House VA Subcommittees Examine OIG Reports on O&P Care Provided to Veterans

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By Peter W. Thomas, JD, and Samantha Marshall, Law Clerk

Veterans' access to appropriate P&O care became the focus of the House Committee on Veterans' Affairs when two of its subcommittees held hearings on three separate reports issued by the U.S. Department of Veterans Affairs (VA) Office of Inspector General (OIG) in March. Much of the emphasis of the hearings involved the VA's plans to reengineer its internal prosthetic procurement process, but a major area of Congressional interest involved veterans' ability to choose their practitioner, receive O&P care from local prosthetists or orthotists, and obtain the most appropriate technology to meet their O&P needs.

All of these issues are addressed by H.R. 805, the Injured and Amputee Veterans Bill of Rights, and the hearings on these issues laid the foundation for future consideration of this legislation.

Three OIG reports were requested in 2011 by the House VA Committee when the new Chairman, Congressman Jeff Miller (R-FL), took control of the committee:

  1. Veterans Health Administration: Audit of the Management and Acquisition of Prosthetic Limbs, Report No. 11-02254-102 (published March 8, 2012).
  2. Healthcare Inspection: Prosthetic Limb Care in VA Facilities, Report No. 11-02138-116 (published March 8, 2012).
  3. Audit of Prosthetics Supply Inventory Management, Report No. 11-00312-127 (published on March 30, 2012).

The first report details the findings of an OIG audit on prosthetic limbs purchased by the Veterans Health Administration (VHA), which found overpayments to private practitioners of $2.2 million per year. The second report is a comprehensive analysis of the VA's capacity to provide O&P care, the VA patient base, and the system for amputee care that the VA has established. The third report addresses the broader VA prosthetics benefit and goes well beyond limb prosthetics.

Taken as a whole, these reports provide the most comprehensive analysis in recent memory of the VA's program to address the needs of injured and amputee veterans. But the hearings that examined key aspects of these reports uncovered as many questions as the reports seemed to answer.

Chief among these questions is exactly what the VA intends to implement in terms of changes to the procurement of O&P care from contract prosthetists and orthotists. Over the course of two different hearings, there was conflicting information offered on this point, which prompted one subcommittee chairman to require the VA to produce to the House VA Committee in two weeks a detailed plan that lays out the changes the VA intends to implement for prosthetic procurement.

Another question left unresolved, though addressed during the hearings, is the need for Congress to pass H.R. 805. Much of the testimony highlighted the same issues addressed in that legislation, and one key VA witness acknowledged that veterans do not know their rights about practitioner choice. Without such knowledge, veterans are not empowered to advocate for themselves.

House VA Health Subcommittee Hearing

On May 16, the House VA Subcommittee on Health held a hearing to examine the OIG reports and invited a series of witnesses to testify before the subcommittee. The first witness was John Register, a veteran who served in Iraq and subsequently lost a leg. Register is a National Association for the Advancement of Orthotics & Prosthetics (NAAOP) board member and testified on behalf of that organization. Michael Oros, CPO, FAAOP, an American Orthotic & Prosthetic Association (AOPA) board member, testified on behalf of AOPA on these issues. Representatives of the VA OIG and the Prosthetic and Sensory Aids Service (PSAS) also testified. Some of the major themes discussed at the hearing include the following:

  • The VA uses the term "prosthetics" to describe a wide variety of devices that have nothing to do with limb prosthetics or artificial limbs; the VA defines hearing aids, wheelchairs, internal implants, and other devices as "prosthetics." Of the $1.8 billion spent by the VA on "prosthetics" in fiscal year 2010, only $54 million (3 percent) were spent on prosthetic limbs. Orthotics are also considered "prosthetics" under the VA's definition.
  • The VA has made a major investment in its internal limb prosthetics capacity since 2009 with the development of the Amputation System of Care (ASoC) program, a series of prosthetics centers with differing levels of prosthetics expertise and capacity. The VA requirement for American Board for Certification in Orthotics, Prosthetics & Pedorthics (ABC) or Board of Certification/Accreditation, International (BOC) practitioner certification and facility accreditation was recognized as an important measure of quality. VA officials who testified at the hearing said the new investments in amputee care are designed to integrate care for veterans and treat the whole patient, and not just prosthetic needs.
  • Report 11-02138-116 details relatively high satisfaction levels with lower-limb prostheses, most of which are provided by contract prosthetists, but less satisfaction with upper-limb prostheses. A number of reasons for the variance in satisfaction levels were offered during the hearings.
  • NAAOP, AOPA, and several Congress members raised objections to the analysis provided by the VA in its report, "Veterans Health Administration: Audit of the Management and Acquisition of Prosthetic Limbs." There was serious skepticism about the OIG's calculation of the difference in what it asserts is the average cost for the VA to provide a prosthesis to a veteran through the VHA versus the VA's costs to purchase an average prosthesis under contract from a private prosthetist. The OIG asserts that the VA spent $12,000 on average for a prosthesis, while the average cost of a prosthetic limb fabricated in the VHA's prosthetic labs was approximately $2,900.
    • The VA's true costs of providing prosthetic care to veteran amputees may not be reflected in this report. It is not clear which costs OIG factored into its analysis because the report offered no detail on its calculations, but the VA OIG admitted during the hearing that key costs were not considered. There were specific questions during the hearing about the inclusion of labor costs (salaries for certified prosthetists and technicians), overhead (the costs of maintaining clinical facilities, laboratory machinery, information processing, etc.), and myriad other costs that go into the fabrication and fitting of prosthetic limbs. The point was made that if OIG was to factor into the calculation the recent investments the VA has made on its ASoC initiative, the cost of providing prostheses to veterans through its internal capacity would be significantly higher than calculated and probably higher than the cost to purchase prosthetic care from contract prosthetists.
  • The importance of practitioner choice, O&P technology choice, and proximity to O&P care were all key messages of Register's testimony. Many other witnesses and Congress members echoed these themes, which set the stage for further committee consideration of H.R. 805. In fact, passage of this bill would be consistent with the recommendation of report 11-02138-116 that the VA Under Secretary for Health "consider veterans' concerns with the VA approval processes for fee-basis and VA contract care for prosthetic services to meet the needs of veterans with amputations."

House VA Subcommittee on Oversight and Investigations Hearing

Two weeks after the Health Subcommittee hearing, on May 30, the House VA Subcommittee on Oversight and Investigations held another hearing on these same OIG reports. The focus of this hearing was on 38 U.S. Code (USC) § 8123 of the law that governs the VA's procurement of prosthetics and the expansive definition the VA employs for the term "prosthetics." The intent of the hearing was to examine whether the VA had expanded that definition with an eye toward subverting the federal procurement rules. Oros also testified before this subcommittee to offer the O&P perspective.

Section 8123 is an expansive grant of authority to VA officials to procure "prosthetic appliances" without respect to any other provision of law. Enacted in 1958, the law states:

"The [VA] Secretary may procure the prosthetic appliances and necessary services required in the fitting, supplying, and training and use of prosthetic appliances by purchase, manufacture, contract, or in such other manner as the Secretary may determine to be proper, without regard to any other provision of law." (Emphasis added.)

This is a grant of authority to the VA to disregard Federal Acquisition Regulation as well as the VA Acquisition Regulation when procuring "prosthetic appliances." This enables the VA to provide sole source contracts without launching a formal competitive process to secure the prosthetic care needed by the veteran and prescribed by the physician. This grant of authority is so expansive-and the VA's definition of prosthetics has grown so broadly-that the VA oversight staff believed the VA might be using this section of the law to avoid the cumbersome acquisition process and perhaps overpay for a variety of items and services that the VA procured under the prosthetics benefit.

Section 8123 is the reason veterans are able to access O&P practitioners outside of the VA system, regardless of whether the practitioners have formal VA contracts. It is also the statutory basis for the assertion in H.R. 805 that veterans have a "right" to choose their O&P practitioners. Section 8123 is a critical provision of the law that was designed to address prosthetic limbs in particular. The legislative history on this provision is very compelling.

The federal government enacted many VA benefit laws following World War II, and many of those concerning prosthetics for veterans specifically trace their origins to 1945. In that year, World War II veterans marched on Washington DC, waving artificial limbs and protesting the quality of the prostheses provided through the VA compared to those received by civilians. In response to public outrage and the need to provide for the increasingly large number of veterans covered by the VA, Congress passed a law creating the Prosthetic Appliance Service in 1945, later expanded in 1948 to the PSAS, and began to invest in research into more advanced prosthetic limbs.1 A committee of veterans with amputations was also established in 1945 by the then Surgeon General, Major General Paul R. Hawley, CB, Hon. FRCS, to advise the VA on the quality of any new limb types it was considering for its programs.2

In 1958, a series of benefit laws were consolidated, and § 8123 was enacted to specifically address VA procurement of prosthetic limbs, termed "prosthetic appliances." Laws governing the provision of prosthetic appliances under VA benefits have-from the beginning-included coverage of artificial limbs. There is no indication that the subsequent consolidation of Veterans' Benefits laws in 1958 or any subsequent amendments to 38 USC § 8123 have sought to limit that original purpose. No matter how the VA has expanded its definition of prosthetic appliances over time, it is clear that artificial limbs were intended to be covered under 38 USC § 8123 and other prosthetic appliance provisions, and that the provision of quality prosthetic limb care has historically been of great importance to Congress and the VA.

During the Oversight and Investigations Subcommittee hearing, the question of whether § 8123 should be repealed was discussed. Oros, addressed this issue by saying that the provision should at least be preserved for what it was originally intended to accomplish; i.e., application to prosthetic limbs.

In the end, it was clear that the subcommittee became better acquainted with the history, purpose, and value of § 8123 and the impact this provision has had for decades on veterans who have prosthetic needs. The VA witnesses asserted that prosthetic procurement decisions are made at the VA based on the physician's prescription and what is best for the veteran. In fact, the VA witnesses repeated this so many times that the subcommittee's chairman eventually acknowledged that he believes the VA officials at the hearing are sincere in their efforts to place veterans first, and are not simply averting cumbersome federal regulations when procuring prostheses.


In the aftermath of three OIG reports and two Congressional hearings, it is clear the VA understands the controversy it has engendered by proposing to reengineer the prosthetic procurement process. There were few voices-neither elected officials nor veteran service organizations-that expressed support for the procurement process changes being implemented by the VA. Additional developments from the VA are expected as Congress considers its next steps in developing legislation to address continued areas of concern.

Peter W. Thomas, JD, serves as general counsel for the National Association for the Advancement of Orthotics and Prosthetics (NAAOP).

Samantha Marshall is a law clerk with Powers, Pyles, Sutter, & Verville PC, Washington DC.


  1. McAleer, James. 2011. Mobility redux: Post-World War II prosthetics and functional aids for veterans, 1945 to 2010. Journal of Rehabilitation Research & Development. 48:vii-xvi.
  2. Hurd, Charles. "Veterans to Pass on Artificial Limbs; Committee on Amputees Will Advise Administration on Merits of New Types," New York Times, November 3, 1945.