VA claim errors result in $100 million in incorrect payments: watchdog

Mistakes by employees at the Department of Veterans Affairs while processing claims for veterans rated as 100% disabled resulted in around $100 million in improper monthly compensation payments, according to a July report from the VA Office of Inspector General.

The roughly $9.8 million in overpayments and about $84.7 million in underpayments to impacted veterans occurred as a result of claims processors not consistently following policies and procedures, the report said.

A rating of 100% for compensation may be assigned even when the overall disability rating is less than 100%, but the veteran is considered to be unable to get and maintain a job due to service-connected disabilities, the report noted.

The watchdog team reviewed statistical samples and estimated that 74% of claims granted for those with that disability compensation rating, and 76% of those denied, between May 2022 and April 2023 had at least one claims processing error.

Whether the Veterans Benefits Administration, the department’s agency which handles the complex financial disbursements, is processing veterans’ claims effectively enough served as the subject of a House panel meeting last week.

“We have taken corrective action on 95% of all of the cases identified in that report. We should have the remainder done here shortly,” Ronald Burke Jr., the deputy undersecretary for policy and oversight at VBA, said during the hearing.

The VA watchdog report made several recommendations to improve accuracy in individual unemployability claims decisions, including updating guidance, enhancing information systems, improving training and evaluating workload distribution.

Since the COVID-19 pandemic, in-person training has been replaced with virtual training that does not provide the tools needed for processors to succeed, according to Linda Parker-Cooks, from the union American Federation of Government Employees.

Rep. Chris Pappas, D-N.H., said during the hearing that many VA processors were hired to assist in response to high demand with processing claims as a result of the Promise to Address Comprehensive Toxics Act — better known as the PACT Act — that was signed into law in 2022 and expanded veterans’ eligibility for disability benefits related to injuries from toxic exposure.

A July report from the Government Accountability Office found that training for claims processors at the VA needs to be enhanced. It noted that in fiscal year 2023, VBA processed over 2.2 million claims for disability compensation and provided about $136 billion in benefits to veterans with service-connected disabilities. However, it had not fully implemented some of the recommendations the government watchdog had made a few years prior.

Elizabeth Curda, from the GAO, said during the hearing that “an effective training program is needed to one: help new claims processors become fully proficient, and two: for seasoned staff to maintain their knowledge and skills in an ever-changing complex environment.”

Burke acknowledged that there is room for improvement.

“We’ve asked ourselves, ‘What can we do better? How can we better prepare our claims processors?’”