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VA overpaid disabled vets by up to $1.1B

Feb. 5, 2013 - 04:47PM   |   Last Updated: Feb. 5, 2013 - 04:47PM  |  
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In a reversal of normal complaints about the Veterans Affairs Department being too slow to pay disabled veterans, a House subcommittee is investigating overpayments to veterans who were temporarily rated 100 percent disabled but were not reevaluated to see if their conditions improved.

The loss to the government could be as much as $1.1 billion, according to VA auditors, who estimate the 27,500 veterans were not properly re-evaluated.

Rep. Jon Runyan, R-N.J., chairman of the House Veterans Affairs Committee's disability assistance panel, said the "unacceptable" problem needs to be fixed especially now, when federal spending is tight.

VA policies allow 100 percent disability ratings to be assigned to veterans undergoing surgery or some other treatment that prohibits them from working, making them eligible for disability compensation. When their treatment or recovery period ends, a follow-up medical examination is supposed to be requested to determine if they still have any disability for which they should continue to receive compensation.

Disability pay can be up to $3,214 a month at current rates for a veteran with a 100 percent rating.

In some cases, such as a double amputee, there is no doubt about a veteran's continued disability. But such clear-cut cases make up only about 24 percent of the total number of temporary disabilities, according to Linda Halliday, assistant director for audits and evaluations for the VA inspector general.

The IG found no regional office within VA that fully followed established policies requiring reevaluations. Error rates were as high as 100 percent in Wyoming. The "best" regional offices, in Lincoln, Neb., and Des Moines, had an error rate of 27 percent.

"We are concerned about the lack of urgency," Halliday said.

Diana Rubens, VA's deputy undersecretary for field operations, said steps have been taken to stop the errors by fixing glitches that prevented employees from receiving reminders when reexaminations were required. New software has been designed, training for employees is being modified and there is a temporary process for manually putting a reevaluation date into veterans' records, with a backup review to ensure there is an exam scheduled for those with temporary ratings.

Rubens said the problem may not be as large as the auditors suggest, noting the Veterans Benefits Administration believes the 15 percent error rate "is overstated." Under her calculation, the rate would be about 11.5 percent.

Runyan isn't convinced, saying that while VA claims the software glitch has been repaired, new audits of regional offices show problems continue. Human error, he said, appears to be part of the problem.

Veterans' groups see the overpayments as part of a larger problem with claims processing. Rick Weidman, executive director for policy and government affairs for Vietnam Veterans of America, said the cause is the same. "It is clear that the same issue we have been pressing on for some years lack of management oversight is the problem that causes the failure to correct procedures," he said.

When overpayments are discovered, a veteran is required to return the money, although repayment may be waived.

"Overpayment can be more devastating than never having received it in the first place" because veterans have problems paying it back, Weidman said.

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