Biologic Implant Purchasing, Inventory Management, and Tracking Need Improvement

The OIG examined whether the VHA had effective procedures for (1) purchasing, (2) inventorying, and (3) tracking biologic implants such as skin substitutes and corneal or dental implants. The OIG found deficiencies in all three areas at four medical facilities it visited. The audit team determined that purchasing agents did not always record implant purchases properly or use the appropriate funds. The purchasing agents did not record 2,931 of 10,305 purchased biologic implants in the appropriate system. Instead, agents documented the implants in various local spreadsheets, databases, and third party systems. Purchasing agents sometimes improperly used logistics funds instead of prosthetic funds, which makes it difficult for VHA to fully account for biologic implant spending and effectively budget or use funds for other purposes. The OIG found that due to inadequate guidance, the facilities visited had an inaccurate inventory of biologic implants, did not use a standardized system, and did not consistently review inventory on hand. At the four facilities visited, staff could not locate 714 biologic implants in inventory, valued at almost $1.1 million. The audit team also found 288 unrecorded additional items, valued at almost $433,000, in storage locations. Poor inventory management can jeopardize prompt care, as medical providers may need to delay or cancel procedures if implants are unavailable. Finally, the facilities visited failed to track at least 45 percent of implants reported as used from October 2017 through March 2019. Further, VHA did not designate responsibility for overseeing tracking, develop a national policy on how facilities should track biologic implants, or have a standard tracking system that meets accreditation requirements. Effective tracking is needed for facilities to notify veterans if their implants are recalled by the manufacturers. VHA concurred with the OIG’s 11 recommendations to improve how it purchases, inventories, and tracks biologic implants.