Report: VA may have overpaid disabled vets by $1 billion
January 26, 2011
WASHINGTON — Poor oversight and missing medical follow-ups led to nearly $1 billion in overpayments in veterans disability benefits over the last 18 years, and could lead to another $1 billion in improper payouts in the near future if left unchecked, according to a new investigation.
The report, from the Department of Veterans Affairs Office of the Inspector General, found mistakes in the processing of an estimated 27,500 cases before the Veterans Benefits Administration, resulting in individuals receiving a 100 percent disabled rating for years longer than they should have.
“Despite numerous audit and inspection reports since FY 2004 stating that the staff was not consistently processing temporary 100 percent disability evaluations correctly, VBA has not fully corrected the problem,” the report stated. “If VBA does not take timely corrective action, they will overpay veterans a projected $1.1 billion over the next 5 years.”
At issue are temporary 100 percent disability ratings, given to veterans with service-connected disabilities requiring surgery, convalescence or specific treatment. In some cases, those payouts may be reduced or ended after veterans recover and are able to return to work.
IG officials found that in nearly half of the problem cases, officials simply forgot to schedule follow-up medical visits or update related paperwork, allowing veterans to continue their full payout even after recovery. In about 6,500 cases, those medical exams were delayed or canceled, causing the payouts to continue.
Researchers said the average overpayment for veterans receiving extra benefits for less than a year was about $10,500, but rises to about $66,000 for veterans receiving overpayments for one to five years.
“For each year the overpayment continues, the cumulative financial effect becomes increasingly more significant,” the report said.
Benefits officials disputed the findings, calling the cost estimates and total number of problem cases exaggerated.
“VBA makes every effort to ensure that veterans are paid correctly and disability evaluations are assigned appropriately at all levels,” Michael Walcoff, acting VA Under Secretary for Benefits, said in a statement to the IG office. “VBA is actively working to resolve these types of errors through system modifications. These system safeguards will ensure correct future review of temporary 100 percent evaluations.”
In a statement to Stars and Stripes, Tom Murphy, Director of the Compensation and Pension Service, said the VBA is committed to making sure veterans receive the proper disability benefits.
“VBA modified training for claims processors to ensure timely oversight responsibilities are completed,” he said. “Further training on evaluating evidence to determine permanency for a total evaluation is also being created.
The report does not recommend the VBA attempt to recoup any of the overpayments, but does urge a review of all 100 percent disability claims to ensure that proper payouts are being awarded. In cases where the mistakes have lingered for more than 20 years, the VA by law cannot change the disability ratings.
Murphy said the department will follow that recommendation “to ensure the appropriate evaluations are assigned and oversight controls are properly established.”
Veterans groups said they’ll keep a close eye on the issue.
“While there may be some veterans receiving an overpayment, our biggest concern is the 325,000 veterans who have waited more than 125 days to get their foot in the door,” AMVETS spokesman Ryan Gallucci said, referencing the current VA benefits backlog. “That said, this may be an indication of a system that’s flawed, and is not treating all veterans equally.”