Agencies

VA: Oversight Improving for Questionable Contracted Disability Exams

by Stephen Spotswood

January 21, 2019

WASHINGTON–A recent audit by the Government Accountability Office has lawmakers and veterans service organizations frustrated with the Veterans Benefits Administration’s inability to track the quality of work done by outside contractors and concerned that veterans have not been receiving accurate disability ratings.

While the agency admitted fault to all the criticisms found in the audit, VBA officials’ assured legislators that the issues that led to these concerns have been resolved and that the agency now has a handle on the problem.

“About half of all veterans’ disability examinations are performed by contracted vendors instead of VA,” Rep. Mike Bost (R-Ill.) chairman of the House VA Subcommittee on Disability Assistance and Memorial Affairs noted at a hearing last month. “And none are regularly meeting VA’s quality goal of 92%. GAO reports that quality scores for contracts ranges from 62-92%. This raises the question of whether veterans are getting correct decisions and if their exams are accurate. I’m also frustrated that GAO found that VBA did not accurately measure whether contractors are meeting timeliness goals. Providing exams within a reasonable timeframe is very important. Unnecessary delays force veterans to wait longer for decisions and increases the backlog. … It’s unfair for veterans and taxpayers to pay the price for a mismanaged program.”

Prior to 1996, all disability examinations were conducted by VA physicians. Incited by an increase in examinations that outpaced VA’s internal capacity, Congress passed a law that year giving the agency the ability to contract with outside vendors. The law initially limited the use of these contracts to 10 regional offices. That expanded to 12 in FY2015, 15 in FY2016, and as many regional offices as the VA Secretary considers appropriate beginning in FY2017.

In 2016, VA awarded 12 disability exam contracts worth as much as $6.8 billion to five private firms. The GAO report released in October shows that VBA has lacked the ability to assess both quality and timeliness of the exams conducted by those firms from January 2017 to February 2018. Data looking at quality metrics for the second half of 2017 was unavailable because VBA was behind in conducting quality reviews for exams completed during that time period.

Regarding the lack of timeliness data, VBA officials told committee members that the exam management system the agency had been using until spring 2018 did not always retain the initial exam completion date. Beginning in spring 2018, VBA implemented a new system designed to capture all exam dates but was still working to resolve technical issues at the time GAO completed its report. VBA officials also admitted that the previous system had been unable to track exams that needed corrections or clarifications, information needed for VBA to judge quality and penalize contractors if necessary.

“Overall, we found that VBA was not prepared to oversee the contractors,” explained Elizabeth Curda, GAO’s director of Education, Workforce, and Income Security, at the hearing. “Early on we found that some contractors did not have the capacity to do the exams that were assigned to them, and so exams had to be reassigned. There were problems with the quality of exams, and the systems the VA was using could not provide timely quality information.”

Asked by committee members why they expanded a program before they had a system in place to adequately evaluate it, VBA officials placed much of the blame on delays caused by protests to their 2016 contracts by companies who had not been awarded contracts. While the preliminary work on the IT system overseeing contract vendors was completed on schedule, protest-related delays kept VBA from partnering with vendors to test the system before putting it into use.

“The protests in 2016 put us under a stop work order. That stop work order hindered our ability to work with these vendors to test adequately and get the system on track in time,” explained Beth Murphy, VBA’s compensation service director. “The protests are behind us; the systems are in place; and we’re well-poised to do this appropriately, going forward.”  

VBA officials stressed that no claims were directly affected by these issues and that claims that were not being swiftly and accurately assigned to vendors were assigned manually by VBA employees.

VBA officials also assured legislators that, should another hearing be called in six months, GAO would find that these issues had been resolved and that VBA will have data needed to properly assess vendor performance. On the day of the day of the committee hearing, VBA submitted new contracts for 2018—ones which they say have been improved using the lessons of the last two years. The new contracts include incentives and disincentives for quality and timeliness–both of which VBA says they will be able to monitor effectively in the future.

“With these new contracts, we all believe we’re in a good place, going forward,” said Phillip Christy, VA’s executive director, Office of Acquisitions, Logistics and Construction. “I can’t pull back what happened, and there will be challenges if the [audit] data we get back is not favorable.”

Veterans service organization representatives shared legislators’ concerns, and a certain amount of skepticism that a fully operational management system would solve all of the problems surrounding contract vendors.

“VA cannot sacrifice accuracy and a positive customer experience for the sake of speed. It does not matter how quickly a veteran receives a rating decision from VA if the decision is wrong,” said Michael Figlioli, VFW deputy director, in his written statement to the subcommittee.

According to Figlioli, the VFW has received reports of veterans being notified late of exams, a lack of options to reschedule exams, a lack of availability of examiners within reasonable distance, inadequate reviews by examiners of veterans’ claims prior to the exam and inadequate time with the provider due to high volume and the desire for a quick turnaround.

“VA has a unique opportunity now as it seeks to enter into a new contract [with vendors],” Figlioli declared. “The new contract must factor in veteran experience, measure quality outcomes and report transparently on these outcomes. Without this, we will continue to see erroneous denials, reported no-shows, and contractors cutting corners to try and meet unrealistic objectives.”


2 Comments

  • Catarina Pupillo says:

    I hope the VA works on this issue. I was seen by a Dr. in a storeroom for my MST claim. I was seen by facialist for my back injury at beauty salon. They cancelled my other appointments and not I have to go thru the appeals process.

  • Catarina Pupillo says:

    The company is QTC.


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