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From Health Law Daily, July 15, 2014

VA backlog response makes matters worse

By Bryant Storm, JD

The Office of Inspector General for the Department of Veterans Affairs (VA OIG) has issued a report detailing its review of the Veterans Benefit Administration’s (VBA) special initiative to process claims pending over two years. The VA OIG review evaluated the special initiative’s ability to allow veterans to receive benefits more quickly, reduce the backlog of pending claims, and accurately process those claims. The report found that the special initiative was less effective than the VBA’s existing rating process when it came to resolving claims, administering benefits, and reducing the backlog. The VA OIG recommended that the VBA revisit the manner in which it processes pending claims and establish controls to better review veteran claims (OIG Report, No. 13-03699-209 July 14, 2014).

Special initiative. In March 2013, the VBA reported that nearly 43,000 claims had been pending for more than two years. To address the backlog, the VBA instituted a special initiative designed to prioritize and complete the outstanding claims within a 60 day window. VA regional offices (VAROs) were instructed to begin providing two kinds of ratings for the claims: final and provisional. A rating is the classification the VBA gives to a claim when the VBA has made a decision regarding the claim’s merit. A final rating is an appealable, final decision that the VA will deny or approve a claim. A provisional rating is a temporary decision that is not appealable and is pending additional evidence.

Slow and misleading. The VA OIG review evaluated a statistical sample of 240 claims processed during the VBA special initiative. The report indicates that while the provisional rating system was effective in making decisions quickly, it had no effect on getting benefits to veterans more rapidly. In fact, the VA OIG noted that the existing VBA intermediate rating process would have been faster in administering benefits in some cases. Additionally, because provisional ratings did not grant appeal rights for veterans, provisional decisions delayed veterans’ ability to contest the VBA rating. The provisional ratings also misrepresented the VBA’s backlog because when a provisional rating was issued, the VBA removed the claim from the VBA inventory and treated it as though it had been finalized. The removal of the provisional rating claims from the inventory also led to slower administration of benefits because the provisional claims ceased to be a priority once they were removed.

Inaccuracy. The VA OIG also found that the special initiative led to inaccurate claims decisions. The VBA inaccurately processed 33 percent of the claims evaluated in the review. The VA OIG report indicates that VARO staff felt pressured to complete ratings within the 60 day window demanded by the special initiative and the pressure led to inaccurate ratings. Even more startling, the VBA inaccurately processed 83 percent of the provisional ratings decisions. In large part, the inaccuracies stemmed from the policy of issuing a rating while awaiting determinative evidence and while skirting traditional review methods in order to meet the 60 day deadline. The inaccuracies also led to incorrect benefit decisions in several cases.

Recommendations. To correct the failures of the special initiative, the VA OIG recommends: (1) controls be implemented by the VBA to identify, track, and complete all existing provisionally rated claims; (2) provisionally rated claims be included in the VBA workload and inventory; (3) a plan be implemented to expedite final decisions on provisionally rated claims; and (4) a quality review be conducted to ensure that all provisionally rated claims processed under the special initiative were processed accurately.

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