Lack of urgency in fixing problems identified two years ago at the Department of Veterans Affairs cost taxpayers about $232 million last year and could lead to overpayments on disability claims of more than $1 billion by 2015, a House committee was told yesterday.
VA officials have been slow to correct failures and technology shortcomings that led to high error rates in processing temporary disability claims filed by veterans, an issue raised in a January 2011 audit by the agency's inspector general, said Linda Halliday, the assistant IG for audits and investigations.
VA administrators promised at the time to fix the problems by September 2011, but repeatedly pushed back that deadline though December 2012, she told the disability subcommittee of the House Committee on Veterans Affairs. Rep. Jeff Miller, R-FL, is chairman of the committee.
Failures identified in the IG audit last year cost an estimated $232 million in overpayments to veterans who received what was supposed to be temporary assistance while they recovered from illness or injury, Halliday said.
When the audit was issued in 2011, the IG figured it had already cost about $943 million in overpayments since 1993, and would cost $1.1 billion more over five years if left uncorrected.
"VA has not been aggressive enough to effectively address this issue," Halliday said. "After two years, (VA) is still working to complete the national review requirement."
She added that "we are concerned about the lack of urgency in completing this review, which is critical to minimizing the financial risks of making inaccurate benefits payments."
Diana Rubens, VA's deputy under secretary for field operations, said the agency has fixed the problems identified by the inspector general through technology upgrades and better training.
The most troublesome fix was correcting a computer alert system that was supposed to notify claims processors when patients were due for follow-up medical exams to determine if they still qualified for temporary disability payments, Rubens said.
The initial fix did not work, leading to delays in implementation. The corrected notification system has been running since July and is being monitored to ensure all exam dates are being recorded, she said.
"We have fixed those," Rubens said. "The fix is in place."
It's too early to tell whether the changes the agency claims to have made will work, Halliday said. Audits of individual regional offices across the nation continue to show high error rates in processing the temporary disability claims.
New reviews later this year will gauge the effectiveness of the changes, she said.
Temporary payments are available to partially disabled veterans with service-connected conditions that will render them unable to work for a period of time, such as major surgery or chemotherapy.
Since they can't work, they are treated as 100 percent disabled, allowing them to collect the more money from VA until their condition improves.
Claims processors are supposed to monitor the condition of the veterans receiving temporary 100 percent disability to ensure their payments are reduced when they can return to work. But the IG has found workers failed to do so.
Despite claims from Rubens and other VA officials that reforms have been implemented in the last two years, Halliday said ongoing audits of regional offices that process claims still show unacceptably high error rates averaging about 66 percent.
"We have repeatedly identified the same problems in our inspections program," she said. "We continue to identify a high rate of errors in the processing of temporary 100 percent disability ratings. (VA's) efforts to improve accuracy in this area have not been adequate or timely."
Go here for IG audit report on which Halliday's testimony was based.
Mark Flatten is a member of The Washington Examiner's Watchdog reporting team.