Enhanced Strategy Needed to Reduce Disability Exam Inventory Due to the Pandemic and Errors Related to Canceled Exams

The COVID-19 pandemic has affected how the Veterans Benefits Administration (VBA) provides disability benefits to veterans. On April 3, 2020, VBA discontinued all in-person disability exams that help determine the severity of medical conditions and the amount of benefits paid. The OIG conducted this review to assess how VBA scheduled and conducted exams during the pandemic to limit veterans’ exposure, minimize processing delays, and ensure claims were not prematurely denied due to missed or canceled in-person exams. The OIG also evaluated VBA’s strategy for addressing the inventory of delayed disability exams. VBA responded decisively to the pandemic by shifting exams to contractors, modifying procedures, and notifying veterans of their options. These included telehealth exams, reviews of acceptable clinical evidence, or the opportunity to wait for an in-person exam with the assurance that no final action would be taken until in-person exams could be completed. However, VBA and the OIG identified claims prematurely or improperly denied based on canceled exams, contrary to issued guidance. In response, VBA clarified guidance and established additional controls such as establishing a new program office focused on exam management operations and oversight. The OIG found that while the exam inventory has increased (about 1.5 million exams needed as of July 31), the percentage of errors decreased with clearer guidance. Still, VBA must further develop, implement, and test its strategy for reducing the growing inventory of pending exams while handling incoming exam requests. The plan must incorporate lessons from COVID-19 responses to ensure continuity of exam processing and to prepare for future national emergencies. VBA concurred with the OIG’s two recommendations to further develop, implement, and test the strategy to reduce the exam inventory and to implement a plan increasing the use of telehealth exams and ensuring contractors follow VBA guidance. (Click the Supplemental Information tab associated with this report for a related infographic.)