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WASHINGTON — The rise in backlogged claims at the Veterans Benefits Administration is creating concern.

In March 2020, the VBA had 128,000 pending disability claims. Of those, 77,000 were considered “backlogged,” meaning they had been in the system for at least 125 days. As of March 2021, the total number of claims had risen to 357,000, while the number of backlogged claims had risen to 212,000. Legislators and government watchdogs are skeptical that VA has an effective plan in place to bring those numbers back down.

The reason for the excessive growth over 2020 is due in part to VA ceasing in-person compensation and pension (C&P) exams in early April 2020. They did not resume until late May 2020 and then did a slow rollout as facilities began ramping up capability again. C&P exams account for about 75% of VA’s backlog of claims and are relatively complex. They are the initial way through which VA determines service-connection for a veteran’s conditions. It’s not unknown for VBA officials to send C&P exam reports back to the physician in order to get clarification or more information.

Testifying at a House VA Subcommittee on Disability Assistance hearing last month, David McLenachen, executive director of VBA’s Medical Disability Examination Office, said that VA intends to get the number of pending claims down to about 140,000 by the end of the fiscal year. VA lacks a written strategy for doing so, however, which is a concern for the Government Accountability Office (GAO) and the VA Office of Inspector General (OIG), both of which have released reports over the last year criticizing VBA’s handling of the backlog. 

“Our [November 2020] report found VBA lacked a long-term, effective strategy to continue exams at the rate required to maintain a manageable inventory,” explained Brent Aronte, OIG’s deputy inspector general for audits. “VBA should create a written plan that delineates their strategy for reducing inventory and expands the use of secondary methods such as telehealth and ACE (Acceptable Clinical Evidence) exams. A written plan is critical.” 

The lack of a written plan caused problems when VBA ceased in-person C&P exams in April 2020, with VBA staff erroneously denying claims based on veterans not showing up for appointments.

“Our work shows that, for approximately two months, VBA employees were prematurely denying claims in situations where veterans failed to report for that examination,” Aronte explained. “It was not until May of 2020 that VBA provided staff with clear guidance not to deny claims on this basis. Once guidance was issued, we saw a sharp decline in claims being improperly denied.”

McLenachen argued that the pandemic has made a written plan difficult and that creating a set timeline is impossible. 

“This planning we’re discussing is occurring in a very challenging period of time,” he said. “There are a lot of unknown variables. I would love to do regular business planning and forecast out when certain events will happen and when we’ll achieve the goal, but I think my point is that simply stating that we need a plan for when exactly certain events will happen between now and the goal is a very difficult thing to do during the pandemic. Each of our vendors knows what additional capacity they need to add.”

McLenachen added that bringing down the backlog inventory is a relatively routine process, though one that’s been pushed to extremes due to the pandemic. 

“Whenever our inventory increases, we have the same situation,” he explained. “We establish a goal. We know what our receipts are. In this case, we’re not taking down simply a fixed inventory of 212,000 exams. We have monthly receipts exceeding 30,000 that we get every month. We need to increase capacity high enough above receipt level.”

McLenachen also noted that, while VBA will leverage its telehealth and ACE exams as much as possible, they are limited by regulations.

“Most exams have to be done in person,” he explained. “It’s a forensic examination of a disability, as opposed to a treatment visit such as what VHA would do through telehealth.” 

However VBA splits up the exams, Aronte was skeptical that the agency could hit its goal by the end of the fiscal year. 

“I’m not confident that it’s going to happen,” Aronte said. “My fear right now in watching these numbers go up every month [is that VBA] might get into a situation where they’ll be treading water.”

VA Contractors

Most of that increased workload will fall not on VA but on the contractors it hires to perform most of its disability exams. Over the last eight years the number of disability exams completed by non-VA contractors rose from 180,000 to nearly 1.1 million in 2020. This represents $6.8 billion in contracts to private sector providers. According to VA, it’s a price worth paying to keep the benefits backlog in check and free up VHA staff to treat veterans. 

However, this reliance on contractors also has been deeply criticized in the past. Several GAO reports over the last few years have found lax regulations when it comes to tracking the training of contract physicians and ensuring the quality of their exam reports.

VBA has not analyzed its data to identify patterns and trends in contractor performance or created a system to verify that all contractors have taken required training, explained Elizabeth Curda, GAO’s director of education, workforce and income security.

Of particular concern are contractors’ ability to deal with more complex disability claims, such as those involving Gulf War illness, traumatic brain injury and military sexual trauma. GAO found that these exam reports are returned at twice the rate of others for correction or clarification.  

“Until the last year, VBA contract examiners were not allowed to deal with [these] complex claims. More recently these kind of claims have been opened up [to contractors],” Curda told legislators. “We’ve heard from VHA examiners that these types of claims can be complex to complete the reports, and the claims processors we spoke to at VBA said they can find this kind of medical evidence challenging.”

In the past, such complex claims were left to VHA examiners. VBA has said they intend to keep a portion of their disability examinations in-house. However, Curda noted there’s no written plan for determining this balance and that some facilities already rely solely on contractors. 

“It’s unclear to us whether the shift in exams is due to a VA-wide strategy or the decisions of individual medical centers seeking to reduce their exam workloads,” Curda said. “At least two medical centers we interviewed had transferred all of their workloads.”