The VA Paid More Than $40 Million in Improper Claims Last Year

The Veterans Benefits Administration inaccurately processed 17,600 of 56,500 claims under a crash, two-month project kicked off in April 2013 to eliminate claims older than 2 years, the Department of Veterans Affairs inspector general reported today.

The rush to get these claims processed resulted in improper payments of $40.4 million. The IG said errors occurred because rating staff “felt pressured to complete these claims within VBA’s 60-day deadline.”

VA reported last June it had processed 97 percent of disability claims backlogged more than two years. This translated to elimination of 65,000 claims from its overall inventory, VA said at the time.

The IG reported the crash project was “less effective than VBA’s existing rating process in providing benefits to veterans quickly.” The IG reported VBA rating staff were supposed to issue provisional ratings for older claims still awaiting medical evidence to back them up.  

“Provisional ratings provided some claims decisions more quickly; however, they did not allow veterans’ compensation benefits to be granted more quickly, “ the IG said. Appeal rights for provisional ratings were also delayed until claims finalization, the IG said.

VBA removed all provisional claims from its pending inventory, despite more work needed to complete them. “This process misrepresented VBA’s actual workload of pending claims and its progress toward eliminating the overall claims backlog,” the IG said.

At the end of June 2013 following completion of the Special Initiative, VBA reported 516,922 rating claims pending in its backlog, but only 1,258 rating claims pending over two years, the IG said, statistics that ignored reality, according to the IG.

“We estimated 6,860 provisional ratings were still waiting for final decisions as of January 2014, 6 months after the Initiative had ended," the IG said. "Because VBA did not ensure existing controls were functioning as needed to effectively identify and manage provisionally rated claims, some veterans may never have received final rating decisions if not for our review."

Allison Hickey, VA undersecretary for benefits, said in a July 10 reply appended to the IG report the purpose of the crash project was to get benefits to veterans quicker and that the process gave them another year to submit medical evidence.

“The final rating process provides further assurance that veterans who received provisional decisions are receiving the benefits they have earned,” Hickey said.

The IG recommended VBA conduct a quality review of all claims processed under the crash program, finalize provisional ratings decisions, and ensure veterans receive full benefits due them. Hickey said VBA concurs and will ensure these recommendations are met by September.