VA Southern Nevada Healthcare System's Alleged Unnecessary Use of Outside Vendors to Purchase Prosthetics

The VA Office of Inspector General (OIG) substantiated an allegation that the VA Southern Nevada Healthcare System’s (System) prosthetics laboratory did not provide timely and cost-effective services to veterans for frequently prescribed compression garments and orthotic shoes. The laboratory showed a needlessly high reliance on outside vendors from October 2014 to May 2016 for items that it could have provided from existing stock. About 99 percent of prescribed compression garments and 75 percent of orthotic shoes, accounting for 91 percent of the System’s spending, went to vendors during this period. Sending veterans to outside vendors was not justified because the System had sufficient personnel and inventory to provide the prescribed compression socks and orthotic shoes. The OIG found that poor decision-making by laboratory employees, underutilized laboratory personnel, and unused inventory went undetected because the former chief of prosthetics did not effectively monitor the laboratory’s operations. The OIG also found that purchasing employees reported some cases were being closed prematurely using an incorrect program code indicating the veteran did not follow through with the consult. The OIG expanded the scope of the audit and found that the code was used incorrectly about 95 percent of the time resulting in a risk of delayed care for veterans. Since the audit period, a new chief of prosthetics has implemented sweeping changes to the laboratory. As a result of the changes, reliance on outside vendors dropped to 14 percent after June 2016. The OIG recommended that the VA Southern Nevada Healthcare System continue to improve its oversight and use of resources in the laboratory. Because the System’s previous chief of prosthetics is currently serving as the chief of prosthetics for the VA San Diego Healthcare System, the report includes similar recommendations for that organization.