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The Department of Veterans Affairs office of inspector general has found critical flaws in two important functions at the Veterans Health Administration. They have to do with financial controls and whether it has a good grip on the millions of veterans’ medical appointments canceled because of the pandemic. Inspector General Michael Missal joined Federal Drive with Tom Temin to discuss.

Interview transcript:

Tom Temin: Mr. Missal, good to have you back.

Michael Missal: Great to be here, Tom. Thanks for having me.

Tom Temin: And let’s talk about the financial controls. You looked at some of the visions, the large networks that are operated regionally. And let me just ask a basic question. Don’t all of these regional networks and these large medical centers use identical financial systems? Or do they vary from location to location within VHA?

Michael Missal: Well, how they use the systems really do vary. VHA is very decentralized organization. And as a result, particularly on financial management, it’s an extraordinarily decentralized structure. For example, the CFO of VHA, so the Chief Financial Officer of the administration that does all of the medical facilities, is really more a consultant to the Undersecretary for VHA, that person does not have any real authority to make decisions down the line. And those are done by CFOs at divisions, which as you point out, are the regional areas as well as the CFOs of the medical centers. So those CFOs of medical centers of business report up through a different chain than the CFO of VHA.

Tom Temin: But what you found, at least in the ones that you did examine differ, though, they might is that their controls tended to be focused on the spending and making sure that all of their money was used up by the end of the budget year, but not so much on whether the money was necessarily used properly, or whether they were getting their best value for the dollars they didn’t spend.

Michael Missal: Correct. The reason we thought this was important to do this review is VHA spent 10s of billions of dollars on its medical centers. And so we know that they look to see if they’re spending the money according to how much money is budgeted to each facility. But we were very concerned based on other work that we had done, that they weren’t really looking to see if they are spending the money efficiently. Meaning are they getting the most bang for the buck here. So we focused in on two VISNs, VISIN seven, which is in the southeast, covering facilities in Alabama, Georgia, and South Carolina — and VISN 12, which is a great lakes, which is Illinois, Indiana, Michigan, Wisconsin. And what we found is they really had sort of very different ways of looking whether they were spending the money efficiently. And certainly we’re not doing that in a really comprehensive way.

Tom Temin: So in other words, they could say, well, we had a $370,000 budget for wheelchairs, and we spent $370,000 on wheelchairs, I’m making this up. But maybe they could have gotten the same number of wheelchairs for $300,000. But there’s no way of really knowing.

Michael Missal: That’s correct. And so there are measures, they could look at, for instance, how frequently they use prime vendor contracts. So there are prime vendors who sell supplies and equipment to VA. And VA has a goal that each of the facility should use a prime vendor for 90% of the purchases. And we know the number is typically lower at the medical centers. But nobody’s really looking and asking, why is it lower? Is it for a particular reason, the prime vendor contracts are put in place to help VA save money and to spend it more efficiently. But that’s just one example we looked at to see that they’re really not looking to see why they’re not meeting their goals.

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Tom Temin: Yes, because you found the people that do the auditing, and the people that do the performance monitoring, do look at certain things, including the clinical outcomes, but they don’t look at the financial systems and outcomes as much as the clinical.

Michael Missal: Correct. And that’s a focus for our office going forward, we’re going to be and have started to look at individual medical centers to see if the money they’re spending on programs is being done in an efficient way. One of our goals is oversight is to make sure that taxpayer dollars are spent efficiently and effectively. And this is one big area where I said 10s of billions of dollars are being spent.

Tom Temin: So in your recommendations, then you focus on specific controls they should have in place, but also it sounds like the structure and the way the CFO offices are set up in the macro sense, are also part of the recommendations.

Michael Missal: Correct. We made three recommendations in this report. They’re really focused on making sure that they look at financial performance indicators, not just that they spent the money but are they spending it efficientl. And then secondly, in any organization, accountability is so key and so we recommended they have an office or person responsible for establishing financial controls and overseeing those financial controls.

Tom Temin: And switching gears here for a moment, then there’s the report that you did on the cancellations that happened because facilities simply had to close in March because of the pandemic. And it sounds like a mixed bag with respect to VHA, being able to capture those people that missed appointments and getting the back into the system, but a couple of million spilled over.

Michael Missal: Correct. So during the pandemic, VA appropriately instructed its medical facilities to avoid non-urgent face to face appointments and keeping with CDC and other recommendations. And we have found that the staff at VA is very dedicated trying to do the right thing for their patients, but it was necessary to cancel a number of appointments. So we looked at a six week period between March 15 and May 1 and VHA cancelled 7.3 million appointments during that time period. And what we did is we look to see if there was follow up, because some of these appointments, about 1.1 million were canceled, canceled appointments were converted to telephone or video appointments. But what happened to these and we could not find any evidence of follow up or tracking for 2.3 million of these 7.3 million appointments that were cancelled.

Tom Temin: And they have pretty elaborate procedures, and then there’s data entry issues related to whether the veteran him or herself cancelled the appointment, or whether VA did. And it all kinds of adds up to again, almost like we were talking about in the financial area, different procedures and different ways of doing this, depending on the location.

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Michael Missal: That’s correct. And what we found is on March 22, VHA issued guidance that all canceled appointments should be designated as cancelled by the patient, whether or not the patient really canceled it. And we think that’s problematic for a number of different ways. Because one thing that does by saying it’s canceled for the patient, then the facility doesn’t follow up. And importantly, for wait times, it goes down to zero days for wait times. And VHA focuses in and managing the wait times to make sure that patients are getting the care in an appropriate time period and they get the quality that they deserve. Now VHA changed that guidance on April 1, but we found that just wasn’t consistently applied across the board. So that’s why one of our recommendations in this report is for VHA to coordinate and communicate well defined, rescheduling strategies for these millions of appointments that were cancelled.

Tom Temin: Do you sense that they have the personnel sufficient to do that? Because it sounds like a lot of manual work to follow up on all of these.

Michael Missal: Well they’ve developed an initiative already, they recognize the issue here, they recognize the importance of it. So we’re going to be watching that very carefully to see whether or not they do have the resources and the ability to follow up as needed.

Tom Temin: Is it possible to tell whether the number of appointments correlates with the number of people involved? That is to say, if there’s 2 or 3 million that were not followed up with appointments, is that two or 3 million people or could have been multiple appointments per person?

Michael Missal: It’s typically a veteran may have more than one appointment. So it likely is less than a 2.3 million people for those 2.3 million appointments.

Tom Temin: And it’s probably impossible to tell, but could you tell whether the cancellations had any correlation with the seriousness of what it was that they were going to see the VA about or, for that matter, the people that were followed up on. I mean, not to overstate it, but a hangnail versus a cardiac condition.

Michael Missal: So these were supposed to be non-urgent appointments as VA classifies them as non-urgent. Urgent appointments where veterans had to come into the facility we’re supposed to continue as scheduled. So we haven’t seen any indication that people with urgent care had appointments cancelled, that was not brought to our attention.

Tom Temin: Okay, but sounds like something you’re gonna follow up on because your data does go through pretty early in the pandemic, and do you at least get the sense that there’s a little bit more openings happening and maybe some normalcy going on in the clinics and centers?

Michael Missal: They’re starting to return to normal, a number of facilities are back operating as they were before and are 7.3 million appointments cancelled remember only covers a six week period that ended May 1, and certainly there were many millions of appointments cancelled after May 1 as well as we continue to be in this situation.

Tom Temin: Yeah. So you’re going to stay on this one?

Michael Missal: Absolutely. We made three recommendations and we’re going to be watching it very closely to ensure that VA follows up as necessary, and that the veterans who had appointments get them rescheduled as necessary.

Tom Temin: Michael Missal is Inspector General of the Veterans Affairs Department. As always, thanks so much.

Michael Missal: Thanks for having me Tom.

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