VA OIG: Improper overrides on disability claims software cause overpayment
The Veterans Benefits Administration improperly distributed tens of thousands of dollars in disability payments and medical costs due to a dozen overrides of the agency’s claims management software, the VA Office of Inspector General revealed in a report published Wednesday.
The Veterans Benefits Management System for Rating, or VBMS-R, makes rules-based decisions on veteran service-connected disability claims to the VBA, but can be overridden by processors who think it doesn’t accurately reflect the evidence.
While the over $67,000 in erroneous payments is a small fraction of the total $152.5 billion paid to disabled veterans in fiscal 2024, nearly 10,000 overrides weren’t warranted or properly justified between April-September 2024, largely due to requiring reexaminations and using numerous diagnostic codes, the report said.
“Without adequate oversight that includes regular and recurring quality reviews, claims processors do not receive feedback on the accuracy of their override decisions,” it said. “Because no written guidance provides clarity and because oversight with feedback is lacking, it increases the risk that similar actions by claims processors in the future could affect veterans and benefits payments.”
But the processors alone aren’t entirely to blame, it said, as the software has limited oversight functionality for quality teams to review, and there are no laws, regulations, or policies that dictate what an override justification should include.
“The OIG team learned that regional office staff, including managers and quality teams, were not using these tools to conduct reviews or oversight, and some staff did not know these tools existed,” the report said of the software’s oversight functions, calling them “difficult and time-consuming.”
The VBMS-R is supposed to guide processors through several prompts and calculators to correctly rate the disability claim, which can be overridden for five reasons: needing reexaminations, pyramiding or classifying the disability under several diagnostic codes, housebound entitlement, manually changing the calculated rating or the benefits’ effective date.
The OIG found over a third of the reexamination and pyramiding overrides were wrongful, with most not being warranted and the rest insufficiently justified.
In 2021, the VBA said unnecessary reexaminations “are not a demonstration of good stewardship of resources entrusted to VA” and can impact the “efficiency and timeliness of claims processing,” as well as the costs to veterans.
“Some veterans have reported anxiety and fears when receiving [routine future examination] notifications,” the VBA policy letter said. “RFEs can involve invasive medical examinations or cause Veterans to re-experience traumatic events associated with their mental health. Therefore, VA must improve consistency and focus on the intended purpose of RFEs.”
As of Saturday, the VBA has nearly 579,000 total pending claims, with over 72,000 backlogged claims pending for over 125 days. Nearly half are post-9/11 claims.
The OIG recommended the VBA develop guidelines for valid override justifications, a plan for a quality review process and to monitor its effectiveness, identify the business need for an override review tab and requirements for using it if the need is found, and a plan to address the limitations of the aggregate override dashboard.
Though the OIG provided findings and recommendations last year, the VBA “had not yet implemented any changes in policy” by December.
Last month, Principal Deputy Under Secretary for Benefits Margarita Devlin concurred with the recommendations and responded with plans, which included sunsetting the aggregate dashboard.
VBA has responded to the review by developing a new reporting dashboard for overrides, which has a target completion date of Dec. 31.
