Follow-up Audit of VBA's 100 Percent Disability Evaluations

OIG’s objective of this audit was to determine whether VBA took sufficient action to implement recommendation 7 from our 2011 report, “Conduct a review of all temporary 100 percent disability evaluations and ensure each evaluation has a future exam date entered in the veterans’ electronic records.” In January 2011, OIG reported in the Audit of 100 Percent Disability Evaluations, Veterans Benefits Administration (VBA), was not correctly evaluating and monitoring 100 percent disability evaluations. We projected that VA Regional Office staff did not correctly process 100 percent disability evaluations for about 27,500 (15 percent) of 181,000 veterans. The 27,500 disability evaluations included over 9,900 veterans with temporary 100 percent disability evaluations without a future exam date entered in their electronic record. We reported that without improved management of these claims, VBA could overpay veterans a projected $1.1 billion in the next 5 years. VBA reviewed all temporary 100 percent disability evaluations but did not take sufficient action to ensure each evaluation had a future exam date. As of January 2014, VBA identified over 8,300 temporary 100 percent disability evaluations for regional offices to review, which 7,400 (88 percent) had not been reviewed. We estimate 3,100 (42 percent) of these veterans received almost $85 million in improper benefit payments since January 2012 because these claims lacked adequate medical evidence. We remain concerned of VBA’s financial stewardship of these claims and project VBA, without action, could continue making unsupported payments to veterans totaling about $371 million over the next 5 years. We identified a $456 million ($85 million plus $371 million) total impact to the government. We reduced this projection to $222.6 million because our 2011 projection and report included all benefits before December 31, 2015. We determined that almost 1,500 claims folders with temporary 100 percent disability evaluations were located at the VA Records Management Center. Previously VBA told us they implemented our recommendation to transfer claims folders with temporary 100 percent disability evaluations back to the regional office. We recommended the Under Secretary for Benefits ensure regional office staff take appropriate action on temporary 100 percent evaluations within 180 days and transfer from the Records Management Center all claims folders with temporary 100 percent evaluations to the regional office of jurisdiction. The Under Secretary for Benefits concurred with our recommendations.