over the past four years. looks like it will be a few minutes before it get under way. the house is in session. the beginning of a busy week on the house floor and for a preview we sfoek a capitol hill reporter. >> covering congress for congressional quarterly, house back from their memorial day break, what's ahead on the legislative agenda? >> well, this week there's two or three bills that are relatively non-controversial. although they are for the government to fund one bill this week, the spending bill for military instruction and veterans administration, republicans described this as their memorial day bill. there also will be a bill later this week for, to authorize spending by intelligence agencies. >> what message was majority leader eric cantor trying to send to his members and to others in laying out the congressional agenda? his proposed agenda, in his memo

last friday? >> he gave them -- he sdroibed to hem what lies ahead for the next two months. congress, the house of representatives, are planning to be very busy in june and july and then take their august break and we're almost at the election. this two-month period as described by eric cantor is important for house republicans. two things they're pry trooig do. some of which mr. cantor describes. one, finish up as much business as they before we get to the conventions and then the campaign. so there are various bills out there. spending bills they'd like to pass as many as possible. also there are bills that there are varying differences between the house and senate that need to be resolved. frankly, that's not the primary focus from the republican message. the republican message, instead, wants to focus on the second area and kind of what are the issues where republicans want to

take to the country to show how the election, of keeping a republican house, adding a republican senate, electing a republican president. republicans are describing in the house in the next two months areas like tax cuts and tax reform. areas like what happens to president obama's health care reform package after the supreme court rules, leader care prescribed in the memo or prepare house republican members more what lies ahead in these areas in the next two months. >> you pointed out that message landed way bit of a thud in front of some conservative groups. why is that? >> some conservatives object to it. you're right. because they say, the conservative interest group leaders, that it's -- there's not enough. that there's too much

bipartisanship. that there's not enough emphasis on what republicans stand for. obviously, republican leaders, public leaders contend that they are sending out their message, but these outside groups say that they've been doing this for the past year. the conservative leaders have been saying that house republicans have been too eager to compromise in a number of area, and this is diluting, in their view. this is diluting the republican and conservative message. >> you had the opportunity to cover democratic whip hoyer's briefing. what did he have to say about the cantor plans for the summer? >> well, he certainly disagreed with the conservatives. he really gave the opposite point of view. he thinks that -- criticized, really, on a couple fronts, majority leader cantor's agenda for the summer.

one, he said there's not enough of the priorities that democrats want to address, such as jobs legislation, such as deficit reduction. such as the fiscal issues that need to be resolved by the end of 2012 are also major tax increases and spending cuts, automatically would take place. mr. hoyer, minority whip, steny hoyer of maryland said that one problem with the cantor memo is that it doesn't address these issues that need to be addressed and ought to be addressed before the election rather than waiting for the lame duck, and then mr. hoyer's second point, which, again, obviously is different than what the conservatives said, hoyer said that there's too much politic it's in eric cantor's memo and not enough substance. that this is all being driven by polls. >> and republicans partisan

interests. >> rich cohen, keeping track on what's gag on in the house. thanks for the update. >> my pleasure. informing -- >> on c-span here on c-span3, the house veterans affairs subcommittee just under way with a hearing looking at department of veterans affairs purchasing practices of prosthetics with supply costs increasing 80% over the last four years. bill johnson of ohio is the chair and just getting under way live here on c-span3. >> -- we're not subject to acquisition regulations, stated that the va would work on, and i quote "guidance to ensure that prosthetics purchasing acts and logisticians extend to the max much possible" i have to wonder why they ignore the regulations when making these section 8123 purchases but now will attempt to comply with them.

among my follow-up questions was a request for a copy of va's guidance in how it would ensure purchasing agents follow the bar. just yesterday a response to that and the other questions was provided. it is interesting that only now is the va works to ensure that purchasers using section 8123 are documented and in line whip the far and the bar. after all, the va has had nearly three decades to work on this. failing to document purchases under section 8123 as acknowledged in the answers i received yesterday is a reckless use of taxpayer dollars. to us on this committee it appears as though the va operates as it sees fit, until attention is calmed to its operation. what the deputy secretary's letter did not address is the va's use of a vha directive, and i quote, "prosthetics simplified

acquisition procedures training." that was issued july 16, 2003, and expired july 31, 2008. and updated directive would probably have been useful over the last four years, as the va increased its prosthetics spending by 80%, however, we have seen no such update, and have even learned that those in the field that the va central office has instructed torp continue following. that expired directive contains important language stating that section 8123 was only to be used as a last resort. reinforcing the importance of compliance with federal acquisition regulations. however, this subcommittee has found substantial evidence of va purchasing agents using section 8123 as a first resort. given the broad language it contains, one can see why this easier approach is tempting and certainly not the first time we

have seen va purchasers opting for the easy route. while there are over 100 definitions for prosthetics throughout the federal government, the definition used by the va is a full paragraph in length. as we will hear today, some of the items falling under this broad definition do not sound like prosthetics to anyone except the va. the vha handbook's dwechx of prosthetic appliance is as follows -- all aids, devices, parts or accessories which patients require to replace, support or substitute for impaired or missing anatomical parts of the body. the items include artificial limbs, terminal devices, stump socks, braces, hearing aids and batteries. cosmetic, facial or body restorations, optical devices, manual or motorized wheelchairs, orthopedic shoes and similar items. perhaps this overly broad

definition is a contributing factor to the va's inability to effectively manage its prosthetics inventories, as one of the members of the first panel will note, the desks is confusing, and i am concerned that confusion is widespread inside the va as well as outside of it. recent audits from the va's office of inspector general have substantiated that the department does not effectively manage its prosthetic supply, nor does it have adequate control over its payments when procuring prosthetics. given that we, what we already know and what we will hear today, these findings are not surprising. a tailored definition of prosthetics is just one way the va can better track and manage its prosthetics acquisition. for instance, the broad inclusion of durable medical equipment under its prosthetics definition could encourage the misuse of seconds 8123 authority. in addition, as the ig noted about the va's overpayments,

exce excess inventories, "strengthening controls over these actions should jot compromise the quality of the prosthetic limbs provided to vetera veterans." in short, the va can be a better steward of taxpayer dollars while still providing access to care including in the area of prosthetics. another way the va can better manage the billions spent in prosthetics every year is to actually enforce the acquisition regulations that apply to section 8123. and the response i received yesterday, the va still fails to acknowledge the abuse of section 8123 and the blatant circumstance come vengs of the far and the var by va enemployees. we know pt problem exists. now is the time to fix it. if employees in the past have failed to follow internal guidance, then perhaps a legislative clarification is necessary to ensure best value

for taxpayer dollars. lastly, before simply reorganizing employee structures and moving chest pieces around on the board i am requesting here today that the va present to this committee in detail its plan to improve its acquisition of prosthetics and the specific reasons for changes before pu putting the flan place. thissest at transparencily help both veterans and congress see that meaningful reform is taking place. with that i now recognize the ranking member for his opening statement. >> thank you, mr. chairman. the response to the first and second world war, physical, occupational and rehabilitation therapy was introduced to respond to the needs of injured service members. with the high number of service members whose live was altered due to limb loss from combat trau trauma, the department of veterans affairs needed to provide assistive devices to lead a meaningful and

independent lifestyle. va contracts with many companies across country top provide prosthetics including companies in my home state of indiana which is an important medical device hub. for example, zimmer and warsaw has a contract covering primary hip and knee implants. and i know the company is proud of its good working relationship with both the va and dod. today we have the opportunity to discuss va's prosthetic acquisition and procurement poemses. following the subcommittee on securing on may 16th, further discussion is needed on va's prosthetic and orthotic purchasing. over a half century ago congress gave va the authority under title 38 section 8123 to pass over federal acquisition regulations and purchase state-of-the-art prosthetic limbs efficiently and quickly. this exemption is written into va acquisition regulations. by enacting section 8123,

exempting procurement of prosthetic limbs from other laws, va would have the ability to provide veterans with services and prosthetic devices needed to obtain a lifestyle slarp to the one they lived pre-injury. while section 8123 may proip the flexibility the veterans health administrations need to respond to veterans, we must also ensure this flexibility is used properly, and not as a means of bypassing federal acquisition regulations. finally, i hope that by reviewing the department of defense prosthetic process we may gain further insight on how to improve va's prosthetic procurement policies. i look forward to hearing from the va, dod and other witnesses on how question find this balance. thank you, and i yield back.

[ inaudible ] -- and mr. shaw managing partner of academy medical llc. both of your complete written statements will are made part of the hearing record. as you come to the table, please. >> you are now recognized for five minutes. >> good afternoon. and thank you for the invitation to neff procurement of prosthetic and orthotic care for our veterans. my name is michael i'm a member of the american orthotic and prosthetic association board of directors and a licensed clinical prosthetic, servicer of

services in state of illinois. my experience is with a subset of the va, quote/unquote prosthetic services's if you? someone on the street what a prostheses is artificial limb or possibly an arm. if you talked about an or those is, awe few individuals and family members have had a traumatic brain injury or stroke might be able to describe a custom made and fitted device to help limbs function proeperly. i'm fairly certain no one would suggest at seeing eye dog, wheelchair or many of the other items on the quote/unquote prosthetics budget. why does thas matter? i then his concern is an overly broad definition of prosthetics leads to policies that are inappropriate when it comes time to deliver replacement limbs and orthopedic devices. the result is barriers to care for veterans with limb loss.

we need prostheticses to provide for the families and live everyday lives. only two weeks ago there was a hearing on prosthetics as traditionally understood and defined. during that hearing, the chief procurement officer testified that because changes in procurement poemses applied only to items that costs 3ds,000 or more, those changes would not apply to 97% of the prosthetics budget. while i'm sure that statement is accurate, it's also unhelpful. nearly all the components of a basic prosthetic limb cost more than $3,000. so policies that do not apply in 97% of the va's prosthetic purchasing program can still delay vitally needed care for our veterans with limb loss. congress authorized the va to go to great lengths to ensure veterans access to services in his or her community. 23 you are a veteran in need of prosthetic care, the va's been given legal authority to do what

it takes to secure prosthetics and orthotics from the provider of the veterans' choice. urging this subcommittee to do everything in its power in the legislation, authority and policies remain in place to guarantee the veterans' right to choose their own provider. seems we shouldn't have to urge the committee to remain vigilant on this poit, but we do, because we sayre the kearns of several organizations that the veterans choice of providers is being eroded. there are real and increasing barriers erected to noun va provided care. one example. one veteran was recently told how he could receive only a high-tech neknee from the servis department mother than two hours away and not from the community based prosthetist from which he

had been caring for years. two solutions. one, receive the knee from the va more won that hours away or his local con resubmit the paperwork and take up to three moss' time for the approval to come through. that veteran finally switched to the va care, because he was tired of arguing for his own rights. aopena doesn't believe this is an isolated nnd incident. it's been suggested by some that cost may be a factor. a recent ig audit claimeded that the average cost of a prosthetic limb fabricated by the va in-house is about 25% of what an outside contractor charges. that analysis almost certainly fails to take into consideration va staff salaries, benefits, facilities and administrative

costs. community based providers working under contract with the va to provide high quality care to veterans at rates below the industry's stharnd have been approved by medicare. the goal of procurement system for prosthetics and orthotics should be to deliver the best care possible to all veterans regardless of age, geographic location, ability to become quote/unquote squeaky wheel and demand appropriate care. procurement policies should ensure four basic elements. veterans have access to the prosthetics provider of their choice without it having to yoevg come artificial and unnecessary barriers. veterans must be able to receive timely care from the provider, whether that provider is va or an independent practice. the pro thchlt hestist should

have the training and experience meet the specialized need of veterans. this is a challenge and for independent practices as the requirement for a masters degree as an entry level is implemented. contracting and other policies should require the measurement and continuous improvement of veterans outcomes. until each veteran achieves their highest level of restored function. mr. chairman, members of the committee, thank you very much for the invitation to testify and for your commitment to finding the highest quality prosthetic or or thod toik our nation's veteranses. i look forward to any questions you might have. >> thank you. mr. president shaw, you are recognized for five minutes. >> chairman, ranking member donnelley, members of the subcommittee, thank you for the opportunity to appear before you today to discuss the department of veteran affairs prosthetic purchasing practices and impact on academy medical, va vapor

phied better known small business. my name is daniel shaw and i am a managing partner of academy medical loeshgted in florida. academy is am source of supply and holds a federal supply contract, fss contract issued by the ak kra zigs center. my fellow managing partner and i graduated from the u.s. naval academy 1991. so named to pay homage to our alma mater. accompanies me, stephen kent, director of government sales and mr. stephen shirr subject expert in the field. my memorandum dated may 23, 2012, the veterans health administration notified vha procurement and prosthetics personnel engaged in implants of policy using the fss program. we're pleased with this change in fha position, one which levels the playing ford and

respects the nature of va's fss program. we have worked long and hard to get vha to adopt this policy. i have a copy of the policy and would like to offer it for inclusion in the record of today's hearing. we hope to his will formalize the policy memorandum by having it codified to amend the va acquisition regulations. policy should are formalized for perp turty as policies are easily forgotten as time goes on or through leadership changes. this es ebb specially true given there's likely to be a short and lng-term resistance to this policy. one concern we have is whether the vhs policy applies to all biological implants. to include those required at micropurchases why government car holders. we estimate nearly 95% of biological implants are acquired by purchase card holders neither trained nowhere nuanced in the use of sff contracts.

this will be success or failure from al supplier perspective and potentially result in no improvement. how they implement, monitor and enfor encompliance is still unclear. we estimate $175 million annual annually. a nice cost savings to the taxpayer. in addition, if va makes better yufs the schedule's program it will alloyd violations assured of receiving high quality products and reap the revenue from the program industrial funding fee used to fund its supply change management operations. wharn is hurting academy is authority grarcht title 38 united states code. the biological implants is welcome news to us and other fss contract holders, section 8123 still looms large as long as this authority exists and is

likely to be applied to open market procurements for biologics not secured from the fss program. we recently learned va determined and subsequently notified the authorities in section 8123 trump even the veterans first contracting program authorities contained in sections 8127 and 8128. the unprecedented and extraordinary contracting authority granted to va under its veterans contracting program were effective june 2007. didn't would sneem passing puck lib law 109-461 veterans benefits health care of 2006 congress would have specifically exempted section 8123 procurements from sections 502 and 503 public law 109-461, but it did 23409. in lig not. this issue need addressed given that biological procurements will be conduct and the open market. in closing, mr. chairman, the news of vha's policy gives us

hope and leveling the playing field. for that we are truly grateful. we seek only to be a supply of biological implants, treated respectfully and given the opportunity we've earned to be va's industry partner. we have no ax to grind. we simply have a business to run and will work to create and environment that engenders trust and mooch cooperation as we provide a service to america's heroes. thank you for your distinguished leadership. we never sought an add verify cerebral relationship with va. we hope to get the respect we have earned. thank you for holding this hearing. we'll be happy to answer any questions you or your committee members might have. >> thank you, mr. shaw. we'll now begin with question, and i'll yield myself five minutes. mr. shaw, who is the national regulatory agency for biologics throughout the country?

>> if i may, the fda is not a formal regulation body. it's the american association of tissue banks. it's a voluntary regulatory body. >> okay. could you briefly explain some of the criteria that, that the association of tissue banks aatb has to ensure patient safety? >> yes, sir. the aatb monitors that there are safety regulations such as testing for each donor through a variety of tests, the cancer, the hiv, hepatitis, various screenings to make sure that each donor is safe to move on to processing. >> okay. and i'm sorry. let's go back. mr. shirr and mr. kent, for the record, would you tell us where you're from and who you represent? >> yes, sir. my name is stephen shirr and i'm a consultant with academy medical.

i'm a subject matter expect wir a long history in biologics. >> okay. >> i'm from wellington, florida, and i'm the director of government sales for academy medical. >> okay. thank you. how can a surgeon or va facility be assured that the biologics they purchase are indeed safe for the patient? >> all biologic economies that are in the hospital systems and are to serve patients and are implanted into patients follows the aatb guidelines therefore all of deemed safe. >> how can, or do, biologics vary from manufacturer to manufacturer? >> all biologic companies share. there's just a handful of donor facilities that supply the processing plants. so pretty much they all come from the same sources. >> okay.

>> where do biologics plfrers procure their donors? >> again, there's a handful of donor facilities that dispense and supply the donors to the processing facilities, and they move on to the biologic companies. >> where exactly do these donors or cadavers, where are they procured from? do they come from foreign countries or from the u.s.? >> well, as per the aatb, they all come from the united states. >> okay. how do the various biologics manufacturers work cohesively together? do they commingle? >> they certainly do. they all share and -- in the donor pool. >> okay. do they share and swap products and brands? >> absolutely. >> okay. with regard to traditional biologics, what special training, experience, tooling or technique is required on behalf of the surge ton use the various

biological brands? >> to my knowledge, all biologics fop the same technique guides. with very little variance. >> regardless of the supplier? >> correct. >> okay. so to clarify, you're stating that the surgeon's ability and technique to use brand a over brand b is identical. not altering the surgeon's skills in any way at all that would jeopardize the patient's safety? >> it's pretty much how it's prepared in the o.r. whether it's rinse ord soaked to rehydrate, minimize bone -- it's a small difference. >> okay. you talk and four elements of care that in your experience comprised quality. uh-huh. >> how does the va oversee, supervise and otherwise hold community base survivors accountable for providing quality care to