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VA Whistleblower Highlights Billions In Illegal Healthcare Spending, Met With Abuse

Jan R. Frye, deputy assistant secretary for acquisition and logistics at the Department of Veterans Affairs broke the silence on billions spent illegally to purchase non-VA health care Monday.

Like other whistleblowers, Frye has suffered retaliation. According to Frye’s testimony, as recently as last Friday, deputy secretary Sloan Gibson decided to take his disclosure personally during a meeting.

“His demeanor and actions in both an open and one-on-one meeting were clearly meant to intimidate me, and to cast a chill over me and others who might be tempted to report violations in the future,” Frye told the House Committee on Veterans’ Affairs.

Frye has a history of whistleblowing and continues to bring to light illegal practices. In May, he exposed the illicit use of purchase cards to spend billions of dollars in violation of federal law. (RELATED: VA Whistleblower Sheds Light On Billions Spent In Violation Of Federal Law)

The latest set of violations involves the procurement of non-VA healthcare, which veterans can currently receive for certain medical services classified as “infrequent” because of low demand. The way in which this healthcare is supposed to be procured is through the use of contracts in adherence with Federal Acquisition Regulation (FAR) and Veterans Affairs Acquisition Regulation (VAAR).

After years of digging, Frye discovered the VA has allowed individual authorizations for 30 years without using FAR, a practice admitted by Edward Murray, the department’s interim chief financial officer, at the hearing.

“Many Veterans receive care under individual authorizations…Because small practices and individual providers of health services would not be willing to enter into complex procurement contracts just to treat one veteran, it is likely that veterans will be deprived of care that is best for them,” Murray stated as justification.

For Frye, the avoidance of proper contracting procedures isn’t just a technicality. In the absence of contracts, patient safety is no longer a legal requirement. Moreover, contracts help to limit cronyism and the procurement of services from firms employing former VA officials.

The trouble began in late 2012 when a VA official approached Frye and informed him the department had been regularly violating the law with regards to purchasing non-VA care. When Frye pressed the official for more details, he declined, leading Frye to start an investigation of his own. His first official letter to the same official at the Veterans Health Administration received no response.

His second letter in December 2012 to a senior executive from the Office of General Counsel asking for a legal opinion on the matter of individual authorizations for non-VA care also received no response.

After two more letters, the Office of General Counsel finally sent Frye an opinion on the issue from Sept. 10, 2009, which stated concretely that non-VA Fee Basis Care is FAR-based. No authority exists for the procurement of non-VA care aside from FAR procedures.

“You may wonder why, as VA’s Senior Procurement Executive, I had never previously seen this legal opinion, and why there was such obvious reluctance to provide it to me,” Frye stated. “That is an enigma.”

More complaints to the office of the inspector general in 2013 went unanswered. At first, Frye’s complaint was refused and his motives questioned. Perseverance was the only reason why the inspector general reluctantly accepted the complaint, but whether an investigation followed is unclear.

In an effort to clamp down on the discussion, the VA Senior Assessment Team voted in April 2014 to shut down further discussion on the matter, with Frye’s vote as the only dissenting voice.

Then, in July 2014, Frye reports he was threatened and coerced to authorize additional illegal actions in a meeting run by the VA chief of staff.

The issue is ongoing.

Despite years of opportunity to correct confusion and discrepancies surrounding the interpretation of non-VA procurement law, senior executives haven’t lifted a finger to conduct an investigation.

“We obviously do not intend to admit our collective failures in leadership and stewardship of public funds,” Frye told the committee.

“We have lost our way,” Frye added. “Senior leaders are required to obey and enforce Federal laws.  Our actions and inactions do not fit anything I have previously experienced in over 40 years as a Military Officer and civilian public servant.”

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