VA paid $23.8M in overtime to process backlogged claims. Staff weren't working on claims for half of it.

Abbie Bennett
June 23, 2020 - 5:20 pm

Getty Images

For years, the Department of Veterans Affairs signed off on millions of dollars' in staff overtime to tackle a backlog of community care claims. But a watchdog investigation found staff weren't working on those claims half the time.

Congress and the presidency have continued to expand veterans' ability to seek care in their communities, paid for by VA, for years. And over those years, the backlog of claims has piled up.

Backlogged community care claims increased from more than a quarter million in 2016 to 988,000 in 2018. In 2019, the backlog reached more than 1.3 million. 

While staff increased the number of claims they processed each year, the total claims filed continued to grow, while veterans, lawmakers and advocates put increasing pressure on the department to bring the backlog down and prevent veterans from being charged for their care or, in some cases, denied care. 

Even though the backlog continued to grow, VA added only about 10 claims processors in 2017 and 2018, or VA called on contracted support staff to help. 

Leaders in the VA Office of Community Care encouraged employees for years to use overtime to make up for a lack of staff and mounting claims, according to a new report from the VA Office of the Inspector General. 

But leaders didn't establish a policy for use of overtime or required staff to exclusively use overtime for claims processing.

In 2017 and 2018, supervisors approved more than 677,000 overtime hours totaling $23.8 million. But in an audit of the claims system, investigators found that $11.6 million of that overtime was not spent on processing the backlog of community care claims.

"Leaders did not effectively ensure their staff used overtime primarily to process claims," the report read. "There was no evidence of claims processing production or activity in the ... claims system (for) almost half of the total overtime paid." 

Investigators took a sample of 45 employees and found that 16 of them received more than $10,000 in overtime for hours when they did not process a single claim or complete any other claims-related work. 

Leaders did nothing to mitigate "the risk of overtime abuse," the report said, and the audit showed claims processors averaged "only an estimated 3.7 claims decisions per hour," about a quarter of the 13-claims-per-hour standard. 

And, of all the claims processed during those overtime hours, investigators found that only 60 percent were backlogged claims. 

Supervisors weren't sure what staff was working on during those overtime hours, according to the report.

"Even though leaders encouraged employees to process backlogged claims during overtime, supervisors said they occasionally
approved overtime to process backlogged mail," investigators wrote in the report. "Supervisors were not always able to identify what work the staff did accomplish on overtime, such as answering phone calls, assisting claimants in person, scanning incoming mail, and processing outgoing claim decision letters." 

Investigators said the use of overtime "presented a high risk for fraud and abuse" and the office had no strategy for reducing the claims backlog "without depending on overtime." 

The Office of Community Care planned to put in place a more automated system in 2020 expected to reduce manual claims processing, investigators said, but recommended leaders put in place clear policies and controls to prevent abuse of overtime.

Investigators also recommended leaders review employees' overtime to determine whether they should be disciplined. 

VA leaders including Veterans Health Administration executive in charge Dr. Richard Stone, agreed with investigators' recommendations and provided a plan to address them, saying they recognized "the impact that misuse of overtime could have on veterans and providers" and said they were reviewing a list of employees for disciplinary action and establishing a system to monitor overtime.

VA did not immediately respond to requests for comment.

Read the full report: 

VA kept thousands of veterans' appeals in boxes, file cabinets instead of processing them, report shows

VA 'failed' to pay claims for years, leaving veterans without care and facing collections


Lawmakers seek solutions for vets denied benefits after VA canceled exams amid COVID-19

Texas VA healthcare system went without a gynecologist for nearly 2 years, report shows


Reach Abbie Bennett: or @AbbieRBennett.

Want to get more connected to the stories and resources Connecting Vets has to offer? Click here to sign up for our weekly newsletter.