Department of Veterans Affairs 

VHA DIRECTIVE 2006-029

Veterans Health Administration 

Washington, DC 20420 

May 15, 2006



 

SPECIFIC PURPOSE FUNDING FOR PROSTHETICS 

 

1. PURPOSE: This Veterans Health Administration (VHA) Directive provides the procedures 
for managing Specific Purpose funding of the Prosthetics Program. 

 

2. BACKGROUND 

 

 a. Prosthetics is a VHA Special Emphasis program and serves almost a quarter of the unique 
Social Security Numbers (SSNs) in VHA. As a result of Eligibility Reform in 1996, prosthetics 
workload and expenditures have increased dramatically each subsequent year. Prior to 1998, 
prosthetics funding was earmarked as specific purpose. In 1998, it was the decision of the 
Department of Veterans Affairs Central Office to place the funding for the Prosthetics Program 
under General Purpose funds. As a result of this change, the level of care and the timely 
delivery of prosthetic appliances and services decreased significantly. For this reason, the Under 
Secretary for Health issued a memorandum on October 2, 2000, mandating that funding for 
prosthetics would once again be placed under Specific Purpose funding, effective Fiscal Year 
(FY) 2001. 

 

 b. VHA recently approved the merger of Prosthetics and Sensory Aids Service and the 
Office of Clinical Logistics at the Central Office level; however, Specific Purpose funding for 
Prosthetics must not be affected by the merger of the two offices, and it must continue to be a 
mainstay in providing prosthetic devices and services to our veterans. 

 

3. POLICY: It is VHA policy that prosthetics funding fall under Specific Purpose funding. 

 

4. ACTION 

 

 a. VHA Chief Financial Officer (CFO). VHA CFOs are responsible for: 

 

 (1) Collaborating with the Prosthetics and Clinical Logistics Office to set aside adequate 
Specific Purpose funding for Prosthetics. 

 

 (2) Assisting the Prosthetics and Clinical Logistics Office in monitoring obligations and 
expenditures throughout the course of the year, and assisting in reviewing the roll up of these 
financial measures in each network. 

 

 (3) Assisting the Prosthetics and Clinical Logistics Office in transferring funds between 
networks if analysis by the Prosthetic Resource Utilization Workgroup (PRUW) determines such 
action is needed. 

 

 b. The Prosthetics and Clinical Logistics Office. The Prosthetics and Clinical Logistics 
Office is responsible for: 

 

 (1) Collaborating with the VHA CFO office to: 

 

 

THIS VHA DIRECTIVE EXPIRES MAY 31, 2011 


 

 (a) Identify system-wide prosthetic funding needs for the Prosthetics Program. 

 

 (b) Develop a national budget. 

 

 (2) Through PRUW, developing Veterans Integrated Services Network (VISN)-specific 
allocations for prosthetics. 

 

 (3) Collaborating with the VHA CFO Office, the VISN CFOs, and the VISN Prosthetics 
Representatives (VPRs) to recommend facility-level allocations for prosthetics funding. 

 

 (4) Continual monitoring and oversight of the prosthetic budget by continuing the PRUW. 
The characteristics of the current membership are to be maintained (VA Central Office 
Prosthetics, VA Central Office Finance, VISN CFO, VPRs, etc.). Representatives from other 
offices may be added, as necessary. 

 

 (5) Determining if a reserve must be held in VA Central Office at the start of the new fiscal 
year and work in concert with the PRUW to determine how the reserve (if applicable) needs to be 
distributed. 

 

 (6) Providing the equipment if a facility referral results in a prescription for an appliance by 
the prescribing facility’s Prosthetic Treatment Center or Prosthetic Service unless arrangements 
between the affected VPRs have been made. The most efficient, cost-effective method of 
procurement must be employed to ensure the continuum of care for the patient is not 
compromised (i.e., a hospital bed that may be available for delivery from referral site’s contract 
vendor may be the best source in filling an order than having the prescribing facility order and/or 
ship across VISN lines). If a facility referral results in a surgical procedure involving any type of 
Prosthetic implant, the facility performing the surgery is responsible for the cost of the 
implant(s). 

 

 c. The Prosthetic Resource Utilization Workgroup (PRUW). The PRUW is responsible 
for: 

 

 (1) Providing reports of findings, conclusions, and recommendations to the Chief Prosthetics 
and Clinical Logistics Officer on issues related to resource utilization in the prosthetics 
programs. 

 

 (2) Continuing production of a scorecard that measures VISN prosthetic budget management 
efficiencies and compliance with national contracts. 

 

 (3) Providing advice and assistance to the Prosthetics and Clinical Logistics Office in the 
development of VISN level prosthetics budgets. 

 

 d. The Veterans Integrated Service Network (VISN). The VISNs are responsible for: 

 

 (1) Funding all prosthetic needs from Specific Purpose prosthetic funds. VISNs must retain the 
responsibility for funding any additional needs from General Purpose funding, if necessary. The 
prosthetic orders must not be delayed for a lack of funds. 


 

 (2) Ensuring accurate prosthetics data input throughout the VISN by: 

 

 (a) Entering all prosthetic orders into the National Prosthetic Patient Database (NPPD), i.e., 
surgical implants, audiology, etc. 

 

 (b) Ensuring appropriate use of prosthetic cost centers and budget object codes. 

 

 (c) Managing inventory through the Prosthetic Inventory Package (PIP) to maximize 
appropriate resource utilization. 

 

 e. VISN Prosthetics Representatives (VPR) and VISN CFOs. VPRs and VISN CFOs share 
responsibility for: 

 

 (1) Monitoring and oversight of the prosthetics budget in the network. 

 

 (2) Developing facility-level distributions for prosthetics based on the VISN allocation, 
including providing training to network prosthetics and fiscal staffs on the use of fiscal accounts for 
prosthetics. 

 

5. REFERENCES: PRUW Charter dated October 16, 2000, signed by Frederick Downs, Jr., 
Chief Consultant, Prosthetics and Sensory Aids Strategic Healthcare Group, and the Specific 
Purpose Funding Memo dated October 2, 2000, signed by the Under Secretary for Health. 

 

6. FOLLOW-UP RESPONSIBILITY: The Chief Prosthetics and Clinical Logistics Officer 
(10FP) and the Chief Financial Officer (17) are jointly responsible for the contents of this 
Directive. Questions may be referred to the Chief Prosthetics and Clinical Logistics Officer at 
202-254-0440. 

 

7. RESCISSIONS: VHA Directive 2001-008 dated February 14, 2001, is rescinded. This 
VHA Directive expires May 31, 2011. 

 

 

 

 

 

 

 

Jonathan B. Perlin, MD, PhD, MSHA, FACP 

 

Under Secretary for Health 



 

DISTRIBUTION: 

CO: 

E-mailed 5/17/2006 

 

FLD: 

VISN, MA, DO, OC, OCRO, and 200 - E-mailed 5/17/2006