman
    Chairman Bergman, Ranking Member Kuster, and Members of the 
Subcommittee, on behalf of the men and women of the Veterans of Foreign 
Wars of the United States (VFW) and its Auxiliary, I would like to 
thank you for the opportunity to submit testimony regarding legislation 
pending before this committee.

H.R. 3497, Modernization of Medical Records Access for Veterans Act of 
    2017

    This legislation would provide a portable ``credit card sized'' 
health record for veterans. While this sounds appealing, the VFW is 
very concerned about this bill and opposes its passage.
    The act of a veteran accessing their record and getting a copy is 
something they can already do. Veterans have the ability to get copies 
by using their My HealtheVet account. After logging into their account, 
the first page a veteran sees offers a selection of four large 
``buttons'' and accessing their medical record is the fourth option. 
VFW staff tested the ability to download their record using this 
method, and in less than 90 seconds an electronic version had been 
downloaded. For those who do not use My HealtheVet, a hard copy can be 
obtained by the veteran from their local Department of Veterans Affairs 
(VA) Medical Center. As such, the VFW does not see how this improves 
the access a veteran has to VA.
    To ensure that the veteran's medical record follows them after 
military service, VA has recently begun the process of adopting a 
commercial off-the-shelf system for the future electronic health 
record. The Electronic Health Record Modernization Program (EHRMP) will 
allow veterans to have more access to their medical records. This 
legislation allows the discharging service member to electronically 
``carry'' their record to VA and for various portions of VA to interact 
with itself and with community care providers while caring for the 
veteran. The VFW believes H.R. 3497 could create a competing medical 
record that would prevent VA and the veteran from having all needed 
information on one platform, thus slowing the delivery of care. Because 
of a lack of vital information, this could lead to decisions being made 
that could harm the health of the veteran.
    In looking at our first two concerns together, the VFW worries 
about interoperability between the device that would be created and 
other VA systems, and security of the information stored on it. There 
is no requirement for the device to ever be connected to, or even 
interoperable with, the electronic health record that will result from 
EHRMP. A lost device could also lead to compromised information and 
this is a real threat in the modern day.
    Finally, the VFW opposes this bill because it specifically bans new 
appropriations for implementation. Unfunded mandates harm other 
programs by forcing VA to take money from other parts of its IT budget. 
The VFW is already concerned about VA's IT budget funding levels. This 
legislation would cause VA to divert precious and limited resources 
from other programs, thus hindering modernization of IT capabilities 
and implementation of EHRMP.

H.R. 4245, Veterans' Electronic Health Record Modernization Oversight 
    Act of 2017

    The VFW is strongly supportive of VA's goal to have a medical 
record that is interoperable with DOD, so that as a service member 
becomes a veteran, their health history follows them. The work to 
accomplish such a major project is not something to be taken lightly, 
and the VFW supports efforts to ensure oversight of the project. The 
VFW supports H.R. 4245, which would help accomplish this goal.
    The VFW is concerned by testimony regarding EHRMP as it relates to 
ensuring the project stays on budget on and on time. We know that 
Secretary of Veterans Affairs Shulkin has taken steps to ensure this 
project results in a program that is truly interoperable, and we 
support this as well. Only regular oversight, reports on actions, and 
explanations of why deviations from set plans were allowed, will ensure 
the project succeeds. Further, tracking of associated expenditures will 
ensure that other IT projects will not be starved of funding by 
movement of funds within the budget for IT programs at VA. We applaud 
the bipartisan work on this legislation and urge quick passage.

Draft Bill to Restrict Purchase Card Abuse

    The VFW supports any actions necessary to ensure VA employees are 
using purchase cards responsibly. Fraud, waste, and abuse of government 
funds are detrimental to the overall success of VA's mission. If any 
employees are found to knowingly use purchase cards maliciously, then 
the right to use those cards must be revoked. We support removal of 
purchase card authority for employees who maliciously or irresponsibly 
abuse them.

Draft Bill to Use Regional Medical Surgical Prime Vendors

    The VFW sees value with the intent of this proposed bill. We always 
encourage the expansion of opportunities for Veteran Owned Small 
Businesses to compete for contracts with VA, but we also see value in 
having a single supplier if the situation is necessary. Mandating VA to 
use regional prime vendors could have a positive impact on competition 
in the market place; however, we would not want to see it negatively 
impact overall cost. The VFW does not have a position on this bill.

                                 
                  Congresswoman Cathy McMorris Rodgers
    I'd like to thank Chairman Bergman and Ranking Member Kuster for 
holding this important legislative hearing to address the fundamental 
need for comprehensive medical records for veterans.
    Every day, I hear from veterans in Eastern Washington who are in 
desperate need of help from the VA, yet so often they are not receiving 
the help they need or deserve.
    The VA's sole mission is to serve our veterans. Instead of having 
the red carpet rolled out for them, veterans are treated like a burden.
    This includes veterans attempting to simply obtain their medical 
records from the VA. I have even heard from providers in the community 
who have been frustrated to the point of tears because they are unable 
to treat veterans because the patient cannot obtain his own medical 
records. Some veterans have waited more than two years to simply get 
their medical records from the VA. That is unacceptable.
    But there is an easy, common sense, off-the-shelf solution for this 
problem.
    My bill, introduced along with Congressman Seth Moulton, is a 
bipartisan, readily available solution to this problem. It directs the 
Secretary of the VA to establish a secure, patient-centered, portable 
medical records systems that would allow veterans to have access to 
their own comprehensive medical records.
    As with most things in the VA, this is not an issue where the wheel 
must be reinvented to fix the issue. Commercial, off-the-shelf 
solutions already exist in the private sector. This kind of technology 
is already out there, deployed in hospitals in the private sector.
    For example: VYRTY, a company based out of Washington state, is a 
secure offline data repository, with end-to-end encryption and remote 
record completion. VYRTY is a fully secure, portable, and HIPAA 
compliant health record management system that is currently deployed in 
Washington state--with Evergreen Health Partners, Evergreen Health 
Hospital, Halvorson Cancer Center, and the Seattle Cancer Care 
Alliance, and growing--and is interoperable across 89 different health 
records (EHR's)/platforms.

VA Concern: Challenges related to network security and compatibility 
    with electronic health records systems make doctors resistant to 
    accepting plug-in electronic devices from a patient.

    We have discussed the security concerns that some may have in 
conversations with the VA Office of Information and Technology (OI&T) 
and the VA Committee.
    While these concerns would be valid on other scenarios, the 
technology that exists and that is in use today is secure and is HIPAA 
compliant. It is compatible across all electronic health records 
systems, including Cerner, and is encrypted end-to-end.
    The fact that it is in use today shows that it does not make 
doctors resistant to accepting plug-in electronic devices from 
patients.

VA Concern: Even with a portable storage device, veterans may not 
    always have the most current copy of their record as this depends 
    on when the files are downloaded during the Veteran's visit. It may 
    not reflect the current visit including notes and the results of 
    diagnostic tests that were ordered during the visit.

    With the technology that is currently deployed, patients have a 
current copy and the most up-to-date version of their medical record. 
Specifically, one of the important aspects of VYRTY's technology is 
that they perform record completion. When a patient leaves his or her 
provider, they are leaving with the most up-to-date medical record 
information because it is updated immediately.
    While the VA Department gives veterans access to the Blue Button 
Initiative through MyHealtheVet, this means that the veteran is 
constantly downloading, printing, and taking their latest record every 
time they go to an outside provider or to a different VA facility, or 
they're waiting for a document to download while sitting in a 
provider's office. This puts the burden on the veteran to be 
responsible for printing and bringing their most up-to-date records.
    With the VYRTY's technology, the veteran and the provider have all 
of the information on a chip which then just has to be handed to the 
doctor. That's it.

VA Concern: the Department of Health and Human Services will be 
    promulgating regulations to require health IT developers to have 
    application programming interfaces (APIs) that enable easy access, 
    use, and exchange of health information, and this technology would 
    obviate the need for, or even the help from, the kind of special 
    purpose storage system that the bill would foster.

    First of all, the VA is not regulated by HHS.
    Additionally, And again, the technology that this legislation 
references, is already in use today, therefore it is already up-to-date 
and in line with current regulations.
    VYRTY has the capability to be integrated directly--and is already 
supporting direct data feeds in their deployments. The card that is 
used by VYRTY is a personal repository of all patients' records. It 
doesn't matter whether those records are coming from an EHR through the 
``print'' functionality or through application programming interfaces 
(API) level integration. VYRTY has an offline storage capability--with 
online synchronization capabilities--that deliver stored copies of the 
records between points of service.

Closing

    I am disappointed and concerned by the VA Department's decision to 
oppose the legislation--that they've chosen to focus on the challenges 
rather than the opportunities to offer our veterans high quality care.
    My staff and I have held several meeting with the VA's Office of 
Information and Technology (OI&T), where legislation was discussed, 
where VYRTY was brought in to demonstrate their technology, and where 
the draft legislation was sent to the VA before introduction for 
comments and concerns, yet we have--IN WRITING--that the OI&T was 
supportive of the legislation. In the VA's words: ``this looks good to 
us here.''
    What this bill is proposing is a common sense, off-the-shelf, 
readily available solution to a persistent problem among veterans 
today.
    While I am pleased that the Secretary is serious about 
modernization of the EHR system within the VA, but not only is the VA-
Cerner contract currently paused, the implementation period is ten 
years.
    Since I came to Congress in 2005, the budget for the VA Department 
has nearly tripled, yet the problems persist.
    The VA has one mission - to serve our veterans, and right now, the 
VA has lost sight of that mission.
    Thank you, Chairman Bergman and Ranking Member Kuster.
    I yield back.

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