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Fast tracking claims helped Veterans Affairs backlog stats but hurt disabled vets, inspector general finds

A sign marks the entrance to the Edward Hines Jr. VA Hospital on May 30, 2014 in Hines, Ill. (Photo by Scott Olson/Getty Images)

Fast-tracking the oldest claims for disability benefits at the Department of Veterans Affairs forced veterans to wait longer to resolve their cases, but falsely made the agency's statistics look better, the VA's inspector general said in a report issued Monday.

Department claims raters also have been accused of using paperwork tricks to improve their productivity numbers, including putting in the wrong origination dates on claims, cherry-picking easy cases and leaving the harder ones to linger, or simply ignoring bins full of critical documents for years, according to Linda Halliday, assistant inspector general for audits and evaluations at VA.

The latest investigation into how disability claims are processed echoes similar reports that bogus appointment lists were kept at VA medical facilities as part of a “systemic” nationwide effort to hide long delays in delivering health care. The IG is investigating potential manipulation of medical waiting lists in about 70 VA facilities nationwide.

Though processing disability claims and providing medical services fall under two different divisions within VA, both have been caught manipulating data to hide backlogs.

How the VA processes disability claims and whether agency administrators are deliberately “cooking the books” will be the topic of a House Committee on Veterans Affairs hearing Monday night.

The Washington Examiner has reported for more than a year that veterans seeking disability compensation for service-connected conditions faced long delays just to get an initial rating from VA.

A five-part Examiner series published in February 2013 documented longstanding tricks that were used to make it appear those claims were being processed quicker and with fewer mistakes than they actually were.

The new report from the IG focuses on an initiative launched by VA in April 2013 to resolve the nearly 43,000 claims that were at least two years old at the time.

Those cases were given top priority and were to be rated within 60 days based on the information in the files.

If there was enough evidence to provide maximum compensation for claimed conditions, the case could be finalized.

If additional information was needed, such as medical records from a private physician, the claim was given a “provisional” rating based on the available documents.

The veteran could not appeal a provisional rating until it became final. However, once a provisional rating was made, the case was no longer counted in the backlog.

So, while issuing a provisional rating reduced the agency's reported backlog, and cleared the older cases out of the system, the veteran still did not have a final decision and, consequently, did not receive benefits.

Worse, since the case was no longer counted in the backlog, there was no incentive for officials in the Veterans Benefits Administration to do the additional work necessary to finalize the claim, which would result in the veteran being paid or at least being able to appeal, according to the IG.

Ultimately, the veterans in those cases would have been better off if their claims had been processed through normal procedures rather than under the fast-tracked process for the two-year-old claims, the IG concluded.

“The Special Initiative rating process was less effective than VBA’s existing rating process in providing benefits to veterans quickly,” the IG report said.

“Further, VBA removed all provisional claims from its pending inventory, despite more work being needed to complete them. This process misrepresented VBA’s actual workload of pending claims and its progress toward eliminating the overall claims backlog,” the report said.

About 7,800 provisionally rated two-year-old claims have been removed from the official agency backlog, yet have not received a final rating, according to IG estimates.

Mistakes were found in about 32 percent of the fast-tracked cases reviewed by the IG. That indicates about 17,600 claims had errors, resulting in an estimated $40.4 million in improper payments, according to the report.

The initiative on two-year-old claims ended in June 2013.

Claims are considered backlogged if they are older than 125 days. The agency is under pressure to ensure all cases receive an initial rating within that deadline with 98 percent accuracy by 2015.

Currently about half of the pending cases are considered backlogged.

Halliday said in written testimony for the House hearing that her office has investigated other reports of “cooking the books” raised by whistleblowers.

Alleged scams include entering the wrong origination dates on claims, thereby making them appear newer than they really are; hand-picking simple cases that can be processed quicker, which improves productivity numbers; or destroying records needed to process claims.

In Philadelphia, IG investigators found mail bins full of claims and other documents that had not been scanned into the electronic records system since 2011, Halliday said in written testimony.

Halliday and Allison Hickey, under secretary for benefits, are scheduled to testify at the House hearing.