IG: VA Overpays Some Temporary Disability Claims

The Veterans Benefit Administration improperly processed disability claims at its Chicago and Seattle regional offices, leading to hundreds of thousands of dollars in overpayments, the Department of Veterans reported this week.

At the Chicago office, an inspector general’s review found VA staff incorrectly processed 35 of the 89 cases examined by auditors, resulting in overpayments to 11 veterans, totaling $187,000. At the Seattle office, the IG reported 22 cases where staff incorrectly processed cases, resulting in total overpayments of $165,455 there.

Overpayments in both regional offices resulted, in many cases, from mismanagement of temporary 100 percent disability claims, which require re-evaluation after a certain period of time elapses -- up to a year.

At the end of a mandated period of convalescence or treatment, regional office staff must request a follow-up medical examination to help determine whether to continue the veteran’s 100 percent disability evaluation.

To track this, the VBA staff must input “suspense diaries” in VBA’s electronic system -- a processing command that establishes a date for a medical reexamination.

The IG reported the dates for these medical exams slipped, resulting in two veterans with prostate cancer in Chicago receiving checks for 100 percent disability for up to 11 months after their conditions improved. The IG also found two prostate cancer cases in Seattle that took up to ten months to resolve.

In Seattle, the majority of the processing inaccuracies resulted from a lack of oversight, the IG said.  Specifically, the agency didn’t ensure staff took timely action to process reminder notifications for VA reexaminations.

Management in Chicago did not prioritize processing temporary 100 percent disability claims. Their workload management plan did not list these cases as one of the workload priorities, and officials there suggested the IG take the issue up with VBA headquarters.

The IG fired back.

“We disagree,” auditors wrote. “It is a VBA management responsibility to address this issue, which entails millions of dollars in improper payments. Where VBA lacks sufficient staff to properly address its management responsibilities, it should make its case for an increase in full-time equivalents through the normal budget process.”

The IG found fewer errors in the processing of traumatic brain injury. Only one out of 30 cases in Seattle contained an error, and the Chicago office processed all 28 TBI claims the IG examined without any errors.

“We attributed the high accuracy rate to experienced staff, effective communications … and the practice of requesting specific information at the beginning of the VA medical examination process,” the report stated. “Staff we interviewed stated they processed TBI claims daily and had at least three years of experience.”

 The IG recommended both offices review all disability claims rated at the 100 percent level and follow suspense diary policies. Management concurred.