Miranda Powell, 28, at her home in Rosslyn, Va. Powell was a Navy corpsman who paid a for-profit company $8,000 to help her increase her disability benefits after she left the military. She says the firm took advantage of her and used predatory tactics. (Ricky Carioti/The Washington Post)
Senators savored the moment on a summer day outside the Capitol — the passage of a sweeping, bipartisan agreement to add $280 billion in new benefits and health care for millions of veterans exposed to toxic burn pits.
More than a year after taking effect, the Honoring our PACT Act has proved enormously popular. This week, President Biden announced that more than 1 million disability claims have been approved under the new law.
But glitches, slowdowns and other mishaps have dogged the program’s rollout by the Department of Veterans Affairs, enabling the growth of an unregulated shadow industry that promises to drastically boost tax-free disability checks, according to lawmakers, advocates and leaders in the claims industry — in exchange for veterans signing away thousands of dollars in future benefits.
Despite a federal law that prohibits charging veterans for help in applying for compensation for wartime injuries, as many as 100 unaccredited, for-profit companies now are making hundreds of millions of dollars, a Washington Post review found. The overwhelmed veterans agency says the government is all but powerless to stop the practice, particularly since Congress years ago stripped criminal penalties from the law. And now a cadre of mostly Republican lawmakers is pushing to do away with the restrictions altogether, a plan bankrolled by a well-funded industry group led by a former high-ranking Trump administration VA official.
Interviews with current and former employees, VA officials and court documents reveal a booming industry that charges veterans anywhere from $5,000 to $20,000 for help filing disability claims that by law should be free. Many former service members are enticed by aggressive online and TV sales pitches from the largely veteran-led groups that promise a success rate of up to 90 percent in boosting benefits.
“It looks like they’re throwing you a lifeline when they’re just taking advantage of you,” said Miranda Powell, 28, a Navy veteran from Topeka, Kan., who paid a claims company $8,000 for helping her win an increase to her disability rating.
The industry says it’s simply educating veterans about how to negotiate a long-troubled VA benefits system and that its services are fully legal since clients ultimately submit their own claims. While government lawyers have sent them numerous notices to cease and desist, the companies argue that the law doesn’t expressly forbid their services.
“VA Claims Insider is an education company. Period,” spokesman Jeff Eller said of one of the industry’s founding companies. Seeking accreditation from VA “would be like a doctor pursuing a law degree or a plumber deciding to get HVAC certified — it doesn’t make any sense.”
Free services provided by Veterans of Foreign Wars, Disabled American Veterans, state and local veterans agencies and other accredited, nonprofit groups have failed to keep up with VA’s cumbersome bureaucracy, the companies say. Industry leaders say that veterans should have a choice to pay for help and don’t get charged if they don’t win compensation.
Jim Hill II, co-founder and chief executive officer for Gainesville, Fla.-based Trajector Medical, which specializes in preparing medical evidence for claims, said the vast majority of his company’s clients have already tried and failed to secure benefits with the help of free groups. “The veterans service organizations have already taken a crack and lost.” His and other firms declined to provide data to support their assertion that they get better results than accredited groups.
But some current and former employees of the firms say they make unrealistic promises and embrace tactics that can put veterans’ claims at risk. Many companies devote minimal time to individual cases, former clients and employees say.
“These companies are incredibly savvy,” said Maureen Elias, a senior benefits official at VA and co-chair of a task force the White House created in December to protect veterans from scams. Veterans “infer that somehow filing through them is going to be more beneficial to them than filing through VA, but they’re misinforming people.”
Experts on veterans benefits say the companies are violating the law by assisting veterans with their claims and taking advantage of VA’s lack of enforcement.
“Each company does it a little differently, but it’s not just giving consulting services. They’re helping them get medical evidence to help with the claim,” said Yelena Duterte, director of the veterans legal clinic at the University of Illinois Chicago School of Law.
With little federal action on the horizon, state legislatures in New York, New Jersey and Maine have banned or restricted for-profit claims companies, and similar bills are pending in at least five other states, prompted by the VFW, which is waging a public battle against the industry. Several law firms representing veterans and accredited claims agents, along with the Texas attorney general, are suing companies for a range of allegedly predatory practices. The VA inspector general’s office also has opened criminal investigations into several firms, officials said, aiming to find a legal way around the agency’s lack of prosecutorial power.
Miranda Powell says she will ask the Veterans of Foreign Wars for help filing another claim for disability benefits under the PACT Act. (Ricky Carioti/The Washington Post)
Caught in the middle are millions of veterans who want the benefits they’re owed under existing law. Powell, now a student activist for veterans at George Washington University, says she is gathering medical evidence to file a claim under the PACT Act for exposure to burn pits off the African coast that may have contributed to two surgeries for polycystic ovary syndrome, a hormonal condition.
But Powell says this time she will get free help from an accredited agent with the VFW.
“Looking back on it I feel dumb,” she said of her experience paying a company, which she declined to name for fear she will be harassed. “They wanted a cut of everything I got. I don’t want to hold onto that shame.”
A rushed rollout
For decades, the military burned waste on many U.S. bases in combat zones abroad, lighting the refuse on fire with jet fuel.
Veterans and their advocates have long pushed the government to recognize links between cancers, bronchial ailments and other illnesses suffered by service members returning from the Gulf War and post-Sept. 11 conflicts and toxic smoke they were exposed to from the burn pits. VA leaders cited a lack of conclusive evidence and staggering costs of care.
But in August 2022, the PACT Act passed the Senate 86-11, after sailing through the House and drawing support from President Biden and comedian and activist Jon Stewart. The law, which recognized 370 conditions linked to toxins dating to the Vietnam era, became the largest expansion of veterans benefits since VA allowed claims for illnesses stemming from Agent Orange in 1991.
The new benefits came amid a larger cultural shift at VA, which for years had faced congressional pressure over long delays and high rejection rates for disability compensation. Under Denis McDonough, who became secretary in 2021, the agency has prioritized greenlighting claims and aggressively pushed veterans to seek benefits. It’s worked: Veterans and survivors filed a record 2.3 million overall claims in fiscal 2023, an increase of 41 percent over 2022, budget data shows.
Since the late 1950s, VA has accredited nonprofit service organizations like the VFW to help veterans apply for benefits. Their services, by law, must be free for initial claims. Many veterans also submit claims on their own.
VA leaders decided in fall 2022 to roll out the new program in four months instead of over multiple years as planned to serve more veterans and speed up benefits delivery. Claims flooded in. As of Tuesday, VA had approved 1 million veterans and survivors for $5.1 billion in disability payments related to toxic exposures and offered free health care to millions of others under the new law.
The ambitious timeline led to speed bumps, though.
The Veterans Benefits Administration, with a record $197 billion budget, brought on 11,300 new employees to process not just toxic exposure claims but also a growth in other disability benefit requests. But training for the new hires fell short, officials acknowledged to lawmakers. The staff was required to work mandatory overtime most months.
The expanding claims led to mistakes, the inspector general’s office found, and the training manual for how to handle newly covered toxic exposures has been revised multiple times, prompting delays and inaccurate decisions, according to union officials.
“People are still learning this,” said David Bump, a quality review specialist in the benefits system and an official with the American Federation of Government Employees, a union representing VA employees. “They waited too long to roll out any training, and it was basic.”
These flaws, along with an outdated processing system relying on manual work, have contributed to a claims backlog that stood at more than 307,000 cases in April. Officials said they are working to improve training and streamline processing.
Still, many veterans who have sought PACT Act benefits and other disability compensation have encountered months of waits and a bureaucracy that can seem impenetrable, creating an opening for claims companies.
“You have a system right now that’s very uneven, and a chokehold around VA to process claims,” said Clayton Simms, a former Marine whose YouTube channel, The CivDiv, teaches veterans about the disability process. “It’s what makes many veterans disgruntled.”
Comedian and activist Jon Stewart hugs Rosie Torres, wife of veteran Le Roy Torres, as they celebrate Senate passage in August 2022 of the PACT Act, major legislation to compensate veterans for toxic exposures. (Jabin Botsford/The Washington Post)
An unaccredited industry flourishes
When Bill Taylor was preparing to retire from the Army a decade ago after deployments to Iraq, Afghanistan and the Balkans, he said he was stunned by the lack of support he found at Fort Bragg, N.C., for departing soldiers wanting to file for disability benefits.
“We quickly saw was there was a gaping need,” he said, a claim that Fort Bragg officials deny.
So in 2018 he co-founded Veterans Guardian — a for-profit company pitching a promise to improve a veteran’s likelihood of securing disability benefits. Since then, dozens of other companies have emerged with similar promises. Of 18 million veterans in the United States, 6 million receive disability compensation, the pitch goes — and “70 to 80 percent of that population is underrated,” Taylor said, meaning these veterans have more severe health ailments than they are receiving compensation for.
But there is a cost: Clients sign contracts that bind them to pay a one-time sum equal to five times their new monthly disability payment or increase, the industry standard. Others go higher; VA Claims Insider, one of the largest firms, charges a fee six times the new payment or increase. The higher the rating, the more profit for the company.
In ads, the companies suggest that veterans prioritize the easiest claims. In a recent YouTube video, VA Claims Insider founder Brian Reese shares the top health conditions that regularly qualify for the biggest disability compensation payments, from post-traumatic stress disorder to chronic fatigue and asthma.
Many clients agree to hand over Social Security numbers and passwords to access VA’s benefits portal, former clients and employees say, so that the veteran technically “submits” the claim, while the company often actually fills out the paperwork.
The unaccredited industry flourished during the coronavirus pandemic, when many accredited veterans groups, which rely on bricks-and-mortar operations, closed their doors.
Then came the PACT Act, which became a perfect sales pitch. Veterans Guardian had 20,000 clients in 2023; it’s on target to serve 40,000 veterans this year, he said. VA Claims Insider’s monthly advertising expenses ran as high as $300,000, said one former executive, who spoke on the condition of anonymity to discuss the firm’s private data. Its first crop of coaches took home millions of dollars a month in commissions, according to three former employees. Eller, the company spokesman, declined to comment on the commissions.
Business was so good at Trajector, with more than 1,000 employees and 50,000 clients projected this year, that the company told the Securities and Exchange Commission in late 2021 that it planned to go public. The filing showed $127 million in revenue in the previous 18 months.
The companies say their strategy is no different from the attorneys accredited by VA to appeal when a claim is denied, who are allowed to collect some of a veteran’s back pay if the appeal is successful. These lawyers have incentive to delay cases to take a larger share, said Taylor and others in the for-profit industry.
The association that represents accredited lawyers, though, says the fees they’re legally permitted to charge are significantly lower than what claims companies take. Diane Boyd Rauber, executive director of the National Organization of Veterans’ Advocates, said Congress allows attorneys to charge for appeals because “the choices a veteran faces become much more complex” than for an initial claim.
VA officials have also told Congress that they conduct rigorous due diligence with the claims agents they accredit. In the past three years, the agency has removed or suspended the accreditation of nearly 15,000 attorneys, claims agents and veterans service groups representatives.
Companies that specialize solely in gathering medical evidence for veterans, like Trajector, also argue that the law doesn’t specifically forbid charging veterans to produce such documentation.
Others in the industry say it represents an existential threat to the VFW and other groups, whose membership decline has thinned resources. “You have to ask yourself, what’s their motive for pointing the finger at us?” Hill said. He accused veterans groups of “actively mobilizing their members to disparage us” by filing complaints about Trajector’s service with the Better Business Bureau.
Some veterans say they got exactly what they signed up for.
“They did more for me in six months than I did in 18 years,” said John Gray, a Gulf War veteran from Temple Hills, Md., who paid Trajector $5,000 and then saw his disability rating boosted to 90 percent from 30 percent for a back injury in the Army and other issues. Gray said he had previously worked with one of the major accredited veterans service organizations years earlier to file a claim, but “it was like they didn’t have the proper skill set.”
He said he is now working with Trajector on a claim under the PACT Act for persistent gastrointestinal issues and referring fellow veterans to the company. “I was fighting VA for years,” he said.
William Mason of Key West, Fla., a coach with Veterans Guardian from 2019 to 2022, said the company is clear with veterans up front that “you can do this for free,” including with a veterans service organization. But, he said of those groups: “God bless them, you kind of get what you paid for.”
False promises
At times, though, the for-profit claims industry did not live up to its promises, with disastrous consequences for some veterans, according to interviews, lawsuits and communications between veterans and the companies.
Former employees of the unaccredited industry say it prioritizes profits and volume over helping veterans.
“I was charging veterans $20,000 who I potentially spent 45 minutes on the phone with,” said a former coach at VA Claims Insider who quit last spring because he felt the job had become unethical. He spoke on the condition of anonymity out of concern he could face retribution from the firm, which he called a “veteran mill,” with most contacts handled by a contract employee in the Philippines.
“It was sales in a sense, and that’s where it got sketchy,” said Christopher Borum of Gilbert, Ariz., who worked as coach for Veterans Guardian for almost three years. “If the companies are doing well, things get overlooked.”
Other former employees said the companies often have an incentive to stretch the truth as they prepare claims, and some recalled veterans being pushed to give the most aggressive possible descriptions of their symptoms to medical professionals to secure larger disability checks.
“It was a cut-and-paste system,” a former manager at VA Claims Insider said of the medical letters, which can cost up to an extra $1,500 across the industry. Veterans are steered toward filing claims for mental health ailments, for which VA tends to award generous ratings.
Veterans’ groups say those practices are damaging to the full benefits system. “When a company comes along that promotes fudging the numbers, it erodes public confidence in the system,” said Ryan Gallucci, the VFW’s executive director.
VA Claims Insider also refers veterans to an affiliated entity operated by the wife of its founder that promises to establish links between their health conditions and military service — for an additional fee. Some former employees say they believe the arrangement is a potential conflict of interest because clients are steered to see its doctors.
Eller, the VA Claims Insider spokesman, called the medical company, Telemedica, a “separate administrative services company” that is part of a “preferred provider network” and said that Brian Reese, VA Claims Insider’s founder, “has never received a penny” for referring clients there. A veteran “can use any service” to obtain a letter and medical exam, Eller said.
Other companies with similar business models have proliferated. They use medical groups specifically established to examine veterans before they submit a claim for disability benefits. The physicals often are cursory and limited to medical record reviews, with no face-to-face exam, former employees say, and can jeopardize legitimate claims by casting suspicions on outside medical letters, critics say. An audit released by the inspector general’s office in January found a “significant” risk of fraud from the questionnaires that veterans submit from private medical providers, with nearly 70 percent of those that it reviewed containing one or more fraud risk indicators.
VA leaders say the claims processing staff has virtually no way to know if a veteran is coached as the industry grows more savvy at removing traces of its involvement in preparing claims.
Veterans also said some companies harassed them for payment, even when they settled their bills and decided to file claims on their own.
“They’re stealing money out of veterans’ mouths, but what they’re doing is negligible,” Abigayle Patterson, a former Army captain who worked as an emergency room nurse in Baghdad’s Green Zone during the Iraq War, said of her experience with Veterans Guardian. Now living in El Paso and working as a disability examiner for a VA contractor, Patterson said the company helped boost her monthly disability check by $619.00 for post-traumatic stress disorder and traumatic brain injury in exchange for a $3,000 fee.
But when Patterson reapplied to VA on her own and won another step up for chronic sinusitis, Veterans Guardian sent her an invoice for both increases, she said. “I put my foot down and told them, ‘I’m not paying you for what I did myself.’” She is now suing Veterans Guardian for several practices she says were predatory.
Spokesman Michael Bova said in an email that the company “cannot comment on broad generalizations and hypotheticals” but said that “based on the example provided it looks like the issue was resolved promptly.”
Other veterans have used the VA’s complaints as the basis to sue for-profit companies. Grant Gallagher, an Air Force veteran from San Antonio, was billed $7,426.00 by Maryland-based Just4Veterans last year after the company helped boost his 90 percent disability rating to 100 percent, according to records provided by Gallagher. He sued the firm, alleging it charged “excessive” fees while not being accredited by VA and used deceptive trade practices. In court filings, the firm says Gallagher breached his contract by failing to pay the full fee. Just4Vets and its attorney did not respond to requests for comment from The Post.
Handcuffed agencies
As the industry has grown, scrutiny and complaints have spread — to the Better Business Bureau, the Texas attorney general, the Federal Trade Commission, state lawmakers and VA’s general counsel’s office. The complaints allege a range of predatory practices, including harassment, threats over money veterans did not owe, and misleading ads.
But even in clear cases of abuse, VA officials said there is little they can do, thanks in part to a decision by Congress in 2006 to remove criminal charges from the law forbidding entities from charging veterans for claims help. It’s unclear what prompted the little-noticed change, which is not mentioned in the transcript of the Senate’s committee report. But it has come to haunt the agency.
“The unintended consequence is, these folks do what they want,” Sen. Jon Tester (D-Mont.), chairman of the Senate Veterans’ Affairs Committee, said of the for-profit claims companies.
VA says it has now opened investigations into almost 40 unaccredited companies since the fiscal year that began in October 2022, and issued letters to about two dozen — including Veterans Guardian, VA Claims Insider and Trajector, directing them to “immediately cease any and all illegal activities.”
“Our message to every Veteran and survivor is this: you don’t have to pay anyone to file a benefits claim,” Josh Jacobs, the undersecretary for benefits, said in a statement.
The industry responded by maintaining that it was providing guidance to veterans and not “helping” with claims. The reality was that the letters had no legal teeth.
In December, following a Texas Tribune story, Texas Attorney General Ken Paxton (R) sued VA Claims Insider, seeking damages and an injunction that would prevent the firm from operating in the veteran-rich state. The firm said it is fighting the lawsuit.
Lawmakers in April 2023 introduced a bipartisan bill with backing from 44 state attorneys general to restore the Justice Department’s authority to seek criminal charges against the firms. VA lawyers have said it would deter bad actors, regardless of what state they operate in.
But the industry mobilized quickly. Investing heavily in Washington lobbyists and campaign contributions — Veterans Guardian spent $804,000 on lobbying last year, public records show — the industry’s biggest players won over a majority of GOP lawmakers on the House and Senate committees that oversee veterans’ affairs. The measure has not yet come up for a vote.
Veterans Guardian also sued New Jersey in November, alleging that the state’s law violates the First Amendment and puts veterans’ benefits at risk.
Late last year, the claims industry formed its first trade association, the National Association for Veteran Rights. Led by Peter O’Rourke, acting VA secretary during the Trump administration, the group is funded by Veterans Guardian and another for-profit company, Veteran Benefits Guide.
“There are bad actors,” O’Rourke told a committee of the Florida legislature in February as he opposed a bill to ban unaccredited companies from the state. “We need to find them, deal with them and clean up that area.”
But he said for-profit companies should be legalized. Republicans introduced a bill last year that seeks a pathway to accreditation for the industry, capping fees at $12,500 for each claim.
The legislative battle has reached a stalemate. The claims staff at VA continues to process disability claims without knowing if they’ve been submitted legally. Trajector withdrew its SEC filing late last year as scrutiny grew, a decision Hill attributed to the falling stock market.
Inspector General Michael Missal’s office, meanwhile, is interviewing witnesses and issuing subpoenas for records in its investigation. That has attracted the interest of senior officials at the Justice Department, according to a person familiar with the probe, which is looking at possible false statements, false medical records and wire fraud. “We are aware of and continue to investigate these schemes,” Missal said in a statement.
VA officials note that if a claim is discovered to be fraudulent, it’s likely to be the veteran — not the company — who will be held liable because its fingerprints are so hard to trace.
Aaron Schaffer, Alice Crites, Razzan Nakhlawi and Monika Mathur contributed to this report.
