[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]




 
      MISSION READINESS: VA'S EMERGENCY RESPONSE AND CACHE PROGRAM

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

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

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

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        WEDNESDAY, JUNE 19, 2019

                               __________

                           Serial No. 116-19

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
       
       
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             U.S. GOVERNMENT PUBLISHING OFFICE 
40-820               WASHINGTON : 2021         
        
        
                     COMMITTEE ON VETERANS' AFFAIRS

                   MARK TAKANO, California, Chairman

JULIA BROWNLEY, California           DAVID P. ROE, Tenessee, Ranking 
KATHLEEN M. RICE, New York               Member
CONOR LAMB, Pennsylvania, Vice-      GUS M. BILIRAKIS, Florida
    Chairman                         AUMUA AMATA COLEMAN RADEWAGEN, 
MIKE LEVIN, California                   American Samoa
MAX ROSE, New York                   MIKE BOST, Illinois
CHRIS PAPPAS, New Hampshire          NEAL P. DUNN, Florida
ELAINE G. LURIA, Virginia            JACK BERGMAN, Michigan
SUSIE LEE, Nevada                    JIM BANKS, Indiana
JOE CUNNINGHAM, South Carolina       ANDY BARR, Kentucky
GILBERT RAY CISNEROS, JR.,           DANIEL MEUSER, Pennsylvania
    California                       STEVE WATKINS, Kansas
COLLIN C. PETERSON, Minnesota        CHIP ROY, Texas
GREGORIO KILILI CAMACHO SABLAN,      W. GREGORY STEUBE, Florida
    Northern Mariana Islands
COLIN Z. ALLRED, Texas
LAUREN UNDERWOOD, Illinois
ANTHONY BRINDISI, New York
                 Ray Kelley, Democratic Staff Director
                 Jon Towers, Republican Staff Director

                         SUBCOMMITTEE ON HEALTH

                 JULIA BROWNLEY, California, Chairwoman

CONOR LAMB, Pennsylvania             NEAL P. DUNN, Florida, Ranking 
MIKE LEVIN, California                   Member
ANTHONY BRINDISI, New York           AUMUA AMATA COLEMAN RADEWAGEN, 
MAX ROSE, New York                       American Samoa
GILBERT RAY CISNEROS, Jr.            ANDY BARR, Kentucky
    California                       DANIEL MEUSER, Pennsylvania
GREGORIO KILILI CAMACHO SABLAN,      W. GREGORY STEUBE, Florida
    Northern Mariana Islands

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

                              ----------                              

                        Wednesday, June 19, 2019

                                                                   Page

Mission Readiness: VA's Emergency Response And Cache Program.....     1

                           OPENING STATEMENTS

Honorable Julia Brownley, Chairwoman.............................     1
Honorable Neal P. Dunn, Ranking Member...........................     3

                               WITNESSES

Mr. Lewis Ratchford, Deputy Assistant Secretary for the Office of 
  Emergency Management and Resilience, Office of Operations, 
  Security, and PreparednessU.S. Department of Veterans Affairs..     4
    Prepared Statement...........................................    21

        Accompanied by:

    Dr. Paul Kim, Director, Office of Emergency Management, 
        Veterans Health Administration

    Dr. Larry Mole, Chief Consultant, Population Health Services, 
        Office of Public Health, Veterans Health Administration

    Dr. Steve Steinwandt, Director, Consolidated Mail Outpatient 
        Pharmacy, Veterans Health Administration

Mr. Larry Reinkemeyer, Assistant Inspector General for Audits and 
  EvaluationsOffice of Inspector General, Department of Veterans 
  Affairs........................................................     6
    Prepared Statement...........................................    23

                        STATEMENT FOR THE RECORD

Heritage Health Solutions........................................    28


      MISSION READINESS: VA'S EMERGENCY RESPONSE AND CACHE PROGRAM

                              ----------                              


                        Wednesday, June 19, 2019

            Committee on Veterans' Affairs,
                    U. S. House of Representatives,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to notice, at 3:23 a.m., in 
Room 210, House Visitors Center, Hon. Julia Brownley presiding.
    Present: Representatives Brownley, Brindisi, Rose, 
Cisneros, Dunn, Meuser, and Steube.

        OPENING STATEMENT OF JULIA BROWNLEY, CHAIRWOMAN

    Ms. Brownley. Good afternoon. Thank you all for joining us 
here today for a hearing to discuss the VA's readiness to 
perform one of its most crucial functions, its fourth mission 
that seeks to improve the Nation's preparedness to respond to 
public health emergencies both, natural and manmade. Today we 
examine one piece of that mission, the All-Hazards Emergency 
Cache program.
    Following the attacks on 9/11, VA established an Emergency 
Cache program to make drugs and medical supplies available for 
the treatment of veterans, VA employees, and civilians in the 
aftermath of a mass-casualty event.
    As it is hurricane season, this hearing will also assess 
the readiness of the Office of Emergency Management and 
Emergency Pharmacy Services as the frequency of extreme weather 
events increase.
    The Cache Program is charged with being the Nation's safety 
net for up to 3 days between a catastrophic event and the 
arrival of the Department of Health and Human Services Disease 
Control and Prevention's Strategic National Stockpile, SNS for 
short. The Emergency Cache program stockpiles drugs and medical 
supplies at 141 sites across the country with standard supply 
of 38 drugs and 44 medical supplies worth around $44 million.
    An Inspector General's report from October of 2018 found 
that the Veterans Health Administration is not maintaining its 
Emergency Cache program in a mission-ready status; in fact, all 
141 sites had expired, missing, and/or excessive--too many 
drugs. The IG found VA failed to adequately store supplies, 
conduct mandatory inspections, and run physical activation 
drills.
    The program suffers from inconsistent oversight and a 
confusing governance structure that leaves no one accountable 
for its inability to activate. Of particular concern is the 
timely rotation and resupplying of drugs that, until recently, 
relied on the competency of one person, an inventory-management 
specialist who was charged with supplying VHA's caches with in-
date drugs.
    The IG found that in almost all cases of expired drugs, 
this specialist had failed to ship replacements before the 
drugs' expiration. The impact of this ineptitude was severe. Of 
the 650 drugs the IG inspected, 27 percent were expired. Of 
those drugs that were expired, over a third had been expired 
for more than 3 months or longer and several had been expired 
for more than a year.
    One facility has 3,168 units of a drug that expired in 
April of 2013. The drugs that were most frequently expired were 
anthracic prophylaxis, beta blockers, antivirals used to treat 
influenza, and morphine. In 2018, an estimated 6.1 million 
units of drugs were expired across the 141 caches, worth around 
$4.6 million. VA has informed my staff that this person is no 
longer with the VA and the responsibility for the supply 
process is now with a consolidated-mail, outpatient pharmacy.
    I wish I could say VA is ready to fulfill this duty to our 
veterans and the public, but it just simply isn't. Even with a 
full and properly stocked cache, there is no governance 
structure in place that ensures the medical center directors 
are conducting the required annual drill exercises.
    In fiscal year 2017, 15 of cache sites did not conduct 
drills. Similarly, only 87 percent of caches reported that they 
were inspected by the Office of Emergency Management, but just 
68 percent could provide documentation of the inspection.
    There currently is no one person tasked with the 
responsibility of overall cache readiness for VHA. While no 
cache has ever been officially activated, medical center 
directors have accessed them during natural disasters and 
epidemics; in fact, such use has increased in recent years, 
particularly in response to drug shortages at medical centers. 
Twenty-eight percent of VA's cache sites accessed drugs in a 6-
month period in 2018.
    We need to better understand why VA facilities are falling 
back on their emergency supplies this frequently and how 
dynamic the Cache Program is to accommodate such frequent drug 
shortages.
    Further, it is unclear how well VA facilitates each 
established plans of action and trains staff to deploy cache 
contents to an effective area. Frontline staff have informed 
this Subcommittee they feel underrepresented, and drills, if 
they happen at all, are more often done by phone, freight 
elevators and doorways aren't big enough to allow cache carts 
through, controlled substances are marked off with baby gates, 
staff shortages make activation drills and inventorying a 
particularly taxing effort. While we all desperately hope that 
this training never has to be put to use, we know the cost of 
not being prepared.
    Lastly, we hope to hear how VA is or is not modifying the 
role of the cache to meet the new emerging threats of climate 
change. How does VA plan to meet the changing nature of 
disaster, as weather events intensify, and diseases spread to 
new climates? The findings of the Inspector General show the 
Cache Program has alarmingly weak protections in place to 
maintain critical resources and ensure VHA is able to treat a 
devastated population.
    VA's fourth mission is one of the most sacred duties and 
the scathing findings of this report, compounded by the 
Subcommittee's oversight visits offer us no reason to believe 
VA is ready to fulfill its role, should a disaster strike.
    Dr. Dunn and I both come from districts that have recently 
been affected by extreme weather and we are eager to hear of 
VA's efforts to improve. And with that, I now recognize Ranking 
Member Dunn for his opening remarks.

       OPENING STATEMENT OF NEAL P. DUNN, RANKING MEMBER

    Mr. Dunn. Thank you very much, Madam Chair.
    Emergency management, the topic of today's hearing is a 
particularly poignant and timely one for me. As the chairwoman 
noted, last year, my district was--the Second District of 
Florida by the way--was devastated by Hurricane Michael. Many 
of my friends, neighbors, and constituents suffered truly 
terrible losses and are still living with the daily reality 
from recovering from the hurricane. As we are now at the start 
of another hurricane condition, there is no better time for us 
to be discussing the role of the Department of Veterans Affairs 
in responding to disasters, whether they be manmade or natural.
    The VA's so-called fourth mission is to be the primary 
backup health care system to the Department of Defense, but 
also to assist in the Federal response efforts and ensure 
safety and continuity of care not only for veterans, but even 
for civilians, as needed, during times of emergency or 
conflict. So, this is an area where we would expect the 
veterans to excel. As a national health care system, the VA is 
often able to leverage its scale and its footprint to ensure 
that veterans are cared for when disaster strikes.
    However, today, we are discussing a rather alarming report 
by the VA Inspector General that found serious deficiencies in 
the management of the VA's emergency medication Cache Program. 
This emergency medication program was created after 9/11 to 
ensure that needed medications and supplies were readily 
accessible to treat veterans, VA employees, civilians, et 
cetera, following mass casualties.
    As the IG's testimony rightly notes, the serious nature of 
that mission demands some professionalism and careful 
oversight; however, the IG found that the Emergency Cache 
program were seriously deficient in execution, appropriate 
oversight, and accountability.
    When reviewing the emergency sites, the IG found drugs were 
expired, missing--and by the way, I would like to visit that a 
bit; I wonder what is missing--was the morphine among the 
missing drugs--or purchased in excess. The IG also found 
mandatory inspections that were never performed, missed 
opportunities to use soon-to-be-expired drugs that cost the 
modern taxpayers an average of $6.8 million a year.
    All of this means that the VA's ability to ensure the 
availability of needed medications and supplies in the event of 
terrorist attacks or catastrophic natural disasters is in 
question. It also means that the modern veterans and the modern 
taxpayers cannot be assured that the VA is spending that money 
wisely, nor is it adequately prepared to prepare its fourth 
mission. That is failure twice over. I understand the VA has 
been working in the months since this IG report to rectify the 
serious issues and I look forward to hearing about that today.
    With that, Madam Chair, I thank you and yield back.
    Ms. Brownley. Thank you, Dr. Dunn.
    So, we shall begin. And on today's panel we have Mr. Lewis 
Ratchford, Deputy Assistant Secretary for the Office of 
Emergency Management and Resilience at the Office of 
Operations, Security, and Preparedness for the VA. Mr. 
Ratchford is accompanied by Dr. Paul Kim. Dr. Kim is the 
Director of the Office of Emergency Management at the Veterans 
Health Administration. Dr. Larry Mole is the Chief Consultant, 
Population Health Services, in the Office of Public Health at 
the Veterans Health Administration. And Dr. Steve Steinwandt is 
the Director of the Consolidated Mail Outpatient Pharmacy at 
the Veterans Health Administration.
    Also here is Mr. Larry Reinkemeyer, Assistant Inspector 
General for Audits and Evaluations, Office of Inspector 
General, Department of Veterans Affairs.
    So, thank you all, gentlemen, for being here.
    Mr. Ratchford, you are now recognized for 5 minutes.

                  STATEMENT OF LEWIS RATCHFORD

    Mr. Ratchford. Good morning, Chairwoman Brownley, Ranking 
Member Dunn, and Members of the Subcommittee. Thank you for the 
opportunity to discuss the VA Emergency Response and All-
Hazards Emergency Cache Program.
    I am accompanied today by my colleagues from the Veterans 
Health Administration, Dr. Larry Mole, chief consultant of 
Population Health Services; Dr. Steve Steinwandt, Consolidated 
Mail Outpatient Pharmacy, director and emergency pharmacy 
director; and Dr. Paul Kim, director of VHA Office of Emergency 
Management.
    In response to the terror attacks on 9/11, the United 
States Government took on a herculean task to overhaul Homeland 
Security efforts across all sectors of government. On November 
7th, 2002, the VA Emergency Preparedness Act of 2002 became law 
and began the transformation of VA preparedness mission. This 
Act not only enhanced VA's role as part of the Federal response 
aimed at preventing the events like 9/11 and the anthrax 
attacks of 2001. It also served as the catalyst for VA to 
develop resilient capabilities that would support continuous 
delivery of services to veterans in an all-hazards environment.
    Simultaneously, the Department of Health and Human Services 
was in the process of implementing the Public Health and 
Bioterrorism Preparedness and Response Act of 2002, which 
enhanced the viability and capability of the Nation's Strategic 
National Stockpile, designed to mitigate consequences of a 
chemical, biological, nuclear, radiological, or other public 
health emergency within the U.S.
    To complement these efforts, VA established the All- 
Hazards Emergency Cache program to bridge the gap until the 
NSNS was operational--their local VA Medical Center. The cache 
includes medical countermeasures that are either not stocked in 
the local VA pharmacy's inventory or quantities that would 
augment what is on hand to enable a rapid response to a public 
health emergency or CBRN event.
    Today, the mission and the cache remain unchanged. As a 
direct result of the VA Office of Inspector General audit, 
dated October 31st, 2018, VA continues to implement 
improvements to increase and ensure the readiness of the cache 
to support consequence management operations and ensure 
continued delivery of services to our Nation's veterans.
    One of VA's proudest moments occurred during the 2017 
hurricane response season when the Department was identified as 
a major contributor to the overall Federal response while 
sustaining local VA operations in the Caribbean. As a testimony 
to VA's preparedness and emergency response capabilities, the 
San Juan VAMC was the only hospital that remained operational 
throughout the response phase of Hurricane Maria. This was 
achieved by VA transporting over 128 short tons of critical 
resources and response equipment to Puerto Rico and deploying 
over 1,039 personnel to support both, VA and Federal mission 
requirements. This included deploying mobile medical units, 
satellite communication systems, a mobile pharmacy, a mobile 
nutritional unit, generators, and oxygen cylinders to name a 
few of these resources that enabled VA's successful response.
    VA appreciates the OIG review as it has led to 
strengthening the Cache Program. Since the publication of the 
report, VA has implemented improvements to inventory management 
and internal controls for the Cache Program. VA has conducted 
training and has assisted medical centers with wall-to-wall 
inventories of all cached drugs and supplies.
    Training is the foundation for a reliable, efficient, and 
accurate cache management program. Additionally, VA has 
developed processes to identify all expired excess drugs that 
are purposely maintained to respond to drug shortages or for 
potential shelf-life extension program testing.
    Training has also been provided on a process to ensure 
expired, excess, incorrect, or missing items discovered during 
inventory activities are handled appropriately. A comprehensive 
review of VHA directives that govern the Cache Program is 
underway which includes assessment of roles and responsibility 
for all entities responsible for cache management and 
oversight.
    We appreciate the opportunity to share our efforts to 
strengthen the VA's readiness to respond to public health or 
CBRN emergencies and our continued commitment to develop 
resilient capabilities to respond to crisis. Our objective is 
to give our Nation's veterans the top-quality care they have 
earned and deserve, even in an all-hazards environment.
    Chairwoman Brownley, we appreciate this Subcommittee's 
continued support and encouragement in identifying and 
resolving challenges as we find new ways to ensure care for 
veterans, regardless of the circumstances. This concludes my 
testimony. My colleagues and I are prepared to respond to any 
questions you may have.

    [The prepared statement of Lewis Ratchford appears in the 
Appendix]

    Ms. Brownley. Thank you, Mr. Ratchford.
    Mr. Reinkemeyer, you are now recognized for 5 minutes. I 
hope I am pronouncing your name--
    Mr. Reinkemeyer. Very close, Reinkemeyer.
    Ms. Brownley. Thank you for being here.

                 STATEMENT OF LARRY REINKEMEYER

    Mr. Reinkemeyer. Thank you, Chairwoman Brownley, Ranking 
Member Dunn, and Members of the Subcommittee. Thank you for the 
opportunity to discuss our recent oversight of the Emergency 
Cache Program.
    I would like to highlight the findings from our October 
2018 report, the ``Emergency Cache Program: Ineffective 
Management Impairs Mission Readiness.'' It examined whether VHA 
effectively managed its emergency drug and medical supply 
caches to ensure their readiness.
    The emergency cache is a critical component of VA's 
preparedness to ensure that drugs and supplies are available in 
the event of a disaster, whether natural or the results of acts 
of violence. The OIG audit team identified several 
deficiencies, such as expired, missing, or excess drugs, 
failures to conduct mandatory annual inspections and activation 
exercises, missed opportunities to use soon-to-expire emergency 
cache drugs, and the lack of efficient program oversight.
    This report's findings mirror findings from other recent 
OIG reports such as poor governance structures, poor planning, 
inadequate or outdated policies, and a failure to communicate 
effectively between VHA offices.
    Responsibility for the policy and supply of the Cache 
Program is shared between 3 different VHA programs. 
Additionally, the facility director makes sure annual cache 
activation exercises occur, decides when to activate the cache, 
and ensures the cache manager is administering the inventory.
    As of January 2018, there were emergency caches at 141 VA 
medical facilities. We conducted this audit by visiting 26 
caches around the country to inspect the caches and their 
contents as well as conducting a survey of all 141 cache 
managers. In reviewing the 26 caches across the country, we 
determined there were common problems at VHA's national level, 
as well as at the facility level.
    Our audit found that VHA's ineffective management and lack 
of effective governance impaired the cache's mission readiness. 
Our audit made 7 findings: all 26 caches had expired drugs; 12 
of the inspected caches were not fully stocked; 8 of the 
inspected caches has excess quantities of drugs; VHA's Office 
of Emergency Management did not always conduct the required 
annual inspections; medical facility directors did not always 
conduct the required activation exercises; medical facilities 
missed opportunities to use soon-to-expire cache drugs; and a 
lack of effective governance resulted in inefficient program 
oversight and increased the likelihood that the Emergency Cache 
Program will not be mission ready.
    We made 7 recommendations to the Executive in Charge, 
Office of the Under Secretary for Health. All our 
recommendations were agreed with and the Executive in Charge's 
action plan was responsive to all of our recommendations.
    While all 7 recommendations remain open, VHA has made 
progress toward implementing the recommendations. They provided 
our staff with an additional update last Friday, and we are 
currently reviewing those materials to see if several of the 
recommendations could be closed.
    The importance of an effective Emergency Cache Program 
cannot be overstated for veterans, employees, and the public. 
VHA officials has no assurances the caches would be ready to 
mobilize in the event of an emergency. Without improved 
oversight and accountability, the Emergency Cache Program 
continues to risk being improperly supplied and appropriated 
funds put at risk for waste.
    Madam Chairwoman, this concludes my statement, and I would 
be pleased to answer any questions you or other Members of the 
Subcommittee may have.

    [The prepared statement of Larry Reinkemeyer appears in the 
Appendix]

    Ms. Brownley. Thank you very much for your testimony, and I 
now recognize myself for 5 minutes.
    I think the first question that I wanted to ask--and 
anybody from the VA can answer it--is the Strategic National 
Stockpile has deployed for almost every national emergency 
since Hurricane Katrina. They can rarely respond in the, you 
know, two-day timeframe and it is my understanding that the 
VA's cache has never, since its inception, has never been 
deployed, when part of it mission, its fourth mission, is to 
fill that gap between an event and when the stockpiles arrival 
shows up at the disaster point.
    So, can somebody tell me why a cache has never been 
deployed since its inception?
    Mr. Ratchford. Thank you, Madam Chairwoman for that 
question.
    The mission of the VA All-Hazards Emergency Cache program 
is a little bit different than the SNS. The SNS is designed to 
deploy somewhere, whereas the AHEC, which is our cache, is 
designed to support the medical delivery system of the VAMC 
that it is assigned to, so it is pretty much static. One of the 
contributing factors to the VA not having to deploy the cache 
is that the number of supplies we keep on hand at the VA 
Medical Center.
    Referencing the San Juan Medical Center, for instance, in 
Puerto Rico during Hurricane Maria, we had on average, several 
weeks of medical supplies to include pharmaceuticals to support 
the operation there. In addition, we deployed mobile pharmacy 
assets to the island so that the cache would not be broken 
into, to support a more important mission that may come up 
later on down the line.
    Ms. Brownley. But isn't the purpose of the cache, in the 
case of Puerto Rico, to provide medical supplies immediately?
    Mr. Ratchford. If we exceed our operational load that we 
have at the medical center--
    Ms. Brownley. If you exceed what? I'm sorry.
    Mr. Ratchford. The operational load that each hospital has, 
the number of countermeasures they have on hand already, if it 
exceeded that, then, yes, the cache would be something that 
would be used to treat personnel.
    Ms. Brownley. So, are you saying that you didn't exceed it 
and, therefore, you didn't need to deploy the cache?
    Mr. Ratchford. Yes, ma'am, that is correct. Based on the 
supplies that we had on hand and that we moved to the island, 
there was no need to break into the cache.
    Ms. Brownley. Okay. It just--I understand each location is 
a different set of circumstances, but it is clear from the 
Inspector General's report that you used cache to supplement 
drugs that you don't have and so, you have used the cache in 
that capacity. You have never deployed, and I just can't 
imagine with, you know, given all of the disasters, 
particularly natural disasters since 9/11, there has been--
there has just been no deployment whatsoever.
    And, you know, it is clear within the Inspector General's 
report, as well, is that there is a lack--in my mind, there is 
a lack of accountability, you know, who ultimately is 
responsible, who makes the call. My understanding is that the 
medical director--in the case of Puerto Rico, the medical 
director of the hospital in that area would make the call one 
way or the other. Or if there was an earthquake in Los Angeles, 
the medical director in West LA, which is my area, is the 
person who makes that call. But it is, you know, in some cases, 
the medical director is not even requiring that there be drills 
to make sure that, you know, the inspections are conducted 
correctly so forth and so on.
    But the way it is currently set up--I just need a 
confirmation here--is that it is the medical director is the 
person who is responsible for the deployment of the cache?
    Mr. Ratchford. Yes, that is correct.
    Ms. Brownley. Okay. So, I guess we need all the medical 
directors across the country, we need to survey them.
    The Inspector General, can you comment on that at all? Did 
you survey, at all, medical directors in terms of their 
decision-making capacity?
    Mr. Reinkemeyer. We did not survey them to get an 
understanding of what goes into their decision-making capacity. 
But it was surprising to me as well, that the caches had never 
been deployed. We do know that the caches have been used, 
occasionally, where there have been shortages, outside of the 
emergency arena.
    But it is our understanding as well, that it has never been 
deployed, and it has never been denied to be deployed, either; 
in other words, a medical facility director never requested or 
tried to deploy it and was told no.
    Ms. Brownley. Thank you. My time is expired, so I yield 
back to, and, Dr. Dunn.
    Mr. Dunn. Thank you so much, Madam Chair.
    So, I went through this drill with the Army Medical Corps 
in the 80s and what we found was that it was a phenomenally 
expensive and wasteful way to try to forward place medications 
and supplies, that we were wasting a large--I think we have 
reinvented a problem and not a solution here.
    And with that in mind, I went back and read the original 
statute, as enacted in 2002, to see what it requires of the VA, 
and I will briefly quote from it. ``The Secretary of Veterans 
Affairs shall maintain a stockpile or stockpiles of drugs, 
vaccines, and other biological products, medical devices, and 
supplies to provide for the emergency health security of the 
United States.''
    Fast-forward to today's VA. The CMOP program, the 
Consolidated Mail Order Pharmacy program is now serving the 
entire country from just 7 locations. Eighty percent of all 
prescriptions are filled through the CMOP program in those 
locations.
    Additionally in 2007--that is 12 years ago--the Department 
of Veterans Affairs Emergency Pharmacy Service has begun 
maintaining a fleet of mobile pharmacy vehicles to assist 
veterans, VA staff, as well as civilians during emergencies. 
These mobile pharmacies are strategically positioned around the 
country and they are self-contained units who are just a few 
hours away from driving every place in the country. Standard 
equipment includes satellite dishes, generators, teleconference 
capabilities, faxes, VOIP protocol, two-way radios, laptops, 
prescription printers, and secured connectivity with the VA. 
They are manned by pharmacists and pharmacy technicians 
recruited from the--system.
    Currently, the VA is attempting to maintain 141 caches, not 
7--141--and, you know, that is a difficult thing to do. I am 
not castigating somebody for not being able to do that. I am 
merely pointing out that we have set ourselves a very, very 
difficult bar and it seems to be duplicative.
    It seems to me that the CMOP emergency programs actually do 
an admirable job of doing that. And with that in mind, I want 
to start this question, first to Dr. Kim: Given all these 
advancements and the progress that we have made since the first 
enactment of the law, is there really still a need for 141 
medication caches and the various--around our country?
    Dr. Kim. Thank you for that question. I do believe there is 
a need. As Mr. Ratchford had pointed out, the cache is designed 
for those events that we normally wouldn't have the 
pharmaceuticals available.
    One quick example, we recently had an exposure to Americium 
in the Buffalo, New York, area. We had those drugs available in 
a cache in Syracuse. It was a veteran and a non-veteran. We 
were able to mobilize--
    Mr. Dunn. What kind of drugs are we talking about?
    Dr. Kim. Chelating agents. The Americium was inhaled, so it 
was a pretty significant dose for both victims and we were able 
to deploy those chelating agents in order to treat those two 
individuals successfully. Those drugs would not normally be 
available.
    Mr. Dunn. So, I read the 38 drugs that are on the emergency 
list and I don't remember any chelating agents.
    Dr. Kim. I would like to defer to Dr. Steinwandt.
    Mr. Dunn. Please do.
    Dr. Steinwandt. Yes, sir. In that case, it was the calcium 
DTPA that was deployed for that incident.
    Mr. Dunn. Was that in an emergency cache or just in the 
hospital?
    Dr. Steinwandt. No, that was part of the emergency care, 
sir.
    Mr. Dunn. All right. Is it your impression that a few hours 
later, if that had come by these mobile CMOP, emergency trucks, 
that would have made a difference in life or death? I am 
putting you on the spot here. You aren't the doctor in the 
room, you know, I apologize for that. I withdraw that question.
    I have to tell you, you know, we are wasting $6.8 million a 
year in drugs. It is literally going out of date and if it is 
out of date, you can't resurrect it; although though, I see 
that you have an experimental program for extending shelf life. 
That just extends your liability. I mean, we all--medical 
liability being what it is, once a drug is expired, it is 
expired.
    So, I would urge you, very strongly to go back and re-look 
at this. And with the 16 seconds remaining to me, I also want 
to call attention to the fact that having these drugs in the 
caches, especially the controlled medications--and there were 
3, I believe, in the Schedule 2 drugs in the emergency caches--
exposes you to risk. And we talked about missing drugs. Is it 
possible that those were the missing drugs?
    I mean, this is a liability in anybody's hands, and I am 
well-familiar with having to control many, many controlled 
drugs. So, I would ask you to reconsider 141 medication caches 
at the expense that we are spending. And with that, I yield 
back.
    Ms. Brownley. Thank you, Dr. Dunn.
    Mr. Cisneros, you have 5 minutes.
    Mr. Cisneros. Thank you, Madam Chairwoman.
    Mr. Ratchford, I want to ask you about the inventories that 
are being conducted. So, the wall-to-wall inventory of the 
cache facilities, are they being done now on an annual basis?
    Mr. Ratchford. There were many things that the IG 
identified that we were not doing prior to the audit that we 
are absolutely doing now, and for that we, I would like to 
defer to Dr. Paul Kim.
    Dr. Kim. What we have done since the audit is, we have 
expanded the accountability. We now have 3 levels of 
accountability: My office, the Office of Emergency Management, 
the police and security folks, and the pharmacy individuals. 
So, what Dr. Steinwandt's team does is they do the wall-to-wall 
inventory and it is for all caches for that year.
    What we didn't have before was this accountability. It was 
primarily on the Office of Emergency Management and we ran into 
issues not being able to do the inspections, as needed.
    Now, with my colleagues' help, we are able to do those 
inspections. We have automated the system, and we feel pretty 
confident that we have solved that issue.
    Mr. Cisneros. So, when are the wall-to-wall inventories 
expected to be done?
    Dr. Kim. I would like to defer to Dr. Steinwandt.
    Dr. Steinwandt. Yes, sir. So, that was recognized early on 
when we took over the program. The first wall-to-wall was done 
before December 31st of 2018, and it will be done annually 
going forward.
    Mr. Cisneros. So, in 2018, we did 141 facilities, complete 
the inventory?
    Dr. Steinwandt. Yes, sir.
    Mr. Cisneros. Was it all documented?
    Dr. Steinwandt. Yes, sir.
    Mr. Cisneros. And so, then, coming here in the end of 
December 2019, all 141 facilities will complete that inventory 
again?
    Dr. Steinwandt. Absolutely.
    Mr. Cisneros. And is there now a documented paper trail? I 
guess that was one of the things that didn't happen before, 
that some of the facilities were saying that they conducted an 
inventory, but had no way of proving that.
    Dr. Steinwandt. Yes, sir. That is now documented 
electronically through a SharePoint site to where the pharmacy 
chief attests that this has taken place.
    Mr. Cisneros. Okay. And it goes up to the VA to whom? So, 
who has the ultimate responsibility for making sure that that 
is done?
    Dr. Steinwandt. So, I would like to go ahead and defer that 
to Dr. Mole.
    Dr. Mole. Thank you. So, we have begun our move towards the 
future state of how we are doing these inspections and audits. 
And so, the various members of the team complete their section 
of the audit, that then goes to the local medical center 
director to address any issues that were identified through the 
audit inspections and then it ultimately comes to me for 
approval through my office to say that they meet the standard.
    Mr. Cisneros. Okay. So, changing subjects now, I do have a 
question about the cache activation. You know, one of the 
things--I went and visited the VA hospital down there in Puerto 
Rico and they talked about what they did down there during 
Maria, but one of the things you kind of said that kind of 
makes me want to ask this question is, you know, when they were 
explaining the situation and when they were activating and what 
they were doing was not just for our veterans, but also for the 
surrounding community out there.
    And so, if we are having these natural disasters where--are 
the VAs being activated to go and assist the community outside 
of the veterans that they are serving, and if so, why haven't 
the caches been activated for that reason if they are serving a 
larger community than just the veterans that they would 
normally serve?
    Mr. Ratchford. Thank you for that question, sir.
    When you look at the various authorities that the VA has to 
respond to a crisis, it ranges based upon the situation going 
on. Under Title 38, Section 1784, the Secretary has the 
authority to provide humanitarian care to people impacted on a 
humanitarian basis. Under Section 1785 of the same title, the 
Secretary has the authority to provide medical care to anyone 
impacted by a natural disaster. So, based upon those 
parameters, care can be provided to the local populous.
    When you look at the normal stock--the normal stores that 
the VA maintains on hand at any given basis, we are not--
inventory management. We have a large supply of resources on 
hand that adds to our resilience and also enables us to operate 
for a very long period of time.
    Mr. Cisneros. So, during these disasters like Hurricane 
Maria and others, did the Secretary actually authorize 
activation to provide humanitarian aid?
    Mr. Ratchford. Activation of emergency support services?
    Mr. Cisneros. Yes.
    Mr. Ratchford. Yes, he did.
    Mr. Cisneros. And for natural disasters?
    Mr. Ratchford. Absolutely.
    Mr. Cisneros. Okay. I yield back my time.
    Ms. Brownley. Thank you, Mr. Cisneros.
    Mr. Meuser, you have 5 minutes.
    Mr. Meuser. Thank you, Madam Chair.
    Thank you all. Good to see you.
    So, my first question would be for Mr. Ratchford. Sir, were 
you surprised by the IG report? Was it revealing to you and 
surprising?
    Mr. Ratchford. Yes, it was surprising to me. Prior to the 
IG report, my organizations was not part of the actual cache 
management program. I believe everyone at the table was 
surprised by the results the audit because relatively everyone 
here is new in our positions, for a matter of speaking.
    Once we did recognize and were aware of the challenges 
identified in the IG audit, we wasted no time to come together 
as one organization and come up with a strategy to make this 
better, so it doesn't happen again.
    Mr. Meuser. Right. Were some of the problems, were they IT-
related? You know, it says here that there was a--within the 
report, there was a lack of authority to enforce the annual 
cache exercise requirement and monitor and compliance. Is that 
a piece that was surprising to you or was that one of the 
procedures that was causing the problem?
    Mr. Ratchford. I am not really sure if that was one of the 
procedures causing the problem. As I stated before, sir, once 
we realized what the problem was, we spent more time focusing 
on a solution, rather than--on a problem.
    Mr. Meuser. No, I understand that makes sense. I am just--
let me ask Mr. Reinkemeyer, you had stated that progress has 
been made. The recommendations were provided and listened to. 
Can you be specific on the progress made on the drug cache 
situation, as far as appropriate inventories being taken and as 
far as responsiveness for emergencies?
    Mr. Reinkemeyer. Right now all 7 recommendations we made 
remain open. I can tell you though, as I mentioned in my 
statement, on Friday they provided us a document requesting 
closure of 3 of the recommendations, to include, I think, the 
wall-to-wall inventories and several of those items.
    The team has not reviewed them. We will not close that 
recommendation until we are assured that the action has been 
implemented and that there is a plan in place. For example, we 
do see evidence that they conducted the wall-to-wall inventory, 
but we want to make sure it is a perpetual thing or a recurring 
thing, not just a one-time thing. So, we want to make sure that 
there is some document or some directive that establishes that 
requirement so that we have some assurance that it is going to 
occur in the future.
    Mr. Meuser. And Mr. Ratchford, really the same question, 
specifically, what progress have you made on those two 
categories, the drug cache as well as the emergency 
responsiveness?
    Mr. Ratchford. Based upon the drug cache, I would defer 
that question to Dr. Steinwandt, based upon he has the 
logistical team member that put all of this together for that.
    Dr. Steinwandt. Okay. Thank you very much.
    So, to that end, the Emergency Pharmacy Service, EPS, has 
provided the training for the pharmacy cache manager and 
pharmacy chief on how to conduct an annual wall-to-wall 
inventory, and as stated earlier, that has taken place in 2018 
and we are on target to get that finished in 2019, as well.
    We have also gone ahead and provided training to the 
pharmacy chiefs and the cache managers, concerning what to do 
with the excess, missing, or expired items. And we went ahead 
and provided that training and they went ahead and did as 
instructed, and attested back to us that they had completed 
either removing or notifying EPS of the fact that they had 
missing medications.
    Mr. Meuser. All right. Thank you.
    Has the circumstance where lacking the authority to enforce 
the annual cache exercise requirement and monitoring 
compliance, Mr. Reinkemeyer, has that been corrected at this 
point? Is the authority there.
    Mr. Reinkemeyer. I am not aware that it is.
    Mr. Meuser. All right. Mr. Ratchford?
    Mr. Ratchford. We have gone through a complete policy 
renovation and how the policy is and who can do what and the 
roles and responsibility of all Cache Program managers and 
support personnel. I will defer the specifics of that question 
to Dr. Larry Mole to talk specifically what the policy states.
    Dr. Mole. And if I could just ask for a clarification, 
what, in particular, sir?
    Mr. Meuser. Well, it seems to me that the IG report offered 
that one of the problems has been or lack of effectiveness and 
efficiency is that there is not enough authority for those on 
the ground to make the emergency decisions.
    Dr. Mole. So, I think in the policies that we had in place 
that were in place for almost a decade, actually had 
conflicting language, and it, to some extent, confused who the 
authoritative individual was, including things like the medical 
center director. Those are items that, as Mr. Ratchford 
mentioned, we have been working through all the policies to 
streamline it and make it very clear and concise about where 
those authorities reside.
    Mr. Meuser. Thank you. And I know I am over my time, but 
one last question: Are you continuing to work together or not 
just come together at extended intervals between the IG and the 
VA, Mr. Ratchford?
    Mr. Ratchford. Yes, we are.
    Mr. Meuser. All right. Okay. Great.
    I yield back, Ms. Chairwoman. Thank you.
    Ms. Brownley. Thank you, Mr. Meuser.
    I will follow up and give myself another 5 minutes to 
follow up on some questions. So, in the event of an emergency, 
the medical director makes the decision to deploy a cache. 
There is this big emergency going on--I am going to use the 
hypothetical of an earthquake in Los Angeles--big emergency 
coming on. There are, you know, the City of Los Angeles, the 
County of Los Angeles, there is FEMA, there is Fire, there is, 
you know, all kinds of agencies involved.
    And so, a medical director, although probably that cache is 
because the medical facility isn't necessarily been built to 
survive a big earthquake, it might not even be accessible, but 
in this scenario that I am building, then the medical director 
in his or her isolation decides whether to deploy this. Is 
there any coordination? Do these agencies know that a cache 
exists? That this is a place that can look to?
    I mean, how--in my district, we have had two of the biggest 
fires in California over the last 15 months and, you know, 
there are a gazillion agencies both, at the local, state, and 
Federal level who are addressing this issue, and they know what 
the drill is. They know how they are going to team up and 
coordinate to provide, you know, the best resources and the 
best results.
    Is there any integration to this program with the rest of 
the community and how does that work?
    Mr. Ratchford. Thank you for that question.
    As you know, VA has both, a Federal and a local presence of 
being part of the community. So, we constantly work with the 
community to make sure that we have plans to--as the community, 
first, because all disasters are local.
    When you think about the All-Hazards Cache Program, you 
have to keep in mind to why it was created. And its primary 
purpose was to bridge the gap between an event happens and the 
SNS arrival to that location, we can ensure a high-level 
continuity of care to the veterans that is resident at a local 
VAMC, that is been impacted by a disaster.
    To speak a little bit more importantly on how VHA emergency 
medical teams tie into community and maybe even provide support 
through the cache and other programs that we have at the 
medical centers, I would like to defer to Dr. Paul Kim.
    Dr. Kim. Thank you, Lewis, for the question.
    I have staff deployed across the country. I have area 
emergency managers and regional emergency managers that are in 
just about every medical center across the country. And their 
primary role in emergency management is coordination and 
liaising with the community, and that means the local, state, 
and county emergency managers.
    So, if there is a disaster, as you described, our emergency 
managers would be not only in the emergency operation center of 
that county, state, or local, but they would be actively 
planning and telling those folks what VA can do, what we can 
bring to the table, and making sure that we are aware, and it 
goes up to the secretary. And, invariably, he says, Let's do 
it, let's get there, and let's help.
    Ms. Brownley. Yeah, it seems to me that in reality, what is 
happening, since historically the cache has never been 
deployed, that in a disaster like that, you go straight to the 
secretary and you start to deploy what you can deploy in the 
area. I don't know if you have a grand plan for that separate 
from, you know, the cache plan--perhaps you do--but it sounds 
like--I mean, I, personally, I don't want to be too critical 
here, but I, personally, would feel it would be irresponsible 
for you to tell a local community that we had a cache that you 
know is not up to par and is not crisis ready, and so, 
therefore, you are going to go someplace else to find out where 
the VA can help.
    And I understand with Hurricane Maria, there was a, you 
know, very noble response that the VA made, but it had nothing 
to do with the Cache Program whatsoever. And so, it is just--
you know, it is set up for a purpose. It is set up because we 
have facilities in the areas and they should be ready to 
respond in a very fast, quick way, which in many cases, will 
save lives, and yet, we are just kind of, Well, we aren't doing 
drills, we are not doing inspections, we are not even sure what 
the medical supplies are, we don't reassess on an annual basis 
to see if we need oxygen or other kinds of things that we might 
need in a particular type of disaster that we are experiencing, 
whether it is hurricanes or fires. It just doesn't seem like 
there is any real attention to this issue, which I find--I am 
sorry--but I find to be extraordinarily frustrating when, 
particularly, a community or an island like Puerto Rico is 
really depending on every single possible resource that we can 
supply them.
    So, I will yield to Dr. Dunn.
    Mr. Dunn. Thank you. Let me start by saying, I think this 
is a duplicative program. We have the VA emergency pharmacy 
program, so I am just going to frame it that way.
    You talked about deploying a cache with a chelating agent 
in Syracuse, and did I hear you right, did you say DTPA or is 
it potassium iodide? Who said that? Who gave--I think it was 
you, Dr. Kim, that gave the example of a chelating agent being 
used in Syracuse, New York, out of the cache?
    Dr. Kim. Yes, sir, that was me. And the issue was--
    Mr. Dunn. Wait, what was the chelating agent?
    Dr. Kim. Steve?
    Dr. Steinwandt. So, the medication that was deployed in 
that incident was the calcium DTPA.
    Mr. Dunn. Oh, calcium iodide or potassium iodide, right? 
That is the normal chelating--I mean this, is for--so, normally 
you are treating radiation poisoning, right?
    Dr. Steinwandt. Correct.
    Mr. Dunn. What else would you use decides potassium iodide 
for radiation poisoning?
    Dr. Steinwandt. I would have to get back with you on that, 
sir.
    Mr. Dunn. All right. But you deployed a cache but then we 
read that no caches have ever been deployed. But somebody 
dipped into a cache; it wasn't deployed.
    That is confusing to Members of Congress. It is confusing 
to doctors, as well, by the way.
    I would also say that that chelating agent had to be 
available at every hospital in the city. We all have it. 
Everybody has it for--if you do isotope testing, you know, you 
have got potassium iodide somewhere in your pharmacy.
    So, that cache, it was nice that it had it there. It is 
appropriate that it is there if you are going to treat 
radiation poisoning, but I don't believe that that was the only 
source of potassium iodide in Northern New York State. And I 
wonder if a 6.8--well, actually a forty-four million-dollar a 
year program is worth two doses of chelating agent.
    General Reinkemeyer, you are the Inspector General, right?
    Mr. Reinkemeyer. I am not. I am the Assistant Inspector 
General.
    Mr. Dunn. Oh, you aren't? I'm sorry. Please go on.
    Mr. Reinkemeyer. I am the Assistant Inspector General. Mr. 
Mike Missal is the Inspector General.
    Mr. Dunn. So, I mean, do you make value-based judgments on 
programs--well, so this program, you know, it saves a life 
every now and then, but it is $44 million a year and we think 
that we could also save that life in a downtown hospital or by 
sending for the trucks.
    Mr. Reinkemeyer. So, we will certainly look at the cost and 
benefit of programs.
    Mr. Dunn. Okay. Cost-benefit ratio, exactly.
    And this is a hugely expensive program that hasn't really--
you know, it is only been dipped into sort of, not 
strategically, but tactically over the years. And I think, 
again, let me say, you have this program, you have a much more 
thorough backup program and you have it all over the country, 
although, as I looked at the 7 locations, none of them was 
Puerto Rico--maybe you could add an eighth location or 
something like that. So, that is a good example of an isolated 
area where you aren't going to get down to in an hour or two.
    I would say that the chelating agent example was not a 
mass--it was an example of a shortage of medication someplace 
that the VA made up for. Hurrah, I mean, I have been saved like 
that. My patients have been saved like that over the years, 
too, one by one, but it is not a mass--and it is not part of 
the system, not part of Section 121 of the Strategic National 
Stockpile that was passed by Congress.
    And I would say, also, that it is much easier to maintain 
and control a system like the CMOP system where you have 
pharmacists who work with it every day. That is what they do. 
They count drugs. They account for drugs. They make sure they 
are controlled drugs.
    And, finally, I guess I want to get to the question about 
the potential for controlled medications hitting the streets. 
We have controlled medications in these caches. We see that 
drugs are missing. Inspector General, can you assure me that 
none of the missing drugs were controlled substances?
    Mr. Reinkemeyer. Yes.
    Mr. Dunn. Okay. That would have been good to have in the 
report. I have been tossing and turning over that all night.
    Mr. Reinkemeyer. And, let me add to that. The missing drugs 
were missing from--the records did not reconcile with the on-
hand quantities. We did additional legwork and found that a lot 
of times, the records--it was really just a poor record--
    Mr. Dunn. Poor recordkeeping. Usually when we find poor 
recordkeeping around morphine and Valium and temazepam, there 
is a reason. You know, that just happens in hospitals and 
clinics; that is why we have such controls in place for 
compliance.
    I am going to echo Chairwoman Brownley's concern with the 
program, but I am also going to say that it looks like you have 
another program that works, and I would encourage you to think 
about falling back on that program and using it more robustly.
    And with that, I yield back, Madam Chair.
    Ms. Brownley. Thank you, Dr. Dunn.
    I just have a few more questions. I want to say that you 
are getting off sort of easy today because we had to change the 
timing of the Committee which has messed up everybody's 
schedule, so lots of Members are not here, but I can assure you 
that every single Committee Member here is very concerned about 
this issue and has a keen eye on it.
    But I just have to get this off my chest, and that is in 
your opening comments, you said that you are going to respond 
to all of the recommendations that the IG made, that you had 
gotten an update last Friday on how you were going to do that, 
and you are reviewing that this week, is what you said in your 
opening statement.
    So, this is where my frustration lies. You know, we have a 
Committee hearing to ask you about, you know, this particular 
mission, the fourth mission of the VA, which you have had some 
kind of report and update in terms of how you were going to 
improve upon it, but yet, you can't share any of that. I mean, 
you have had Monday, Tuesday, and Wednesday, and I am not 
expecting to have, you know, a 25-page report and an entire 
program ironed out--I get that; that takes time--but it seems 
like you should be able to respond in some sense about how you 
are going about, you know, addressing and responding. You could 
give us some sense of certainty that, you know, that you are 
working on this, that you have got your arms around all of 
these issues.
    It just seems to me that you would be able to do that. So, 
I am just getting that off my chest. You know, I don't want to 
come to the conclusion that you said that because you don't 
want to report to us about it, but I can assure you that we are 
going to be following up on that, too, because it is our 
responsibility to make sure that any program, and particularly 
a program that is set up and designed to save lives in an 
emergency is up to snuff, that we are ready.
    And so, it is very important to us and we will be making 
sure that the VA is in a place to be responsive. So, if you 
have any comments towards my comment, I would be happy to hear 
them. No comment? Okay.
    So, the last couple of questions, on the emergency refill 
program where in an emergency situation, a veteran can go to a 
local pharmacy to get their prescriptions filled, is that--do 
we have a common understanding of that?
    Mr. Ratchford. Yes, ma'am, that is correct.
    Ms. Brownley. Okay. So, was this done during Hurricane 
Sandy, Irene, and was this program utilized during Hurricane 
Maria at all?
    Mr. Ratchford. Thank you for the question, again, Madam. As 
far as my tenure here with the VA, I can confirm that the 
program was used during Hurricane Maria.
    As far as Hurricane Sandy and Irene, I would like to defer 
to Dr. Paul Kim to respond to that portion of it.
    Dr. Kim. We have activated the Heritage contract for all of 
the responses that I have been involved in, over the last 
several years, to include the wildfires in California and other 
flooding and disasters that we have been involved in where the 
veterans could not get to the medical center or the mail 
delivery system was interrupted. So, they could go to their 
local pharmacy and get what they needed.
    Ms. Brownley. Okay. And was this an option for veterans 
during flooding in the Midwest this spring and, you know, who 
is responsible for establishing these relationships with 
facilities and raising awareness among veterans that can do 
this? How do you educate veterans?
    Dr. Kim. Yes, ma'am. It is up to the local medical center 
and they do a very active advertising campaign, if that is the 
right term, to let veterans know that that is available, and 
they work directly with the community pharmacies.
    Ms. Brownley. Okay. So, in my district where we had two 
fires, we don't have a medical center, so there wouldn't be 
anybody to tell us about that, so who would, in lieu of not 
having a medical center?
    Dr. Kim. I can take that back and we will make sure that 
that gets done.
    Ms. Brownley. Okay. Last question and then we can adjourn, 
unless Dr. Dunn, you have some more questions, but the VA 
report made it very, very clear that we had--you had--the VA 
had one person who was responsible for properly supplying VA 
for all of its drugs in every single center across the country 
in a timely manner. One person was responsible for that.
    So, it is my understanding, as I said in my opening 
remarks, that that person is no longer with the VA. Can 
somebody nod their head to say if I have that assumption 
correct? Okay. So, this person is no longer there, and the 
responsibilities have been shifted to the Consolidated Mail 
Outpatient Pharmacy; is that correct?
    So, now, given that transfer, what assurances can you give 
this Committee that this change ensures that the caches will be 
stocked properly and, in a mission,-ready status?
    Mr. Ratchford. Thank you, again, for that question, Madam 
Chairwoman.
    It is always bad to have a single point of failure and that 
is one of the things we recognized as we received the report 
and we reviewed it. For that question answer, specifically, I 
would like to defer to Dr. Steinwandt to give more specifics as 
to how we have improved thank you through the CMOP process.
    Dr. Steinwandt. So, since we took the Emergency Pharmacy 
Service underneath the wing of the CMOP program, at the Heinz 
facility itself, I have got logistics experts that are there 
on-site that can go ahead and spearhead to make sure that we 
get the drugs ordered in a timely fashion.
    We also have a national CMOP logistics program, so if we 
run through any difficulties or if we need any assistance, they 
will be able to provide that assistance with us, as well.
    Ms. Brownley. Okay. And it is my understanding, too, the IG 
was just pointing out that when they did their audits, in terms 
of the accounting of the drugs, you know, the paperwork didn't 
add up to what was physically on the site. And so, you know, 
how are you keeping care of that inventory database?
    Dr. Steinwandt. So, with the inventory database, a couple 
of problems that we were having, number one was--is that there 
was assumptions by the individual that was putting the data in 
there that we would be seeing, for instance, the shelf life 
extension program, we would be seeing the data back within a 
certain timeframe and they would actually put in that projected 
timeframe as an expiration date, which, of course, is not 
correct. The other issue was that we were not having an open 
book to the field. We were not showing them, at the time, what 
their master inventory list looked like.
    So, what we have done is we have created a folder for each 
site that they can access securely for their site, and every 
day it is uploaded with the master file for them to go ahead 
and bounce against to make sure that what we say that they have 
at their site is actually what they can confirm for.
    Ms. Brownley. So, do you have confidence now in the 
process, in the system?
    Dr. Steinwandt. Yes, ma'am.
    Ms. Brownley. All right. Well, I will stop here.
    Dr. Dunn, if you have any more questions?
    Mr. Dunn. I just want to thank the chairwoman for calling 
this hearing. Left to my own devices, I might not have ever 
wandered into this particular subject.
    But I hope this gives the VA reasons to go back and reflect 
on the concerns that you have today from the Members of 
Congress who are concerned about this, and also, perhaps, to 
reflect on the system and whether or not it is actually needed 
with your CMOP system. I think you could save us all a lot of 
money and save yourself a lot of work and embarrassment by 
simplifying the program a little bit.
    But that is just my thought, and thank you very much, Madam 
Chair.
    Ms. Brownley. Thank you, Dr. Dunn.
    And I want to thank all of you for joining us today and 
being here. I know I have expressed some frustration. I really 
do want to be a partner. This is a very important program and 
mission for the VA, but as I said before, this Committee will 
be very diligent in terms of our oversight to make sure that 
this program gets--you know, I don't know what grade we would 
give it, but we need to be--you know, there is great 
improvement that needs to be done; let me frame it that way. 
And we will be following your progress.
    And with that, all Members will have 5 legislative days to 
revise and extend their remarks and include extraneous 
material, and, without objection, the Subcommittee stands 
adjourned.

    [Whereupon, at 11:51 a.m., the Subcommittee was adjourned.]




                            A P P E N D I X

                              ----------                              

                 Prepared Statement of Lewis Ratchford
    Good morning Chairwoman Brownley, Ranking Member Dunn, and Members 
of the Subcommittee. Thank you for the opportunity to discuss the VA 
Emergency Response and All Hazards Emergency Cache (AHEC) program. I am 
accompanied today by my colleagues from the Veterans Health 
Administration (VHA): Dr. Larry Mole, the Chief Consultant for 
Population Health Services; Dr. Steve Steinwandt, the Hines 
Consolidated Mail Outpatient Pharmacy Director and Emergency Pharmacy 
Director; and Dr. Paul Kim, Director of VHA Office of Emergency 
Management.

Introduction

    In response to the terror attacks of 9/11, the United States (U.S.) 
Government took on a herculean task to overhaul homeland security 
efforts across all sectors of Government. On November 7, 2002, the VA 
Emergency Preparedness Act of 2002 (Public Law 107-287) became law and 
began the transformation of VA's preparedness mission. This Act not 
only enhanced VA's role as part of the Federal response effort aimed at 
preventing events like 9/11 and the anthrax attacks of 2001, it also 
served as a catalyst for VA to develop resilient capabilities that 
would support continuous delivery of services to Veterans in an all 
hazards environment.
    Simultaneously, the Department of Health and Human Services (HHS) 
was in the process of implementing the Public Health and Bioterrorism 
Preparedness and Response Act of 2002, which enhanced the viability and 
capability of the Nation's Strategic National Stockpile (SNS) designed 
to aid in mitigating the consequences of a Chemical, Biological, 
Nuclear, or Radiological (CBRN) event or other public health emergency 
within the U.S. To complement these efforts, VA, on its own, 
established the All Hazards Emergency Cache (AHEC) program to bridge 
the gap until the SNS is operational in the local area impacted by a 
CBRN event or public health emergency. This capability was primarily 
designed to preserve VA's health care delivery infrastructure to ensure 
the continued delivery of services to our Nation's Veterans under the 
care of their local VA Medical Center (VAMC). AHEC included Medical 
Countermeasures that were either not stocked in the local VA pharmacy's 
inventory or quantities that would augment what was on hand to enable a 
rapid response to a public health emergency or CBRN event.
    Today, the mission of the AHEC program remains the same as when it 
was created. And as a direct result of the VA Office of the Inspector 
General (OIG) audit dated October 31, 2018, VA continues to implement 
improvements to increase and ensure the readiness of AHEC to support 
consequence management operations and ensure the continued delivery of 
services to our Nation's Veterans.

VA Mission Readiness

    The establishment of the AHEC program was just the beginning of the 
evolution of VA's mission readiness and assurance programs.
    One of VA's proudest moments occurred during the 2017 Hurricane 
response season was when the Department was identified as a major 
contributor to the overall Federal response while sustaining local VA 
operations. As a testimony to VA's preparedness and emergency response 
capabilities, the San Juan VAMC was the only hospital that remained 
operational throughout the response phase of Hurricane Maria and served 
as the initial base of operations for several Federal response 
entities. In partnership with HHS, the Department of Defense, and the 
Federal Emergency Management Agency, VA evacuated 423 personnel from 
the Caribbean; cared for over 6,500 personnel at the Manati Federal 
Medical Station; and provided emergency dialysis support to 76 non-
Veteran personnel. To ensure a successful response to Hurricane Maria, 
VA transported 128 short tons of critical resources and response 
equipment to Puerto Rico and deployed 1,039 personnel to support both 
VA and Federal mission needs. In addition, VA deployed mobile canteen 
services that provided over 100,000 at-cost meals to disaster survivors 
and Mobile Vet Centers that provided readjustment counseling services 
to over 4,500 disaster survivors.
    In response to Hurricanes Florence and Michael in 2018, VA again 
demonstrated its agility to rapidly respond to crisis by establishing 
Veteran support sites that were one-stop shops for Veteran disaster 
survivors to receive nutritional, mental health, pharmaceuticals, 
medical care, and other services to aide in their recovery. The ability 
to respond with the breadth and depth of capabilities identified above 
does not happen by accident. This type of response capability is only 
achievable by having dedicated personnel and long-term investment 
strategies in response systems that are designed to support day-to-day 
operations, and during crisis, decisively equip response personnel with 
the resources necessary to manage the consequences associated with a 
disaster.

OIG Report on the Emergency Cache Program

    VA appreciates the OIG review as it has led to strengthening VA's 
AHEC program. Since the publication of the report, VA has implemented 
improvements to the inventory management and internal controls for the 
All Hazard Emergency Cache program. In response to the OIG 
recommendations, VA's Emergency Pharmacy Service (EPS) conducted 
training and aided medical facilities with their first annual wall-to-
wall inventory of all cache drugs and supplies. The training provides 
the foundation for a reliable, efficient, and accurate cache formulary 
management process. Based on the training, all sites conducted the 
first enterprise-wide inventory of every facility AHEC. Because of the 
recent inspections, the individual cache inventories have been 
reconciled with the master inventory file. Cache sites now receive 
updated inventory sheets for use during wall-to-wall inventories. 
Additionally, the agency has developed a SharePoint file folder system 
for each site in which the existing master inventory file as entered in 
the software system is sent daily to the folder. Access to the folder 
is site specific.
    Additionally, EPS developed processes to re-label all expired or 
excess inventory of drugs that are purposefully maintained to respond 
to drug shortages or for potential Shelf Life Extension program (SLEP) 
testing, and to remove and rectify cases of other expired, missing, or 
excess inventory of drugs. The Department of Defense administers SLEP, 
a program through which the Food and Drug Administration conducts 
periodic stability testing of certain drug products to extend the 
expiration date of such products to help defer their replacement costs 
in critical Federal stockpiles, with the goal of helping to ensure 
public health preparedness for U.S. military and civilian populations. 
VHA is coordinating a comprehensive policy that will modernize 
processes, clearly assign responsibilities among the many program 
offices with emergency management responsibilities and set requirements 
that ensure the AHEC program is always mission ready.
    VHA provided training on the processes to ensure that expired, 
excess, incorrect, or missing items discovered during any inventory 
activity are handled appropriately. Sites were required to remove all 
expired, excess, and incorrect items from the caches and certify 
removal. Any items identified as missing are being replaced at affected 
sites. EPS has sent signage for any items that are expired but 
purposefully kept in the AHEC because the item is either being tested 
for SLEP or on national backorder without the availability of a 
suitable substitute. Sites have certified that signage is appropriately 
affixed to the expired items. All these requirements will be reviewed 
by the VHA Office of Emergency Management personnel during their cache 
inspections.
    VHA has assessed the continued use of SLEP in conjunction with 
stock rotation and returns to a contracted vendor for appropriate 
disposition from a combined perspective of cost savings and patient 
safety. The justification to use SLEP varies by Federal agency. VHA 
participates in SLEP using pharmaceuticals with the following 
characteristics:

    1. Little use in routine care of Veterans;
    2. Limited availability from manufacturer; and
    3. Excessive replacement cost (>$500,000)

    Importantly, all three characteristics must be considered for a 
given drug since one may outweigh (or minimize) another. For example, 
an expensive product may not be appropriate for SLEP if the volume 
normally used by VHA is large enough to permit cost-effective, stock 
rotation. Using this model, VHA determined that 12 pharmaceuticals 
should remain in SLEP; 6 for cost versus stock rotation; and 6 others 
with no clinical use in VHA. There are 13 additional pharmaceuticals 
that would not qualify for SLEP, most falling under a stock rotation 
program. SLEP- extended pharmaceuticals should not be used in routine 
patient care settings. VHA policy will be updated to reflect the 
appropriate use of SLEP.
    The agency conducted a comprehensive assessment and feasibility 
analysis of drugs that can be readily used in a medical facility 
operation. EPS, with the oversight of the AHEC Committee, developed 
criteria for each medication based on the usage patterns of the VA 
medical facilities, the ability of a medication to be successful in the 
SLEP program; the availability of the medication through the 
manufacturers; and replacement cost of the medication. The AHEC 
Committee approved the assessment and feasibility analysis.
    A comprehensive review of VHA Directives 1047(1) All-Hazards 
Emergency Cache Program and 0320.10 Inspection of VA All-Hazards 
Emergency Caches by the VHA Office of Emergency Management is underway 
which includes an assessment of roles and responsibilities for VHA 
Central Office program offices and Veterans Integrated Services 
Networks and field leadership. In December 2018, there was an 
organizational realignment of 6 program offices in VHA Patient Care 
Services including Public Health. This realignment was part of VHA 
Modernization and brought together program offices with similar 
functions and activities. An Integrated Program Team has been meeting 
since July 2018 to create the new vision, mission, strategy, and goals 
for a re-envisioned national Population Health program. One of the 
eight focus areas of this new program is emergency management. As the 
VHA Directives mentioned above are revised, responsibilities related to 
emergency management and Population Health will include clarifying the 
roles and responsibilities in the AHEC.

Conclusion

    We appreciate this opportunity to share our efforts to strengthen 
VA's preparedness to respond to public health or CBRN emergencies and 
our continued commitment to develop resilient capabilities to respond 
to crisis. Our objective is to give our Nation's Veterans the top-
quality care they have earned and deserve, even in an all hazards 
environment.
    Chairwoman Brownley, we appreciate this Subcommittee's continued 
support and encouragement in identifying and resolving challenges as we 
find new ways to care for Veterans. This concludes my testimony. My 
colleagues and I are prepared to respond to any questions you may have.

                                 
                Prepared Statement of Larry Reinkemeyer
    Chairwoman Brownley, Ranking Member Dunn, and members of the 
Subcommittee, thank you for the opportunity to discuss the Office of 
the Inspector General's (OIG's) oversight of the Department of Veterans 
Affairs' (VA's) Emergency Cache Program. The emergency cache is a 
critical component of VA's preparedness to ensure that medication and 
supplies are available in the event of a disaster-whether natural or 
the result of acts of violence.
    The OIG is committed to serving veterans and the public by 
conducting oversight of VA programs and operations through independent 
audits, inspections, reviews, and investigations. The importance of 
that mission is particularly compelling during times of crisis when the 
provision of continuous health care services to veterans and others is 
vital. In October 2018, the OIG published a report, the Emergency Cache 
Program: Ineffective Management Impairs Mission Readiness.\1\ The 
report examines whether the Veterans Health Administration (VHA) 
effectively managed its emergency drug and medical supply caches to 
ensure their readiness. The OIG audit team identified several 
deficiencies such as expired or missing drugs, excess drugs, failures 
to conduct mandatory annual inspections and activation exercises, 
missed opportunities to use soon-to-expire emergency cache drugs, and 
the lack of efficient program oversight. These deficiencies, if not 
corrected, may not only compromise VA's ability to mobilize in the 
event of an emergency but could also result in missed opportunities to 
leverage soon-to-expire (but still usable) drugs and medical supplies.
---------------------------------------------------------------------------
    \1\ Emergency Cache Program: Ineffective Management Impairs Mission 
Readiness, October 31, 2018.

---------------------------------------------------------------------------
BACKGROUND

    Established following the 9/11 attacks, the Emergency Cache Program 
is part of VA's national emergency preparedness efforts to make drugs 
and medical supplies available to treat veterans, VA employees, and 
civilians in the immediate aftermath of a terrorist attack, or 
biological or natural disaster.\2\ Each cache is designed to bridge the 
gap between a medical facility's on-hand supplies and federal relief 
provided by the Department of Health and Human Services' Centers for 
Disease Control and Prevention's Strategic National Stockpile. Federal 
supplies can take one to two days, if not longer, to reach the site of 
a catastrophic event. Because mass casualty events can occur anytime, 
anywhere, and with little or no warning, the Emergency Cache Program 
must be ready for immediate deployment. While at the time of the audit 
none of the caches had been activated in response to a disaster, 
medical facilities have used cache drugs in response to local or 
national shortages when other options to obtain the drug have been 
exhausted and patients are in life-threatening situations.
---------------------------------------------------------------------------
    \2\ VHA Directive 2002-026, Pharmaceutical Caches in a Weapons of 
Mass Destruction Event, May 13, 2002; Public Law 107-188, Public Health 
Security and Bioterrorism Preparedness and Response Act of 2002, June 
12, 2002; VHA Directive 1047(1), All-Hazards Emergency Caches, December 
30, 2014; VHA Directive 0320.10, Inspection of VA All-Hazard Emergency 
Caches by the VHA Office of Emergency Management, July 26, 2017 (VHA 
Directive 0320.10).
---------------------------------------------------------------------------
    As of January 2018, there were emergency caches at 141 VA medical 
facilities, with a standard supply of 38 drugs (three are controlled 
substances) and 44 medical supplies, collectively worth about $44 
million. One of the caches in each Veterans Integrated Service Network 
also carries two drugs to treat medical needs arising from a nuclear 
disaster. Ninety-one caches are large, designed to treat 2,000 people, 
while 50 are small, designed to treat 1,000 people.
    Three VHA program offices as well as the directors of medical 
facilities with caches share oversight responsibilities:

    1. The Pharmacy Benefit Management's Emergency Pharmacy Service 
(EPS) maintains a centralized national inventory database to track 
drugs and supplies. EPS orders and distributes cache supplies to each 
cache location.
    2. The Office of Emergency Management (OEM) oversees required 
annual cache inspections and reports on the functional and operational 
status of emergency caches.
    3. The Office of Public Health leads the cache committees that 
update policies and directives.
    4. Medical facility directors make sure annual cache activation 
exercises occur, decide when to activate the cache, and ensure the 
cache manager is administering the inventory.

    VHA policy describes the storage requirements for the caches, which 
includes secure environments. The drugs and supplies are required to be 
stored in numbered, locked rolling carts. EPS uses the national 
inventory database to track each cache's supplies, drug types, 
quantities, lot numbers, and expiration dates. EPS is also responsible 
for ordering drugs and supplies to replace expiring cache inventory. 
According to EPS officials, most emergency cache drugs are subject to a 
seven-month replacement process, detailed in figure 1.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    VHA participates in the Food and Drug Administration's (FDA's) 
Shelf Life Extension Program (SLEP), which is used by government 
agencies to extend the period of use of designated drugs. FDA tests 
drugs for stability and extends the expiration dates for drugs that 
pass this testing. SLEP drugs are primarily nonbiological prescription 
drugs. Current SLEP testing focuses on drugs that have limited 
commercial use (such as nerve agent antidotes) and drugs purchased in 
very large quantities (such as the antibiotics ciprofloxacin and 
doxycycline). At the time of the OIG audit, 17 of VHA's cache drugs 
were included in the SLEP, including Tamiflu, and EPS staff claimed 
that SLEP saved VA about $20 million annually.

INEFFECTIVE MANAGEMENT IMPAIRED THE MISSION READINESS OF VA'S EMERGENCY 
    CACHE PROGRAM

    Because the mission of the Emergency Cache Program is critical to 
veterans and for the public health, the OIG decided to proactively 
assess VHA's management of this program. In 2018, OIG staff conducted 
visits to 26 randomly selected cache locations to determine if VHA 
ensures caches are ready to mobilize in the event of a disaster or 
terrorist attack.\3\ The OIG's examination of the same 25 drugs at each 
site, for a total of 650 drug inspections, yielded seven key 
findings:\4\
---------------------------------------------------------------------------
    \3\ Given the sensitive nature of the Emergency Cache Program 
contents and locations, to protect the disclosure of information that 
could adversely compromise the physical security of the caches, the OIG 
did not identify which medical facilities it visited in its report.
    \4\ The audit team selected a sample-in consultation with an OIG 
statistician-of 25 of the 38 drugs stored at each emergency cache. The 
team inventoried the same sample of 25 drugs at each inspected cache 
location. This sample consisted of the five drugs with the highest 
time-of-purchase price, and a random sample of 20 other drugs. A total 
of 650 drugs were inspected-25 drugs at 26 caches.

    1. All 26 inspected caches had expired drugs.
    2. Twelve inspected caches were not fully stocked.
    3. Eight inspected caches had excess quantities of cache drugs.
    4. OEM did not always conduct the required annual inspections.
    5. Medical facility directors did not always conduct the required 
activation exercises.
    6. Medical facilities missed opportunities to use soon-to-expire 
cache drugs.
    7. Lack of effective governance resulted in inefficient program 
oversight.

Expired Drugs Found in All 26 Inspected Caches

    In almost all the cases of expired drugs, EPS failed to ship 
replacement drugs to caches before their current stock of drugs 
expired. Of the 650 drugs that the OIG inspected across the caches, 178 
(27 percent) were expired. All 26 inspected caches had at least four 
expired drugs, while half had six or seven expired drugs, and four 
caches had 10 or more expired drugs. At the time of the OIG 
inspections, over a third of the expired drugs had been expired for 
three months or longer, at least 22 drugs had been expired for six 
months or longer, and three drugs had been expired for over a year.
    The EPS Inventory Management Specialist, responsible for ensuring 
cache inventory is properly stocked and unexpired, agreed with the 
OIG's inspection results, but he deflected his responsibility as the 
cause for the expired drugs. He claimed the caches contained expired 
drugs not because EPS did not ship the drugs in time, but rather 
because inexperienced cache managers did not rotate unexpired drugs 
into the caches to replace the expired drugs. The OIG determined this 
was not persuasive because inventory to replace the expired drugs was 
rarely available on-site during the audit team's inspections.
    Ninety-five of the 178 expired drugs identified by the OIG were in 
the SLEP. However, the OIG found that SLEP participation poses 
significant risks to the Emergency Cache Program for two reasons. 
First, for expired drugs undergoing SLEP testing, EPS inputs in its 
national inventory database the date it expects the drug to pass 
testing as the drug's expiration date, instead of the actual date the 
drug expired. As a result, EPS's national inventory database does not 
accurately reflect the proportion of, and which cache drugs, are 
expired at any point in time. Second, while it used to take the FDA 90 
days to complete a testing cycle, at the time of the audit, the FDA 
reported there could be up to a six-month wait for testing. Therefore, 
emergency cache drugs in SLEP testing are typically already expired by 
the time the FDA conducts its testing, and thus VA cannot use them 
while waiting for the results. While VHA could ask the FDA for 
permission to use these drugs in case of an emergency, this FDA 
approval could take time, and FDA officials noted that VHA pharmacists 
using expired SLEP drugs could risk their license.
    The OIG estimates that about 6.1 million units of drugs were 
expired across all 141 caches representing about $4.6 million in May 
2018 values. The report concluded that this is a gross waste of funds 
and space for a program that is vital to the treatment and care of 
veterans, VA employees, and civilians in the immediate aftermath of a 
local mass casualty event.

Some Caches Were Not Fully Stocked, While Others Had Excess Drugs

    Twelve of the 26 caches the OIG visited were not fully stocked. 
Specifically, 16 of the 650 drugs the team inspected had varying 
quantities missing, of which cache managers were aware of nine 
instances prior to the OIG's visits. OIG staff were given explanations, 
such as samples of drugs being in SLEP testing, drugs being destroyed 
because they were unsafe for human consumption, and replacement drugs 
never having been shipped.
    The audit team also identified 16 excess drugs at eight of the 26 
visited cache locations. Drugs were counted as excess if a cache site 
had both a current lot and replacement lot on-site in its carts, or if 
there were additional quantities of drugs on-site beyond what would be 
in a typical small or large cache. In all instances, the presence of 
excess drugs was attributable to cache managers who failed to remove 
expired drugs from their cache after new replacement drugs were rotated 
into the cache. This practice also created the risk that old, expired 
drugs could be used during an emergency since both expired and 
nonexpired drugs were in the cache carts.
    On-site cache managers faced a significant hurdle in accounting for 
their stocks. The EPS Inventory Management Specialist was not updating 
the national inventory database consistently, and the cache managers do 
not have access to EPS's national inventory database. Furthermore, 
there is no requirement for medical facilities to perform regular wall-
to-wall cache inventories. Without access to EPS's national inventory 
database, cache managers have no assurance that their caches are fully 
stocked and mission ready.

VHA's Office of Emergency Management Did Not Always Conduct Mandatory 
    Annual Inspections

    OEM was not in compliance with VHA's requirement to conduct annual 
cache inspections at all 141 emergency cache locations. According to 
the OIG's survey of cache managers, only 122 managers reported that 
their cache was inspected in fiscal year (FY) 2017, and only 96 
provided the team with an inspection report for the team to verify. 
OEM's Field Program Manager claimed that, in part, the failure to 
complete inspections at all cache locations occurred because some area 
emergency managers and regional area managers were deployed at least 
once for at least a two-week period from August through late November 
2017 for natural disaster recovery assistance or in response to a mass 
shooting. Because of the missed inspections, OEM exposed cache 
locations and their contents to unidentified or unaddressed physical 
security risks. Additionally, VA's current procedures do not require 
the inspectors to check the cart's readiness or even open it to assess 
whether the drugs are unexpired and in the correct quantity. Without 
periodic inspections to make sure emergency caches are mission ready, 
caches are at risk of not being prepared to activate in an emergency.

Some Medical Facility Directors Did Not Conduct Mandatory Annual 
    Activation Exercises

    Medical facility directors are responsible for ensuring that 
mandatory annual cache activation exercises are conducted, including 
making certain that there are no physical limitations such as carts not 
fitting through doorways, that would affect medical facilities' ability 
to activate their caches in an emergency. However, according to the 
OIG's cache manager survey, 21 of 141 cache managers did not conduct 
activation exercises in FY 2017. Additionally, some exercises were 
merely verbal discussions of activation steps, which would not involve 
looking at the cache area or even confirming the carts could move. 
OEM's Acting Director and Field Program Manager expressed concern to 
the OIG that medical facility directors were not fully complying with 
the annual cache activation requirement, but also noted OEM lacks the 
authority to enforce the annual cache exercise requirement and thus 
does not monitor compliance. In fact, there is no governance structure 
in place to ensure medical facility directors are complying with the 
activation requirement.

Medical Facilities Missed Opportunities to Use Soon-to-Expire Emergency 
    Cache Drugs

    EPS did not order replacement drugs in enough time to allow medical 
facilities to use soon-to-expire drugs in the medical facilities' 
general medical operations, as directed in EPS's All-Hazards Emergency 
Caches Replenishment Procedures policy. The OIG found that most of the 
expiring drugs could have been used by the medical facilities if EPS 
had replaced them before the drugs expired. Cache managers at the 26 
caches the team visited reported that, on average, about 80 percent of 
cache drugs and supplies were usable in routine medical facility 
operations. In addition, an OIG pharmacist determined that 95 percent 
of cache drugs and supplies could be used at VHA medical facilities 
providing inpatient and outpatient care, and up to 73 percent could be 
used at facilities that provide only outpatient care. The OIG estimates 
VHA would waste 28 million units of drugs, a value of $34 million, over 
the next five years if it continues to fail to use soon-to-expire cache 
drugs.\5\
---------------------------------------------------------------------------
    \5\ This value represents an estimate of the value of expired drugs 
for all VA caches. The audit team used its estimated amount and value 
of expired drugs, that are not part of the SLEP, and multiplied these 
values (1.4 million units and $1.7 million) by four because, according 
to EPS's Inventory Management Specialist, EPS orders replacement cache 
drugs four times a year. The resulting annualized 5.6 million units and 
$6.8 million were multiplied by five to arrive at the five-year 
estimate.

---------------------------------------------------------------------------
The Emergency Cache Program Lacked Efficient Oversight

    VHA defines the roles and responsibilities for running the 
Emergency Cache Program in its Directives 0320.10 and 1047(1), yet 
these responsibilities were not met. At the time of the audit, no 
single program office or person was tasked with overall responsibility 
to ensure that the Emergency Cache Program was mission ready. 
Governance is fragmented, with three separate VHA program offices 
having some oversight responsibilities for the program, in addition to 
the responsibility each medical facility director has for their own 
cache. Moreover, one of the national offices tasked with specific 
oversight responsibilities-the Office of Public Health-was reorganized 
a year prior to the OIG audit, which affected its ability to carry out 
its cache oversight responsibilities such as updating policies and 
directives.
    In addition, there was a lack of oversight accountability among the 
three program offices tasked with overseeing the Emergency Cache 
Program. For example, while OEM is responsible for the annual cache 
inspections, it was not consistently documenting inspection results and 
the associated corrective actions. Consequently, OEM did not have a way 
to track on a national level the status of all identified violations. 
OEM's Emergency Management Specialist told the audit team that there 
were no long-term violations at any cache location. However, the team 
identified a location with a documented violation from 2010 in which 
the cache storage room failed to meet security standards-the cache was 
in the pharmacy separated by a metal fence with a locked gate. The 
cache storage area is not in compliance with VHA Directive 0320.10 
because unauthorized access could be gained by climbing over the fence, 
or through section gaps. According to pharmacy personnel, this facility 
never had another location available to store its cache. As of the 
team's site visit in February 2018, this security violation persisted, 
and the facility had not developed an action plan to correct it. Not 
tracking violations like this across the nation creates a risk to the 
security of the cache inventory items as well as the possibility that 
caches are operating with violations that affect their ability to be 
ready to activate.
    As the findings indicate, the lack of effective oversight increases 
the likelihood that the Emergency Cache Program will not be mission 
ready.

RECOMMENDATIONS

    The OIG made seven recommendations to the Executive in Charge, 
Office of the Under Secretary for Health, based on the findings. The 
Executive in Charge was responsive to all OIG recommendations and 
agreed to make necessary changes to strengthen the program. For 
example, the OIG recommended that VHA develop a requirement for at 
least annual wall-to-wall cache inventories as well as improve cache 
inventory management processes and the accuracy of the national cache 
inventory data. The OIG also recommended that VHA assess whether the 
cost savings associated with participation in the SLEP outweigh the 
risks expired drugs pose to the program's mission. Recommendations also 
included updates to cache oversight responsibilities to ensure robust 
annual cache inspection and activation exercises, specific 
accountability measures, and appropriate oversight of the program.
    While all seven recommendations remain open since the report's 
October 31, 2018 publication, VHA has made progress towards 
implementing the recommendations, based off information provided in 
March 2019. VHA provided a status update to the OIG on June 14, 2019, 
and that information is under review by OIG staff. Thus far, VHA has 
acted to

    1. Provide training on conducting wall-to-wall inventories and on 
how to address expired, excess, incorrect, or missing cache items;
    2. Commence initial wall-to-wall cache inventories;
    3. Assess continued participation in the SLEP in conjunction with 
stock rotation and returns, and identify which cache drugs should 
remain in the SLEP;
    4. Enable each cache site to access its inventory information in 
the national inventory database;
    5. Begin clarifying cache policies, directives, roles, and 
responsibilities; and
    6. Assess which cache drugs could be used in routine medical 
facility operations.

CONCLUSION

    The importance of an effective Emergency Cache Program cannot be 
overstated. The OIG found that VHA did not effectively manage the 
program and that VHA officials had no assurances the caches would be 
ready to mobilize in the event of an emergency. As a result, VHA risks 
not having the drugs and supplies necessary to meet the emergency needs 
it might face for mass casualty events. These risks are due to a poor 
governance structure and inadequate oversight processes (including 
missed inspections and activation exercises) that cannot ensure caches 
are secure and stocked with unexpired drugs in the appropriate 
quantities. Without improved oversight and accountability, the 
Emergency Cache Program has increased risks of being inadequately 
equipped and wasting drugs and medical supplies.
    Madam Chairwoman, this concludes my statement, and I would be 
pleased to answer any questions you or other members of the 
Subcommittee may have.

                                 
                        STATEMENT FOR THE RECORD

                       HERITAGE HEALTH SOLUTIONS
    Heritage Health Solutions (Heritage) welcomes the opportunity to 
submit this Statement for the Record to the House Committee on 
Veterans' Affairs Subcommittee on Health. While Heritage does not work 
directly with the Department of Veterans Affairs (VA) Emergency 
Response and Pharmaceutical Cache Program, we have had significant 
experience working with the VA before, during, and after disasters 
across the country.

INTRODUCTION

    Heritage is an integrated health care solutions provider located in 
Coppell, Texas. Heritage has more than a decade of experience providing 
first and emergent pharmacy services to the Department of Veterans 
Affairs and veterans.
    Since 2005, Heritage has provided the VA with a cost effective 
solution to ensure that veterans have access to urgent and emergent 
medications when a VA pharmacy is unable to fill a prescription. Most 
often, the services are used when veterans are unable to reach a VA 
pharmacy due to the distance from the clinic to the closest VA 
pharmacy. When a veteran is in need of medications, Heritage is able to 
work with that veteran to pick up a 10-14 day supply of his or her 
prescription medications at one of the 65,000 retail pharmacy locations 
in our pharmacy network. When a veteran receives a prescription from an 
authorized prescriber, the veteran presents the VA authorized 
prescription and a voucher at a retail pharmacy and receives his or her 
medications with no out of pocket expense. This solution provides 
veterans with immediate access to needed medications while the 
remaining supply of medication is processed and delivered through VA's 
mail order system.
    These services allow the VA to exercise appropriate controls 
related to which medications on the VA National Formulary qualify as 
first and emergent, and only prescriptions from VA authorized 
prescribers can be filled at the retail locations.

DISASTER RESPONSE PLANNING

    Several years ago, we recognized the need to develop a disaster 
response plan that would be ready for implementation in the case of a 
natural or other type of disaster. With this disaster response plan, 
Heritage works with the VA to provide veterans access to medications 
during a natural disaster or other disruptions to the pharmaceutical 
supply chain and distribution system. In some instances, the 
infrastructure that exists after a natural disaster is the roadblock to 
care. When there is disruption in the power supply, pharmacies are 
unable to keep medications, such as some insulins, at the appropriate 
temperature. When roads are washed away or littered with debris, the 
pharmacies may be inaccessible. Planning around these types of 
uncertainties is critical to the success of the disaster response plan. 
Having a well-managed cache of medication is important. But that is 
just one part of the solution. The ability to distribute these 
medications can be impacted in a disaster, and appropriate planning 
needs to be in place to address those types of challenges.
    Often, during a natural disaster, veterans are displaced from their 
homes and are unable to access a VA pharmacy or receive necessary 
medications from the VA mail order system. It is not uncommon that 
veterans are forced to quickly evacuate their homes, and they often 
leave without an adequate supply of medication. Furthermore, when 
veterans are displaced from their homes for an extended period of time 
because the natural disaster prevents them from getting back to their 
homes, they are unable to rely on VA's mail order system for their 
prescription re-fills.
    Under these circumstances, it is important that a process be in 
place to provide veterans with a seamless system to help identify what 
medications are needed and ensure veterans can gain access to emergent 
medications such as insulin, inhalers, and antibiotics. Utilizing our 
disaster response plan allows the VA to ensure that veterans have 
access to their VA authorized prescriptions at a retail pharmacy during 
the disaster response.
    For example, during our work with the VA after recent disasters, we 
encountered a situation where an elderly veteran was forced to quickly 
evacuate his home and was unable to remember what medications he was 
taking. We were able to work with the VA, the veteran, and family 
members to identify the veteran's medications and then provide the 
family caregiver with information on where to fill a new prescription.
    Heritage has also worked with retail pharmacy chains to identify 
and communicate to the VA which retail pharmacy locations are open in 
the disaster response area. With this information, the VA and Heritage 
are able to direct veterans to locations that are operational and have 
the needed medication in stock.
    The Heritage disaster response plan is an adjunct to the VA's 
Emergency Cache Program and serves as an augmentation to the VA's own 
Disaster Response Plan. Either upon notification of an impending event 
by the VA, or Heritage's own vigilance, we start an internal disaster 
response scenario. Our response includes advising VA leadership on the 
potential impact of the event, tailoring options to manage both patient 
risk and cost control, notification of participating pharmacies, and 
consistent reporting of utilization back to the VA. The constant flow 
of communication provides key leaders with the data required to make 
more informed decisions regarding the appropriate access to medications 
depending upon the severity and extent of the disaster.

DISASTER RESPONSE DETAILS

    Heritage has activated its disaster response plan many times in 
recent years. In 2018, Heritage successfully assisted the VA with their 
responses to Hurricanes Helene (Pacific Islands), Florence and Michael. 
2017 was also a very active year for hurricanes with Harvey, Irma, 
Jose, and Maria devastating many parts of the Gulf Coast, Puerto Rico 
and the Virgin Islands.
    In addition to hurricanes, Heritage has also assisted the VA after 
the wildfires in California and throughout the Western states. And more 
recently, we have helped manage the responses to flooding in Arkansas 
and Oklahoma. We are well aware of how disruptive and damaging these 
kinds of natural disasters can be for those impacted by them, and we 
are grateful to be a small part of the efforts to assist veterans in 
the aftermath.
    The VA also used our program to fill prescriptions in Colorado as 
the VA updated critical IT infrastructure in their pharmacies, which 
caused a temporary disruption to the VA's ability to fill prescriptions 
for veterans.
    Our disaster response plan has been incorporated into the VA's 
requirements for the first and emergent pharmacy program, and it 
currently serves as the basis for the statement of work on many first 
and emergent prescription program contracts within the VA today.
    The following is an example of the response process Heritage 
implements to respond to natural disasters:

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LESSONS LEARNED AND RECOMMENDATIONS

    Heritage continues to be impressed with the VA's commitment to 
caring for veterans during disasters. The VA's graduated disaster 
response scenarios allow for a scalable solution that capitalizes on 
the availability of contractor inventories for smaller more regional 
events through the establishment of emergency caches of critical 
medications for more wide scale, catastrophic events.
    As part of our work with the VA, we have continually strived to 
improve the disaster response process. In our experience, the success 
of our disaster response plan rests on three pillars: Responsiveness, 
Flexibility, and Communication.

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    Because each disaster has its own unique set of circumstances, we 
have identified the following lessons learned and make the following 
recommendations for Congress and the VA to consider in the future:

      Responsiveness is key. The ability to quickly and 
effectively activate a disaster network can assist the VA leadership 
with their strategic messaging efforts to inform veterans of available 
resources in a timely manner. Development of a step-by-step guide for 
the VISN's to utilize might be a useful tool to provide the details 
necessary to effectively plan and respond to disasters.
      As part of our disaster response plan, Heritage expands 
our business hours and the availability of our staff at no cost to the 
VA. We also provide the VA with 24 hour POC information in case of 
emergency. These steps help provide for a seamless response system for 
veterans and the VA.
      As part of our disaster response plan, we partner with 
both the VA's mobile medical unit and national retail pharmacies to 
establish a dedicated service line for veterans filling prescriptions. 
This type of process has improved communications between the retail 
pharmacy and Heritage and ensured that veterans received immediate 
access to their medications. Replicating this type of approach more 
broadly may further improve disaster responses.
      Increased use of Social Networking can directly impact 
the number of calls that our Customer Care Center receives during a 
disaster. Providing veterans, their family members and other caregivers 
with a number they can call to assist them in filling a veteran's 
prescription helps take a concern off their agenda during a high stress 
event in their lives.
      Assisting veterans with their medication needs can become 
more complicated in a disaster setting. Having a disaster response plan 
already developed and ready to be implemented at a moment's notice can 
reduce both financial and medication compliance risks for both the VA 
and their patients. The disaster response plan needs to be precise 
enough to target impacted populations yet flexible enough to shift as 
an event matures and migrates through the country.
      It is possible that the VA's Emergency Response and 
Pharmaceutical Cache Program could benefit from pursuing a private-
public partnership that would take advantage of industry's agility 
while adhering to the complex mission and requirements of the program. 
Increasing the use of contractor management of the program would, if 
structured properly, encourage the appropriate use of the FDA's Service 
Life Extension Program. The use of contracted management could also 
alleviate the VA's concern about using reverse distribution services by 
combining those services as a requirement in a single contract vehicle.
      Veterans are not the only population impacted by 
disasters. Patients on other government insurance plans such as 
Medicare and Medicaid could similarly benefit from this type of system. 
We believe the disaster response plan we have developed is tailorable 
to other agencies and scalable to meet the demands of large and small 
agencies - thus useful as a possible guide to other Federal agencies.

CONCLUSION

    Throughout our work responding to disasters on behalf of the VA, 
Heritage has been able to use creative and innovative solutions to 
assist veterans. In certain situations, private sector Industry has an 
unparalleled ability to provide agile procedures that can quickly adapt 
and respond to changing demands and situations on the ground during a 
disaster.
    Heritage is committed to working with the VA to help them find 
solutions to their most challenging health care problems. We firmly 
believe that private-public partnerships, under certain conditions, can 
be a tremendous asset and we are honored to be one of the VA's service 
providers.