1. John Lowe Associate Chief Consultant PBM Why Are We Here?

2. Objectives  Discuss findings of internal and external reviews  Review VA’s response and action plan to reviews  Provide training to staff and supervisors on the front line  Establish network of co-workers

3. Internal and External Reviews  Office of Inspector General Combined Assessment Program (OIG CAP)  Government Accountability Office (GAO)  Joint Commission (JC)  System-wide Ongoing Assessment & Review Strategy (SOARS)  Drug Enforcement Agency (DEA)

4. Reviews of Pharmacy Inventory  OIG Audit of Pharmacy Inventory 2000  OIG Audit OF VA CMOP Inventory Management 2002  GAO Review of Pharmacy Inventory 2004  OIG Audit of VA CMOP Inventory Accountability 2009  OIG Audit of VHA’s Management of Non- Controlled Drugs 2009

5. OIG Audit of Pharmacy Inventory 2000  Findings (from sample of 4 facilities):  Inventories reduced compared to previous system under supply depot system  Inventories at all 4 centers exceeded 10 day supply  None of the facilities had determined stock levels or reorder points based on use  None of the facilities conducted physical inventories  End of year purchases contributed to excess stock

6. OIG Audit of Pharmacy Inventory 2000  Recommendations  VHA issue guidance for inventory reduction  VHA monitor progress in reducing inventories  Provide staff training for inventory management  Discourage using end of year funds for large purchases of stock

7. OIG Audit of VA CMOP Inventory Management 2002  Findings  Supply on hand exceeded benchmarks for 59.9% of items in inventory  CMOP did not effectively monitor stock levels or management item demand  Maintained “cushions” of excess stock  Inventory included items with little or no demand  Estimated $28.8 million in excess inventory

8. OIG Audit of VA CMOP Inventory Management 2002  Recommendations  Require CMOPs to eliminate excess inventory and use automated information to manage inventory  Improve CMOP automated inventory management and control reports  Develop minimum demand for adding new items  Train CMOP staff on inventory management techniques and use of automation

9. OIG Audit of VA CMOP Inventory Management 2002  Recommendations  Ensure CMOPs implement internal controls and security requirements for controlled substances  Monitor CMOP progress in reducing inventories and improving inventory control

10. GAO Review of Pharmacy Inventory 2004  Focused on drugs for return  Findings (6 medical centers):  5 of 6 did not inventory drugs for return  No analytical review of credits  Returned drugs stored in unsecured open bins in 4 of 6 facilities  VA uses an honor system, relying on contractors  VA not aware of company requirements regarding returns (exp dates, etc)  Pharmacy staff claimed not cost effective to monitor (without data to support claim)

11. GAO Review of Pharmacy Inventory 2004  VA Response to GAO  Facilities will maintain a list of drugs held for credit (VISTA Patch PSA*3*51)  Non-controlled drugs for return will be secured  Facilities will periodically test to see if credits received is correct  Network PBM will monitor facility returns  Data will be analyzed for trends  National directive will be published

12. OIG Audit of VA CMOP Inventory Accountability 2009  Findings:  Inadequate wall to wall inventories  Inadequate tracking of dispensing by software  Significant differences between actual and projected on hand inventory  Inadequate control of inventory balance adjustments  Lack of control for drugs held for return  Inadequate separation of duties over critical system functions  Inadequate Econolink system access controls (everyone used same password)

13. OIG Audit of VA CMOP Inventory Accountability 2009  VHA Response  Wall to wall inventories completed quarterly  Each CMOP Director certified compliance with policy for returned drugs  Developed a statement of work to rewrite software to ensure complete tracking of inventory  Developed management policy to review inventory adjustments monthly  Established procedures to restrict one person from ordering, receiving and adjusting inventory  Generic password for Econolink was disabled

14. OIG Audit of VHA Management of Non-Controlled Drugs 2009  Findings (Review of 31 facilities):  Drug dispensing not accurately and consistently recorded (transfer and returns to stock)  State home dispensing  Automatic replenishment/ward stock  Label reprint function used inappropriately to dispense drugs  Drugs returned to stock not accurately captured  Lack of policy to monitor high risk non-controlled drugs  Wall to wall inventory data not used to improve accountability

15. OIG Audit of VHA Management of Non-Controlled Drugs 2009  VHA Response  VHA will identify high risk drugs to monitor  PBM will re-emphasize the importance of tracking all dispensing activity and survey results  PBM will remind staff that drugs that leave pharmacy cannot be returned to stock  Inventory balances must be adjusted for drugs that don’t leave pharmacy and are returned to stock  Access to label reprint will be limited  PBM will develop standardized electronic formats for inventory and hold managers accountable for accuracy

16. SOARS Program  Provide assessment and educational consultation to VA facilities  Support a continuous readiness culture  Help provide quality health services  Assist medical centers with meeting standards of care  Identify and share strong practices

17. SOARS Program  Site visit to each facility every 3 years  ~250 trained SOARS consultants  Training films completed for SPD, Mental Health and Pharmacy  Strong focus on pharmacy and medication management

18. SOARS Trends Report Inventory Related Findings  Based on 136 reviews  Identification, management and security of high cost, look alike-sound alike, high risk and other sensitive drugs (40 sites, 29%)  Pre-labeling, accurate labeling, segregation and security of drugs throughout organization (63 sites, 45%)  Management of controlled substance inventories (13 sites, 9%)

19. Annual Inventory Results YEARInventory Turns 201011.97 20099.15 20089.99 200710.8 200611.07

20. In Summary  Inventory management opportunities cited in numerous internal and external reviews  Reviews identified a lack of training for staff involved in inventory management and drug accountability  Need to improve management of dollars involved in inventory as a tax payer funded organization  Reduce opportunity for theft and diversion  Improve services to veterans

21. Questions

22. Welcome! PBM Drug Accountability Conference