NCPA - National Center for Policy Analysis

VA Overpaid Disabled Vets

January 25, 2013

Inspectors say the most stubborn, chronic mistake made by Veterans Affairs (VA) claims examiners while trying to dig their way out of a growing backlog of cases is overcompensating some veterans, says USA Today.

  • The Department of Veterans Affairs overpaid 12,800 veterans $943 million from 1993 to 2009, according to projections by the VA's Office of Inspector General.
  • And if the error isn't corrected, inspector general auditors say another $1.1 billion could be wasted by 2016.

The VA says the projections are significantly overstated, but is fixing the problem. The House Veterans Affairs Committee plans to hold a hearing on the issue in February.

The mistakes occur in a narrow batch of cases where veterans temporarily receive a 100 percent disability rating while undergoing surgery or debilitating treatments and convalescing.

  • Claims examiners have repeatedly failed -- often in two out of three sampled cases -- to seek a follow-up medical exam to determine if the veteran's condition has improved and the temporary 100 percent disability rating should be reduced accordingly, say inspectors.
  • The result is veterans who improve or recover, but receive hundreds of thousands of dollars in compensation over years for a level of disability they no longer have.
  • The 100 percent rating legally bars the VA from recouping overpayments that inspectors say have occurred.

A common error involves cancer treatment where the disease stabilizes or goes into remission. In one case, a veteran who improved after being treated for non-Hodgkin lymphoma was overpaid $237,000 over seven-and-a-half years until the mistake at a Cleveland VA office was caught by inspectors, according to a September report.

  • A January 2011 inspector general audit first projected more than $1 billion would be lost over five years if the temporary disability problem was not fixed, and all 42 regional office inspections since then still show errors.
  • VA claims examiners handled 1.1 million compensation requests last year and took an average of 260 days to complete cases.
  • The VA pays out about $40 billion a year in compensation to veterans for service-connected disabilities.

Source: Gregg Zoroya, "Auditors: Veterans Affairs Overpaid Disabled Vets," USA Today, January 23, 2013.


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