In a scheme fit to fully infuriate patients and pad wallets, the VA providers prescribe medications; generally, the medication provided is a cheap knock-off, a generic mixture, or drugs with rebate incentives where the hospital providers are “encouraged” to use one drug more than another and the “higher cost” is rebated back the hospital in a profit-sharing scheme. All these schemes and more play out at your local hospital and VA facilities, so please do not think this is industry-specific to the government. However, as proved by the Department of Veteran Affairs (VA) – Office of Inspector General (VA-OIG) reports, t improper controls and governance wastes the rebates, harms patients, and still cannot get the programs correct.
I have three prescriptions hindered by the pharmacy practices of the VA, where the knock-off drug is useless, the mixture of the medication does not do as well as the original medicines prescribed, and where the cost of an ingredient has changed one medication to another and made the prescription less effective to the point where more medication is required for less overall effectiveness. If the patient has to take more medication, does that mean that the cost savings never happened or that the cost savings were pushed down to the customer? Does the patient even have a voice in the pharmaceutical decisions? Why?
We begin the VA-OIG reports with a New Jersey man, who from 2017 thru 2020 stole more than $8.2 million in HIV medication from the VA. Where were the supervisors when procurement officers for the VA over-ordered medication, stole the excess, sold the stolen goods, and pocketed the profits? Where were the oversight accountants? Where were the hospital directors? People had to know, yet somehow the scheme could exist and thrive; this is as much a failure of leadership as it is ineffective governance, poor inventory control, and useless organizational controls. Truly a pathetic example of VA leadership!
On the topic of ineffective governance of pharmaceutical contracts, and diversions of drugs, the VA-OIG report the following:
“The Veterans Health Administration (VHA) spent about $6.6 billion on prescription drugs in fiscal year (FY) 2019. Most were dispensed to veterans by medical facility pharmacies. VHA pharmacies can return drugs that become damaged or expire before use through a reverse distributor for credit or destruction. In FY 2019, VHA expected to receive about $52 million from drug returns. The VA-OIG found VHA pharmacy chiefs did not effectively implement the program and did not follow requirements in VA’s contract with the reverse distributor, Pharma Logistics. These issues increased the risk of drug diversion and ultimately put about $18.1 million at risk. Pharmacy chiefs did not always secure, and track drugs held for return or complete required analyses to maximize returns. They also failed to meet contract requirements to return for credit-only drugs due to expire within 120 days. VA’s National Contract Service and network contracting officers needed to do more to ensure contract terms were met. The Office of the Deputy Under Secretary for Health for Policy and Services and the Office of the Deputy Under Secretary for Health for Operations and Management did not effectively govern the program or communicate requirements to medical facilities” [emphasis mine].
Someone help me out, for I cannot understand how incompetence can be designed into these systems, policies, procedures, and responsible parties retain their positions of power. What happened in 2018, 2017, 2016, and earlier? We have a single fiscal year (FY) snapshot at a program that is an absolute failure. By any measurable standard, that should have ignited a full audit of previous years until finding a successful year when the program worked. Will there be a follow-up to this investigation to see if the VA-OIG’s recommendations are followed and implemented? The VA-OIG has the leadership caught dead to rights on ineffective governance of a program worth $6.6 Billion to the American Taxpayer, and no accountability or responsibility of personnel is to be found anywhere. Why?
In a separate investigation, the VA-OIG found:
“In October 2020, VA ended its contract with Pharma Logistics. The vendor continues to process and issue final invoices to facilities as the returned drugs become eligible for and receive manufacturer credit. The final invoice process will continue until at least April 2022. VHA medical facility pharmacies lost at least an estimated $2.1 million worth of drug return credits because pharmacy chiefs did not always effectively monitor or review job settlement statements before Pharma Logistics issued final invoices. In addition, although the vendor established a dashboard that provided information on the status of drug return credits at the facility level, it cannot provide a national report on all outstanding credits. This hurt VHA’s ability to maximize potential drug return credits and minimize the risk of lost credits. VHA will continue to be unable to ensure it is receiving all credits for drugs returned by medical facilities if pharmacy chiefs do not routinely monitor preliminary invoices, reconcile job settlement statements to identify outstanding credits, and request extensions to final invoices to allow additional time for credit processing. This risk will persist for any future drug return contract(s)—whether awarded nationally or locally—if the reimbursement structure remains the same” [emphasis mine].
Did you catch that; the vendor created software to help track medications, making it easier to return medicines, and the VA pharmacy chiefs could not follow the dashboard and increased the risk of losing money for the VHA. You were hired to perform a job; a collateral duty of your job is inventory management, tools are provided and supported to aid you in making decisions, and you refuse to use these tools. How is this the vendor’s fault? Why do you still retain your position? Ineffective governance is barely the tip of the VA’s problematic iceberg created the good ship America has hit!
Liars, Thieves, and Fraud Artists Beware
A Norwood, Massachusetts woman has been indicted, remains presumed innocent until proven guilty in a court of law, by a jury of her peers, for stealing social security and workman’s compensation benefits. The Norwood woman’s actions are continuing to support the claim that complexity breeds criminal abuse. Unfortunately, also proving that the government is not doing their jobs in checking tax records before providing benefits.
A man from Georgia has pled guilty to running a Ponzi scheme and defraud the American government during the COVID pandemic. Frankly, I am thrilled to see another fraudster being stopped before his crimes become astronomical in scale. I remain convinced that the government procurement system is wide open to abuse, and the complexity of the procurement system is too costly, cumbersome, and risk inviting. The criminals see too much opportunity in the government procurement system, and the complexity breeds the ability to lie, steal, cheat the American taxpayer.
The following remains a case where there are too many lawyers and not enough truth to ascertain what in the world is going on. If you have further insight, please weigh in. “Sunrhys LLC, a landlord and property management company, headquartered in Tacoma, Washington, agreed to pay $16,618 to resolve allegations that it violated the False Claims Act by overcharging a tenant and by fraudulently obtaining federal funds from a federal program designed to provide housing to homeless Veterans. The United States alleged that Sunrhys violated the agreement and the HUD-VA Support Housing program requirements by fraudulently overcharging a veteran for monthly rent between July 2019 and April 2020.”
Highlights, Audits, and Inspections
July 2021 – Highlights:
“Each month, the Office of Inspector General (OIG) publishes highlights of our investigative work, congressional testimony, and oversight reports. Each month’s highlights are meant to provide a brief overview of the most significant OIG work conducted in that period.”
The VA-OIG conducted a financial efficiency review of the Miami VAHCS. From the findings, the VHA, VBA, National Cemeteries, specifically, and the VA generally, could learn much about fiscal responsibility. But this was already well documented! The VA has never successfully passed an audit with transparency, accountability, and responsibility; why am I the only person demanding to know why? Want to laugh; the VA-OIG recommends “more scrutiny” for financial transactions to the VA as a recommendation. Like the current system for scrutiny is working, and just a bit more effort will help. Go ahead and read the report for more specifics; my stomach cannot handle writing about the gross inefficiencies, the actual harm, and out-of-control governance failures. Fiscal insanity is one thing; what is occurring at the Miami VAHCS is beyond insane and bordering on the unbelievable! Almost the beginning of the Twilight Zone.
The Sheridan VAMC in Wyoming continues to be performing well and deserves hearty congratulations for the results of their latest comprehensive healthcare inspection. I prefer to issue congratulations than butt-kickings, and the congratulations are well deserved. Keep up the good work moving forward.
© 2021 M. Dave Salisbury
All Rights Reserved
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