VA Doesn't Plan to Collect $1Billion in Mistaken Overpayments

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by Levi Newman on February 15, 2011

Extra payment for disabled veterans might seem like a nice mistake to make on the VA’s part. Over the last 18 years, VA personnel’s poor oversight and missed medical follow ups allowed nearly $1 billion of overpayment in disability benefits.

While the extra funds might give some relief to the recipients, the VA Inspector General and other officials such as AMVETS spokesman Ryan Gallucci worry about the effect the error has on the more than 300,000 other veterans waiting 125 or more days to receive benefits for themselves and their families.

Errors such as overpayment contribute to the massive VA backlog issue. In 2010, the VA took significant steps toward a five-year plan to end backlog. However, in light of the $1 billion overpayment, they identified a major kink in their plans. If mistakes like poor oversight continue, another $1 billion in payouts could be lost over the next few years, exacerbating the backlog issue.

Mistakes were found in about 27,500 cases before the Veterans Benefits Administration caught them. The issue stems from giving veterans who need surgery, convalescence or other treatment due to service-connected disabilities a 100 percent disability rating. In many cases, the VA fails to reduce or end the payouts after the recipients return to work or recover from their injuries.

“Despite numerous audit and inspection reports since FY 2004 stating that the staff was not consistently processing temporary 100 percent disability evaluations correctly, VBA has not fully corrected the problem,” the Veterans Benefit Administration report stated. “If VBA does not take timely corrective action, they will overpay veterans a projected $1.1 billion over the next 5 years.”

If a veteran is at fault for improper payout, meaning he or she purposefully molded situations in order to get more money, the VA would take action to collect the money from the veteran. However, the $1 billion error seems to rest on the shoulders of VA personnel. VA Inspector General officials reported that in nearly half of the cases, VA personnel did not schedule follow-up medical visits or update paperwork in files related to a veteran’s case. So, the VA is not pursuing any action at this point to retrieve overpaid funds.

Programs tested in 2010 to assist with the backlog issue, Quick Pay Disability and Express Lane, are meant to speed up the payment process. The Express Lane program splits the paperwork and cases up among VA personnel with some employees focusing on more complex cases, while others focus on simpler cases in a metaphorical “Express Lane.” Express Lane program might be a way to improve the oversight issue, which led to the $1 billion payout error, splitting up the cases so that VA personnel are not overwhelmed and tempted to overlook important details.

Photo thanks to ArghMonkey under creative common license on Flickr.

{ 1 comment… read it below or add one }

jim mcclain jr March 31, 2012 at 9:03 pm

The VA is going to collect and is doing so. My ex-wife received notice, at her address not mine, in form of a VA letter dated 2001 stating that I had a dependent listed as not entitled so it states but I also didn’t claim one I could have and they said that it was too late to include her for past payments as there was a time limit.
Unfortunately they say now that I am overpaid for that and was at the 80% IEU rate getting 100% only for paperwork and benefits, not pay. So they are saying that I owe 20% back pay for up to 8yrs or so. And have notified IRS that I have back income that is taxable.
I didn’t get any notice of this happening or recourse.
I only received my retirement/crsc payment of $1600 this month, not my VA of 2300. So I can’t work, can’t claim social security disability as they turned me down 3x.

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