Do not believe the hype on this one – VA reported $1.1 billion in improper payments to veterans – by “improper” VA OIG does not mean wrong. That means, while true, the game here is hype plus semantics.
This shocking claim from VA OIG’s new report does not mean these payments went to undeserving veterans. It merely means VA did not dot every “i” and cross every “t” for normal payments or overpayments or underpayments.
Let me explain. When I read the headline and first sentence in a newsletter VA sent me, I thought, “Wow, $1 billion in payments were made to veterans who did not deserve the money.” And how could I not think this when the first sentence started off, “VA reported $1.1 billion in improper payments…” However, that is not what the report really says.
What I learned was that VA lumped together all payments, including overpayments and underpayments, into the same totals. VA waited until the appendix to explain that little detail, but I guarantee that Veterans Benefits Haters will hail the VA OIG report as a red flag indicating VA benefits should be cut.
Here is what you need to know.
VA followed an Office of Management and Budget (OMB) circular’s definition in conducting this evaluation. There, OMB mandated defining potentially correct payments to deserving veterans as “improper” based on a variety of things. For example, if VA did not follow the regulations to the letter, even deserved payments must be labeled improper by VA’s simple application of the rules. However, OMB goes a step further, and VA seems to gloss over a detail or two while explaining its findings until the end of the report.
Here is the full OMB Circular A-123 Appendix C definition per VA:
Incorrect amounts are overpayments and underpayments that are made to eligible recipients (including inappropriate denials of payment or service, any payment that does not account for credit for applicable discounts, payments that are for the incorrect amount, and duplicate payments). An improper payment also includes any payment that was made to an ineligible recipient or for an ineligible good or service, or payments for goods services not received (except for such payments authorized by law). In addition, when an agency’s review is unable to discern whether a payment is proper because of insufficient or lack of documentation, this payment must also be considered an improper payment.
What concerns me about this report is that the Department of Veterans Affairs is disseminating VA OIG reports that could mislead casual readers with irresponsible headlines. You know, these are the readers who only read the headline and first paragraph, ie the majority of Americans.
I guarantee you will see a few talking heads on TV talk about how they believe the US should cut veterans benefits.
Yet, I still waiting to see is a report from VA OIG that documents the lack of value taxpayers get in exchange for the billions VA pays to major government contractors every year. Now that would be an amazing read.
In addition to my main semantic gripe about the title and lead paragraph, within the report, some of the conclusions may be a little looser than one would expect.
For example, when describing Compensation overpayments, VA OIG merely extrapolated an overall guess of what the total improper payments are based on a sample. The report claimed that 10 percent of the sample received improper payments.
The term “improper” is defined for VA OIG by the Office of Management and Budget (OMB) as meaning, “when an agency’s review is unable to discern whether a payment was proper as a result of insufficient or a lack of documentation, this payment must be considered an improper payment.” Specifically, the report may have classified correct payments to deserving veterans as “improper” based on semantics.
Further, VA’s focus on Compensation highlighted only a few instances of payments made where VA did not cross a “t”. This means the inspection is more concerned with semantics than with giving Americans a firm understanding of VA’s regulatory problems.
Here is part of what led to that terribly deceptive headline. While reading this, ask yourself if you think the guts of the report justifies the title:
VBA underreported improper payments for its Compensation program. From VBA’s sample of 400 Compensation payments, the OIG reviewed 21 payments related to temporary 100 percent disability evaluations or traumatic brain injury claims. Of the 21 payments reviewed, we identified two related to temporary 100 percent disability evaluations that lacked routine medical examinations required to support veterans’ benefits.
Specifically, VBA policy requires a temporary 100 percent disability evaluation for a service-connected disability following a veteran’s surgery or when specific treatment is needed. At the end of a mandated period of convalescence or treatment, VA Regional Office staff must request a follow-up medical examination to help determine whether to continue the veteran’s 100 percent disability evaluation. VBA did not count the two payments discussed above as improper payments. However, according to OMB Circular A-123, Appendix C, when an agency’s review is unable to discern whether a payment was proper as a result of insufficient or a lack of documentation, this payment must be considered an improper payment.
VBA’s test procedures for the Compensation program did not include a step to check for the medical examinations required to support temporary 100 percent disability evaluations. We recalculated VBA’s improper payment estimate for the Compensation program to include the two additional improper payments. Consequently, the estimate increased from approximately $321 million to $565 million. The improper payment rate also increased from 0.67 percent to 1.17 percent. By the time of our review, a subsequent examination had been completed but a decision was still pending for one claim. An examination had not been completed for the other claim.
Do you think VA can properly claim $565 million in improper payments based on a mere sample of 400 veterans? Check out this chart on the overall payouts VA OIG evaluated: